KNOX COUNTY, Tenn. — The housing crisis in East Tennessee continues to be a struggle into 2023. The demand for homes in the metro area far outweighs the supply. The economics of the situation keeps home prices climbing at a slow, steady rate.
According to the 2023 State of the Housing Report researched and presented by the Knoxville Area Association of Relators (KAAR), median home prices in Knoxville crossed beyond the national median listing price, effectively calling into question whether the area can be considered an affordable area. In the fourth quarter of 2022, they said the median price in Knoxville was around $426,633. Across the U.S., it was $415,743.
According to Hancen Sale with KAAR, the metro Knoxville area is short 22,000 dwelling units.
Whether it's a home in West Knoxville, a loft in the Old City, or a multi-family unit in North Knox County, available, affordable housing of any kind is hard to come by.
"The demand is through the roof, and it continues to be an ongoing issue that we're having," Sale said.
The report detailed an expected 'cool down' of the housing market. Sale said that seems to be accurate about halfway through the year.
"Our forecast is looking pretty good. Home prices have been pretty stable. We've seen a little fluctuation but by and large, they've stayed on a slow upward trend. It's definitely slower than what we saw at the height of the pandemic. But home prices are growing but at a slower pace," Sale said.
However, people are still moving to the area and there are still fewer homes on the market than in years past.
"We've seen a pretty big drop in sales that we expected that to be the case with higher rates, but as we move into the latter half of the year we think that might improve," Sale said.
With a demand of 22,000 more units, Sale said change cannot come fast enough for East Tennessee.
"We need the government to be a partner in sometimes getting out of the way and allowing homebuilders to respond with the supply that we desperately need," he said.
In some ways, the government is moving in the right direction. On Thursday, the Knox County Planning Commission approved projects that could add just under 400 townhomes to the county. But, it's not enough to meet the need.
"If we don't address this problem, now, it's going to be at the expense of our future, and our future growth and our future prosperity," Sale said. "It's about creating a diversity of options to meet different price points for different households."
To read the State of the Housing Report, click here.