KNOXVILLE, Tenn. — People looking to buy a home in East Tennessee continued to face increasingly higher prices in May, according to a new report.
The East Tennessee REALTORS group said the median sale price for a home in the region increased to around $365,000 in May, a jump of around 8.96% compared to the previous year. In April, the realty group said the median home sale price was around $354,450. It also said around half of the homes sold in the region were under contract in 13 days or less.
The report also said around 51.5% of homes sold for the asking price or above in East Tennessee, and around 27.4% sold for more than the asking price. Around 13.5% of all homes sold in May were newly built, according to the report. It said the average home sold in the second quarter of 2024 got an average of 2.7 offers, an increase compared to the previous quarter.
"Despite higher mortgage rates, the increase in home sales has led to pending listings being up 5.7% from the previous year across the region. Although still low by historical standards, inventory levels are appreciably higher than a year ago," the realty group said.
It said Knox County specifically saw a 10% increase in home sales compared to last year. The realty group also found that fewer realtors expected seller and buyer traffic to increase during the next few months. Around 56% of realtors also said they expect home prices to increase over the next year.
Around 29% of sales were all-cash sales in the second quarter of 2024, a number that has stayed mostly the same over the last year. The report also said mortgage rates dropped below 7% in June, the lowest level seen in around three months, the report said.
It also said a state commission completed a separate study about the relationship between impact fees and its relationship to housing affordability. It said the study was published on May 29 and said that local governments should use zoning tools to encourage developers to build housing. It also recommended Tennessee offer an incentive for local governments to adopt zoning reforms that promote housing.
"The state could use a portion of those same or other revenues to fund the Tennessee Housing Development Agency's housing trust fund to make low-interest construction loans for affordable housing. Likewise, a small portion of funding could be reserved by the state for infrastructure projects in ways that smooth out the ups and downs of the business cycle," the commission's report said.
