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Knoxville, TN: Real Estate Market & Trends 2016

Published on Wednesday - December 07, 2016

Slow and steady remains the theme for the Knoxville real estate market in 2016. Home prices and appreciation rates achieved moderate gains during the first-half of the year, while supporting factors such as home affordability, the local economy and new housing construction gradually improved. Although prices for Knoxville real estate remain below the national average, gains in the last three years have extended the trend of positive growth since the recession. With gains benefiting both homeowners and investors alike, the Knoxville real estate market has captured momentum in recent years and should continue to pick up steam in the early part of 2017.

Knoxville, TN Real Estate Market Statistics:

Knoxville real estate investing

One-year and three-year appreciation rates were 4.9 percent and 9.9 percent respectively during the second quarter. Home appreciation for Knoxville real estate is up from a year ago and improving, and continues to churn out decent returns in the form of total equity. Furthermore, price appreciation and principle payments in the last three years have boosted total equity growth since the recession. For those considering Knoxville real estate investments, the following highlights appreciation gains in previous years:

  • Homes purchased in the Knoxville, TN housing market one year ago have appreciated, on average, by $10,538. The national average was $14,963 over the same period.
  • Homes purchased in the Knoxville, TN housing market three years ago have appreciated, on average, by $23,128. The national average was $46,878 over the same period.
  • Homes purchased in the Knoxville, TN housing market five years ago have appreciated, on average, by $36,054. The national average was $82,353 over the same period.
  • Homes purchased in the Knoxville, TN housing market seven years ago have appreciated, on average, by $38,892. The national average was $77,054 over the same period.
  • Homes purchased in the Knoxville, TN housing market nine years ago have appreciated, on average, by $27,442. The national average was $31,126 over the same period.

Total equity gains remain moderate for the Knoxville real estate market in 2016. Although behind the national average, the last nine years have recorded steady gains while picking up the pace in the past year. For example, homes purchased in Knoxville one year ago have appreciated, on average, by $10,538, while the rest of the country appreciated by $14,963. From an investor’s perspective, the Knoxville real estate market holds immense upside, as low home prices combined with comparable equity gains should generate an array of investment opportunities, now and in the future.

Foreclosures are another form of opportunity for Knoxville real estate investing. There were 620 properties in Knoxville in some stage of foreclosure during the month of October, according to RealtyTrac. This represents a 49 percent increase from the previous month, yet 19 percent less than the same time last year. In addition, REO properties (bank owned real estate) have increased, with the number of REOs rising 34.8 percent from the previous month.

Knoxville, TN Real Estate Market Summary:

Knoxville housing market

Current Median Home Price: $167,700
1-Year Appreciation Rate: 4.9%
3-Year Appreciation Rate: 9.9%
Unemployment Rate: 4.7%
1-Year Job Growth Rate: 2.8%
Population: 183,270
Median Household Income: $33,494

Knoxville, TN Real Estate Market (2016) — Q2 Updates:

Knoxville real estate

Located in the heart of Tennessee, the Knoxville real estate market continues to enjoy medium gains in both home prices and appreciation rates. The median home price for Knoxville real estate was $167,700 during the second quarter, compared to the national average of $239,167. Although lower than the rest of the country, home prices are up from a year ago and continue to develop in the right direction. Appreciation rates were competitive in the second quarter, as one-year rates were identical to the national average (4.9 percent), while three-year rates increased to 9.9 percent. In addition to home prices and appreciation rates, the Knoxville real estate market also experienced positive gains in home affordability, new housing construction and the local economy in Q2.

One of the biggest supporters for the Knoxville real estate market has been the economy. Employment has held up and is on an upward trend, as one-year job growth reached 2.8 percent during the second quarter, whereas the national average achieved 1.9 percent growth. Additionally, the second quarter saw an unemployment rate of 4.7 percent, lower than the national average of 4.9 percent, and better than its unemployment one year ago (5.9 percent). Compared to other markets, local employment growth in Knoxville is strong and faring better than the rest of the country.

Another component that benefited the Knoxville housing market during the second quarter was home affordability. Homeowners paid 8.6 percent of their income to mortgage payments in Q2, while the national average paid an astounding 15.8 percent. The ratio of price-to-income was much lower during the second quarter compared to its historical average of 11.5 percent. One factor that could influence home affordability in future years is new housing construction. The current level of construction in Knoxville is 62.3 percent above the long-term average, which means construction is on the rise relative to last year. In addition, permits for single-family housing were 21 percent higher than the previous year, while that number for the national average settled at 10.6 percent. That said, the rise in construction could suggest the local inventory has stabilized.

Moving forward, the Knoxville real estate market is expected to experience higher price growth than the rest of the country in the second-half of 2016. The National Association of Realtors (NAR) predicts Knoxville real estate will grow by 4.2 percent in the next 12 months, compared to the national average of 3.6 percent. This bodes well for Knoxville real estate investors and homeowners alike, as the trend of growing home prices and appreciation rates should continue in the second-half and beyond.

*The information contained herein was pulled from third party sites. Although this information was found from sources believed to be reliable, FortuneBuilders Inc. makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. Any reliance on this information is at your own risk. All information presented should be independently verified. FortuneBuilders Inc. assumes no liability for any damages whatsoever, including any direct, indirect, punitive, exemplary, incidental, special, or consequential damages arising out of or in any way connected with your use of the information presented.

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