Are home prices dropping in Knoxville? Home buyers and sellers are asking this question amid concerns about high interest rates and inflation impacting the housing market. 

Whether you’re buying or selling a home, understanding the housing market trends in your area is crucial if you want to make informed decisions. If you’re a seller, knowing the prices of homes in the area can help you determine your house value. And if you’re buying, you can use price information to get a sense of how much you can expect to pay.

So, what’s the current state of the real estate market in Knoxville? In this post, our team at Tracy King, Your Home Sold Guaranteed Realty will discuss whether home prices are dropping in Knoxville and, if so, what buyers and sellers can do to prepare.

What Factors Cause Home Prices to Drop?

Prices generally depend on the law of supply and demand. Prices rise when the market experiences low supply and high demand from buyers. On the other hand, when supply is high and demand is low, prices drop.

A variety of factors may drive down demand. These include:

• Economic challenges. Rising interest rates, high inflation, recession, unemployment, and other economic conditions can affect home buyers’ financial health. As a result, they may be unable to afford new homes, which reduces demand.
• Changes in location. The location itself can affect demand from home buyers.
  For example, if crime rates increase, the cost of living is high, or the area is prone to natural disasters.
• Demographic changes. Age, income, education level, family size, and population movement are demographic trends that can impact home prices. As different groups reach different stages of life, it may cause certain areas to experience shifts in demand.
• Oversupply of homes. When supply outpaces demand, it can lead to falling prices. This scenario may occur if too many new construction homes are being built and there aren’t enough buyers to fill them.

Are Home Prices Dropping in Knoxville?

Overall, home prices in Knoxville are not dropping, though price growth is slowing down. While many areas across the U.S. are feeling the effects of a cooling housing market, Knoxville home prices remain high. 

In fact, as of early 2023, median home prices in the city were higher than the national average.

In February 2023, the median listing price for homes in the area was $375,000. This is slightly higher than the median sold price of $340,000. 

According to the Knoxville Area Association of Realtors, home prices are expected to continue increasing, but at a slower pace than the past two years.

The association projects that prices will grow by three to five percent throughout 2023, despite declining home sales. This growth represents a 18.3% increase compared to home prices in the third quarter of 2022.

In addition, the Knoxville housing market is neutral, though it leans toward favoring home sellers. It’s still considered competitive, with homes receiving multiple offers and typically selling fast.

What Can Buyers And Sellers Do If Home Prices Are Dropping?

Home Buyers

If you plan to buy a home, home prices dropping in Knoxville might represent a good deal. For example, if the price drop is due to temporary conditions and prices are expected to increase again. 

However, it’s still important not to rush into purchasing a home. Buying a home is a major financial decision, and it’s worth being patient to ensure you end up with a good deal. 

To that end, working with an experienced realtor is essential to help you time the market and jump in when prices are at their lowest. A realtor can also help you compare home prices in other neighborhoods and communities to determine the causes of the price drop.

Home Sellers

If you’re selling a home, home prices dropping in Knoxville can hurt your potential sales profits. With a knowledgeable realtor on your side, it’s still possible to sell your home fast and for top dollar. 

But it’s also important to be realistic and set your asking price based on current market conditions– not past trends. For example, if home buyers are struggling with the effects of high interest rates, you’ll need to lower the price of your home to compensate.

If demand is especially low in your area, you might have to price your home lower or offer some concessions to attract buyers.

To get the maximum amount possible for your home, you’ll need to take extra steps to prepare it for sale. This means making necessary repairs, improving curb appeal, and updating other aspects of the home to make it move-in ready.

Lastly, working with a realtor will be key to helping you negotiate the best possible deal if you’re selling in a buyer’s market.

Our Team Can Help You Buy or Sell a Home in Knoxville

If you’re looking for realtors to help you buy or sell a home in Knoxville, Tennessee, Tracy King, Your Home Sold Guaranteed Realty should be at the top of your list.

We’ve been serving Knoxville and the surrounding areas for years. We have an in-depth knowledge of home prices and the historical market trends shaping the area. 

Our clients love working with us because of our legendary selling speed, high-quality customer service, and unique buyer and seller guarantees.

This includes our Guaranteed Sale Program for home sellers, which guarantees your home will sell within your desired time frame– otherwise, we buy it. For home buyers, we offer our Buy it Back guarantee, which gives you a risk-free home-buying experience.

To learn more about our guarantees or what it’s like working with us, call us at 865-830-3908 or fill out the form below for more information.