Knoxville Area Housing Market Continues Upward Trend in October

Key Highlights

  • Home sales grew for the third consecutive month in October — up 0.5% from the prior month and 18% from one year ago.
  • The median home sales price was $249,000 in October—up 5.5% from the prior month and almost 24.5% from one year ago.
  • Total housing inventory declined in October — down 4% from the prior month and 48% from one year ago. Months of inventory fell to 1.31 and the absorption rate rose to 76%.
  • More than 6 in 10 homes sold in October were on the market for less than one month.

KNOXVILLE (November 23, 2020) — Home sales in the Knoxville area continued to rise in October, marking two consecutive months of month-over-month and year-over-year gains, according to the Knoxville Area Association of Realtors® (KAAR).

Existing-home sales—completed transactions that include single-family homes, townhomes, condominiums, and co-ops—increased 0.5% from the prior month and 18% from one year ago.

“Home sales generally cool down in the last few months of the year, but the housing market is continuing to outpace expectations this Fall,” said Hancen Sale, Governmental Affairs and Policy Director for KAAR. This can be attributed to a host of factors, including record-low interest rates, the desire to add a home office or more outdoor space, and even some extra savings among higher-income households accrued during the pandemic.

Nationally, existing-home sales in October grew to 6.85 million — up 4.3% from the prior month and 26.6% from one year ago.

“The surge in sales in recent months has now offset the spring market losses," said Lawrence Yun, chief economist for the National Association of Realtors®. “With news that a COVID-19 vaccine will soon be available, and with mortgage rates projected to hover around 3% in 2021, I expect the market's growth to continue into 2021.” Yun forecasts existing-home sales to rise by 10% to 6 million in 2021.

The median home sales price in the Knoxville area was $249,000 in October — up 5.5% from September and almost 25% from one year ago.

“There are multiple forces creating upward pressure on home prices including a very limited supply of homes, especially those priced under $200,000, and remarkably high demand,” said Sale.

Currently, homes priced below $200,000 making up just 32% of all active listings.

Total housing inventory declined in October — active listings were down 4% from the prior month and 48% from one year ago. Months of inventory1 declined for the fourth month in a row to 1.31 in October. The absorption rate2 increased to 76 percent.

“Fewer homes are available and those that do go on the market sell quickly,” said Sale. “For areas with particularly high demand, it's not uncommon for sellers to receive multiple offers within the first few hours of their home hitting the market.”

More than 6 in 10 homes sold in October were on the market for less than one month, and nearly 85 percent of homes sold in the past month were on the market for 120 days or less.

“Looking forward, I suspect the record low inventory and surging prices coupled with a worsening pandemic could temper home sales in the coming months,” Sale said. “But the housing market has been particularly resilient throughout the pandemic so it's hard to know what exactly the future holds.”

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The Knoxville Area Association of Realtors® (KAAR) is a trade association, representing around five thousand members involved in all aspects of the residential and commercial real estate industries. KAAR tracks home sales in the Knoxville area each month. Monthly housing market reports and multiple listing services (MLS) data are generated around the 15th of each month for sales in the previous month.

Media Contact

Hancen Sale

hancen@kaarmls.com

865-588-6350


1 Months of inventory denotes the number of months it would take to exhaust active listings at the current sales rate.

2 The absorption rate represents the percentage of current inventory sold per month.