Knoxville Area Housing Market Off to Good Start in 2021

Key Highlights

  • Home sales declined in January — down 24.6% from the prior month but up 22% from a year ago.
  • The median home sales price was $239,075 in January — down from December but up 19.5% from one year ago.
  • Total housing inventory is at a historic low with active listings down 46.7% compared to 2020. For the first time in at least two decades, months’ supply fell below one month in January.
  • Half of homes sold in January were on the market for less than 12 days.

KNOXVILLE, Tennessee (March 2, 2021) — Home sales in the Knoxville area declined in January according to data from the Knoxville Area Association of Realtors® (KAAR). While sales were down from the prior month as part of an expected seasonal decline, homes in January were up compared to 2020.

Existing-home sales—completed transactions including single-family homes, townhomes, condominiums, and co-ops—decreased 24.6 percent from the prior month. Sales in total rose year-over-year, up 22 percent from a year ago.

“The Knoxville area experienced another strong month for home sales in January,” said Hancen Sale, Governmental Affairs and Policy Director for KAAR. “A dwindling housing supply is the biggest obstacle for the housing market, as home sales cannot continue to remain elevated without a sufficient supply of homes on the market.”

Nationally, existing-home sales rose to a seasonally-adjusted annual rate of 6.69 million in January — up 0.6 percent from November and 23.7 percent from one year ago. Home sales in the South similarly increased 3.2% from the prior month, up 25.1% from January 2019.

"Home sales continue to ascend in the first month of the year, as buyers quickly snatched up virtually every new listing coming on the market," said Lawrence Yun, chief economist for the National Association of Realtors. "Sales easily could have been even 20% higher if there had been more inventory and more choices."

The median home sales price in the Knoxville area was $239,075 in January — down from December but up 19.5 percent from one year ago.

“Since the supply of homes is relatively fixed in the short-term, buyers should expect home prices to rise throughout the year,” said Sale. “Homeowners are also likely to see continued equity gains.”

Total housing inventory declined once again in January with active listings down 23.9 percent from the prior month and 46.7 percent from one year ago. For the first time in at least two decades, months of inventory1 fell below one month in January. The absorption rate2 increased to 102 percent.

According to KAAR data, half of the homes sold in January were on the market for 12 days or less.

“The inventory is extremely limited right now,” said Sale. “For Knoxville and the broader East Tennessee region to remain affordable and continue attracting new investment, meeting the rising demand for housing is critical.”

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The Knoxville Area Association of Realtors® 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