Tennessee housing market: Everything you need to know
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Housing markets around the country are adjusting to account for high prices and high interest rates. If you’re thinking of buying or selling a home in the Volunteer State, it pays to know how the state’s housing market is faring under the current conditions. Here’s what you should expect from the Tennessee housing market.
Tennessee housing market overview
As is the case in many places, housing prices have seen explosive growth in Tennessee in the past few years. According to Redfin data, median home prices in March 2020 averaged just a bit above $250,000. By March 2023, though, the median sale price in the state was $360,000. That’s a $100K+ increase in price in only three years. This increase is paired with steady population growth as well — an indication that demand could be driving up prices.
However, again as is the case in many places, the market is starting to slow down. Properties in the state are currently staying on the market for a relatively long time at a median of 58 days, which is 25 days longer than this time last year. And more than 20 percent of homes sold in March had to drop their prices.
Tennessee housing trends and stats
- Median home price: $360,000 as of March 2023, according to Redfin. That’s a 2.1 increase since March of last year, though still below the national median home price of $375,700.
- Sale-to-list price: 98 percent, meaning 2 percent of homes sold for less than their list price.
- Days on market: 58 — up significantly from 33 in March 2022.
- Average closing costs: 1.4 percent of the sale price, according to ClosingCorp. For a median-priced $360,000 home, that would come to just over $5,000.
Should you buy or sell in the Tennessee housing market?
Information is crucial to deciding whether — and when — you should buy or sell a home in Tennessee. Here’s what buyers and sellers need to consider.
If you’re a home seller
The fact that home prices are continuing to rise is a good sign for Tennessee sellers. But the market is slowing, so don’t expect it to be as easy as has been over the past few years. With higher interest rates and more homes on the market — sale listings are up about 25 percent year-over-year, per Redfin — the buyers who can still afford a home have more of an advantage these days.
To start, make sure you have a good understanding of how much your home is worth. Setting the right asking price is vitally important: An experienced local agent can perform a comparative market analysis to see how your home stacks up against similar homes in the area that have listed or sold recently. They can also advise you on what, if any, changes to make before you list.
If you’re a homebuyer
If you’re buying a house in Tennessee, you’ll have more houses to choose from than you would have last year. However, as the weather warms, the housing market tends to pick up. Be prepared to move quickly and know how far you’re willing to negotiate for the right house.
One way to make an informed decision on how much house you can afford is to get preapproved for a mortgage. This will help you set a firm budget by telling you how much a lender is likely willing to loan you for the purchase — and it also signals to sellers that you are a serious buyer and not just a lookie-loo.
In addition, it’s smart to research the cost of living in the area you’re moving to. If you’re moving from a major coastal city, you may be pleasantly surprised by how much cheaper life can be in Tennessee. However, if you’re moving from a more rural area to Nashville, for example, be prepared for things to cost more.
Tennessee housing market predictions
With the uncertain economy and the huge spike in mortgage rates over the past year, many buyers and sellers are desperate to know what will happen to the housing market going forward. Some pundits might be throwing around the term “market crash,” but experts say nothing about today’s market is pointing in that direction. Instead, conditions are simply slowing from their previously feverish pace — a course-correction, not a crash. Home prices in Tennessee are still going up, just maybe not as sharply as they once were.
Find a Tennessee real estate agent
The housing market is complex, in Tennessee and everywhere. Having an experienced local agent by your side can make the real estate journey a lot easier. If you’re selling, an agent will know how to set the right price, attract buyers and negotiate to get you the best possible price. For buyers, agents know the intricacies of the local market: school districts, how area HOAs work, what neighborhoods can offer you everything on your wish list for the best price. Either way, an agent can walk you through what will be one of the largest financial decisions of your life.
While median home prices have fallen since their peak in May 2022, the latest data from Redfin shows that prices in 2023 have so far been rising. The median price in the state as of March 2023 was $360,000, which is a 2.1 percent increase over the same time last year.
Tennessee is a popular state: Its warm climate, growing economy and unique culture make it appealing for many. Population-wise, it was one of the fastest-growing states in the country between 2021 and 2022, according to the Census Bureau. In addition, Redfin data shows that home prices increased month-over-month throughout the first quarter of 2023. With a steadily increasing need for housing and growing home values, Tennessee seems like a solid choice for homebuyers.