In 2024, the Tennessee housing market is witnessing a significant evolution, shaped by various economic and social factors. The market dynamics are a blend of stability and adaptation, reflecting both national trends and regional particularities. This period is crucial for understanding the broader implications for homebuyers and investors alike in the Housing Market in Tennessee.
The Housing Market in Tennessee is currently navigating through a landscape influenced by fluctuating mortgage rates, evolving buyer preferences, and a shifting economic climate. These factors collectively impact the decision-making processes of buyers and sellers, thereby shaping the market's trajectory in 2024.
Predictions for 2024
Predictions for the Housing Market in Tennessee in 2024 suggest a period of adjustment. Home prices are expected to decrease slightly by about 1.7%, following a minor increase in the previous year. This trend indicates a market that is becoming more accommodating to buyers after a period of intense seller advantage.
Alongside price changes, mortgage rate forecasts play a pivotal role in the Housing Market in Tennessee. Prospective buyers are closely monitoring these rates, as they significantly influence the affordability of homes. The expected stabilization of mortgage rates could provide a much-needed respite for buyers who have been priced out of the market in previous years.
Best Cities to Live in TN 2024
When considering the best cities to live in TN in 2024, areas like Nashville-Davidson, Knoxville, and Chattanooga emerge as significant contenders. Each city presents its own set of real estate dynamics, influenced by local economic growth, lifestyle preferences, and community development initiatives.
The Housing Market in Tennessee within these cities is characterized by diverse opportunities and challenges. For example, Nashville-Davidson is seeing a mix of sales decline and price drops, while Knoxville experiences a unique scenario with decreasing sales but increasing prices. These trends reflect the complex nature of regional markets within Tennessee.
Regional Market Analysis
The regional market analysis for Tennessee in 2023-2024 shows a dynamic and evolving real estate landscape. In October 2023, 19.4% of homes in Tennessee were sold above the list price, reflecting a competitive market. The sale-to-list price ratio stood at 97.8%, indicating a strong and balanced market. Nashville, as a top destination, is particularly notable, with a net inflow of 2,800 people, underscoring its appeal to new residents. This trend is consistent with Tennessee ranking among the top five states homebuyers searched to move to. The average home value in Tennessee was $309,795 as of late 2023, representing a 2.5% increase over the past year, and homes were going to pending status in about 17 days, highlighting a dynamic market.
Regionally, cities like Knoxville, Crossville, and McMinnville are leading in home price growth. Knoxville, for instance, showed a projected home price growth of 3.6% by the end of October 2024. Similarly, Crossville and McMinnville displayed growth rates of 3.6% and 3.4%, respectively, in the same period. These figures indicate robust growth in these areas, suggesting strong market dynamics at play.
Economically, Tennessee's job market in October 2023 was strong, with an unemployment rate of 3.3%, lower than the national average. The state's real GDP growth rate in the first quarter of 2023 was 3.5% per year, indicating that the economic growth in Tennessee is outpacing the national average.
The strongest growth was seen in the agriculture, forestry, fishing, and hunting sectors, with a staggering 49.2% growth rate per year. The real GDP for manufacturing was also significant, standing at $74.9 billion per year. Tennessee's share of the US economy was 1.9%, ranking it 16th among states and Washington, D.C. These economic indicators suggest a robust and diverse economy, which is likely contributing to the strength of the regional real estate market.
The Impact of New Home Constructions
New home constructions are significantly impacting the Housing Market in Tennessee. The increase in sales of newly constructed homes is a response to the evolving demands of the market. Home builders are now more focused on offering attractive concessions and innovative designs to lure buyers, indicating a competitive and dynamic market environment.
These new constructions are not only changing the landscape of available housing options but are also influencing market trends in terms of pricing and buyer preferences. As buyers increasingly lean towards modern, energy-efficient, and custom-designed homes, builders in Tennessee are adapting their strategies to meet these demands.
The Role of iBuyers in the 2024 Market
The role of iBuyers in the Housing Market in Tennessee is becoming increasingly significant. These digital-first real estate companies are expected to continue making lowball offers, influencing both market pricing and the strategies of traditional home sellers. This trend is indicative of the growing impact of technology and digital platforms on real estate transactions.
As iBuyers like Opendoor and Offerpad adjust their strategies in response to financial challenges and market conditions, their presence is reshaping how sales are conducted in the Housing Market in Tennessee. Their role is a testament to the evolving nature of real estate transactions, where digital convenience and speed are highly valued.
The Rental Market in 2024
The rental market in Tennessee for 2024 appears to be stabilizing with subtle changes. Fair Market Rent (FMR) data for Knoxville, TN HUD Metro FMR Area, a key indicator of rental prices, shows varied rates depending on the size of the unit. For instance, the FMR for a studio or efficiency apartment is $985 per month, while a 4-bedroom house or apartment rents for about $1,833 per month. The average FMR for a 2-bedroom home is approximately $1,221. This data suggests a diversified rental market catering to different housing needs and budgets.
In the broader context of the Tennessee housing market, there's an overall competitive nature, with a substantial percentage of homes selling above their listed prices as of late 2023. This competitiveness in the housing market might reflect on the rental market as well, particularly in sought-after areas.
The median sale price of homes reached $313,333 by September 30, 2023, indicating the current value buyers are willing to pay, which can impact rental prices indirectly. Moreover, with Tennessee’s strong job market and economic growth, there’s a sustained demand for housing, both in terms of purchase and rentals. The state's low unemployment rate of 3.3% and robust private sector employment growth of 5.9% in September 2023 further contribute to a dynamic housing market, including the rental sector.
Prospects for First-Time Homebuyers
For first-time homebuyers, 2024 in the Housing Market in Tennessee is looking more favorable. The decline in the proportion of income required for home purchases is a positive sign, indicating improved affordability and accessibility to the housing market. This shift is particularly significant in a market that has been challenging for first-time buyers due to high prices and competitive bidding scenarios.
These changing dynamics offer a ray of hope for those entering the housing market for the first time. It also underlines the importance of financial planning and market research for these buyers, ensuring they make the most informed and beneficial decisions in the Housing Market in Tennessee.
Best Suburbs of TN 2024
In 2024, the best suburbs of Tennessee continue to attract attention for their unique blend of amenities, natural beauty, and affordable living. Among the top picks, Signal Mountain stands out as a suburb of Chattanooga, known for its stunning views and plethora of outdoor activities, including hiking trails and access to Chickamauga Lake and the Tennessee River. Its combination of top-rated schools, affordability, and quality of life makes it an ideal location for outdoor enthusiasts.
Hendersonville, a suburb of Nashville, is another excellent choice, especially for families who enjoy outdoor activities like biking and fishing. It offers lakeside properties, a top school system, and an affordable cost of living, making it an attractive option for those seeking a balance between suburban tranquility and the amenities of a larger city like Nashville.
Other notable suburbs include Maryville, known for its proximity to the Smoky Mountains National Park and a low cost of living, and Thompson’s Station, which boasts a beautiful setting in the rolling hills and countryside of Tennessee. Thompson’s Station provides a serene escape with easy access to Nashville and Franklin, offering a mix of parks, historical sites, and a robust arts scene.
Knoxville, the third-largest city in the state, is recognized for its vibrant and progressive atmosphere. This college town, home to the University of Tennessee, offers a wide range of cultural and recreational activities, including a lively downtown area with live music, microbreweries, and art. Its affordability and close proximity to the Great Smoky Mountains National Park add to its appeal.
Lastly, Chattanooga, with a strong score for livability, is known for its diverse culture and recreational opportunities provided by its location on the Tennessee River. The city is celebrated for its arts community, hosting various festivals throughout the year, and its downtown area is a hub of entertainment with restaurants, shops, and historical architecture.
Where Are People Living in TN
In 2024, Tennessee's population trends and living preferences continue to evolve, influenced by various factors including economic opportunities, quality of life, and a strong sense of community. Shelby County, including Memphis, remains the most populous county with over 900,000 residents.
Davidson County, home to Nashville, is the second most populous, with a population of over 700,000 and rapid growth. Knox County, including Knoxville, and Hamilton County, encompassing Chattanooga, follow as the third and fourth most populous counties, respectively. Rutherford and Williamson counties are among the fastest-growing areas, reflecting the state's overall population growth trend.
This growth is driven by natural increases (the difference between births and deaths), net migration, and international migration. Tennessee's strong economy, particularly in manufacturing, healthcare, and tourism, combined with its low cost of living and business-friendly environment, makes it an attractive destination. The state's natural beauty, outdoor recreational opportunities, and cultural attractions add to its appeal, drawing people to its friendly communities.
A key aspect of this growth is net domestic migration, which reached an all-time high in 2022, indicating a strong influx of residents moving into the state. This trend is cyclical, often peaking in strong economic times, and is a testament to Tennessee's robust job market and quality of life. The South region of the U.S., including Tennessee, was the only area in the country that added population from domestic migration in both 2021 and 2022, showcasing the region's growing attractiveness.
The Tennessee real estate market, bolstered by these population trends, is experiencing a dynamic phase. Home prices have been rising steadily in major metropolitan areas, reaching around $367K in September 2023. The state’s housing market is expected to remain strong, with a low likelihood of a market crash. Factors such as the state’s affordability, strong job market, and friendly tax policies contribute to this stability. The market is attractive both for buyers, due to the easing of mortgage rates, and for sellers, due to the continued rise in home prices driven by the low supply-high demand dynamic.
Titan Elite Moving, which is a moving company, has observed these trends closely. They cater to the increasing number of people relocating within and to Tennessee, offering services that reflect the state's growing popularity as a destination for both families and professionals. The company’s range of services, including local and interstate moves, and its strong reputation in the community, underscore the significance of the ongoing population movement in the state.
Conclusion
In summary, the Housing Market in Tennessee in 2024 presents a landscape of opportunity and challenge. While certain regions may witness a downturn in sales and prices, other areas offer promising prospects, particularly for first-time buyers and those seeking suburban living.
The overall outlook remains cautiously optimistic, with factors such as economic health, legal changes, and construction trends playing pivotal roles. This article provides comprehensive insights into the various aspects of Tennessee's housing market in 2024, underlining the importance of understanding regional dynamics, market influencers, and emerging trends for anyone interested in Tennessee real estate.
