KNOXVILLE, Tenn. (WATE) — Real estate experts predict higher prices, low inventory and fast turnarounds will continue to drive the market. To make matters even more competitive, some houses are selling within hours of being listed.
The housing association identified 10 “hidden gem” housing markets across the country. Knoxville is on that list together with areas like Spartanburg, South Carolina; Fayetteville, Arkansas; and Huntsville and Foley, Alabama, as well as four other larger cities.
Claudia Stallings has never seen a sustained hot trend in the Knoxville area housing market as we’re experiencing today. As vice-president of residential sales for Coldwell Banker Wallace, she has compiled supply-and-demand trends.
Since 2016, the numbers show housing prices rising rapidly as inventory drops and competing for those homes two big age groups.
“We’ve gone back to 2016 and looked through 2021,” Stallings said. “We see a very steady increase with our largest leap happening in 2020 and 2021.”
The pandemic and its huge effect on the U.S. economy is changing the way we live and work. It’s also made 2021’s housing market anything but typical.
“In 2016 we had almost 36,000 properties available during the course of the year,” Stallings said. “However, in 2021 that dropped to just over 29,000. … As these lines come together, that puts pressure on buyers because there is more competition for every listing that is listed.”
In six years the average sales price of a home increased by nearly $137,000.
“What we see here is our average sales price, even year over year, has increased by 23%,” Stallings said. “But what our chart shows us since 2016 through 2021, we have moved from about $196,000, average sales price, to over 333,000.”
With her extensive experience of the market, we ask Stalling how much higher will home prices rise?
“So we ended the year in 2021, with an average price of $333,000 for the year,” she said. “The National Association of Realtors predicts a 2.9% price increase. But because of our local market situation – our pressure of supply and demand here – the Knoxville area, the greater Knoxville area is expecting a 7.7% price increase which brings us to almost $360,000.”
The federal reserve is expected to raise interest rates a few times this year, which means mortgage rates will rise. Mortgage lenders expect a 30-year-fixed mortgage rate will reach 3.6% by the end of 2022, compared to an average of 3.3% now.
However realtors say that’s not necessarily bad news for buyers. Higher mortgage rates means fewer “speculative buyers” will be in the market because there is less money to be made. That could help if you’re searching for a home.