May 2025 East Tennessee Housing Market Update: What Buyers & Sellers Need to Know
The latest housing report is in—and while the East Tennessee market is showing some positive signs, it's also revealing a few key challenges for both buyers and sellers.
Let’s break it down:
📈 Home Sales Tick Up from April, But Still Trail Last Year
We saw a slight rebound in May, with home sales up 3.4% from April’s slower pace. However, compared to this time last year, sales are still down by 4.8%. That said, activity is picking up as we head deeper into the spring and summer season.
💰 Median Home Price Holds Strong
The median sale price across our region was $370,000—up 1.3% year-over-year. That small but steady growth tells us that prices are holding firm, even as inventory rises.
🏡 Inventory is Climbing
One of the most encouraging updates? Total housing inventory is up 40.3% compared to last year. For context, we now have over 7,000 active listings—the highest we've seen since before 2020. More inventory = more options, which is something we desperately need, especially for buyers searching under $300K.
⏱️ Homes Are Still Moving, Just Not Quite as Fast
Homes are taking a little longer to go under contract—about 19 days on average compared to just 13 last May. That’s still a healthy pace, but it shows buyers are taking their time (and maybe negotiating a little more).
📊 Pricing Power is Holding
Roughly 45% of homes sold at or above asking price in May. 21% went over asking, and about 8% sold for $10K+ above list. So while bidding wars aren’t as intense as they were in recent years, homes that are priced right and marketed well are still commanding strong offers.
🏗️ New Construction Slows Again
New construction made up just 12.2% of May’s total sales—and the average sale price for those homes? $448,703. This continues the trend of new builds being out of reach for many first-time or entry-level buyers.
So, What’s Next for the Market?
We’re at an interesting crossroads. More listings are hitting the market, and we’re moving through the busiest time of the year. But buyer confidence is still shaky—largely due to affordability.
Here’s what we’re watching:
-
If mortgage rates fall to around 6.5% or lower, we could see an uptick in activity this fall.
-
Most current listings are skewed toward larger, higher-end homes, but demand is highest for homes under $275K—and those are still hard to come by.
-
Unless inventory becomes more balanced, we may only see modest growth through the end of 2025. The East Tennessee REALTORS® Association just adjusted their forecast down from 8.3% to 6.1% growth for the year.
What This Means for You:
-
Buyers: You’ve got more homes to choose from than last year, and some negotiating power is returning. But if you're shopping under $300K, options are still limited—so staying on top of new listings is key.
-
Sellers: Homes are still selling quickly and for strong prices—if they’re priced right. The days of automatic bidding wars may be slowing, but demand is still there, especially in that sweet spot of affordability.
If you’re thinking of buying, selling, or just want to talk about your options in this changing market, I’m here to help! The Knoxville market is shifting—but with the right strategy, there’s still a ton of opportunity out there.
—
Karli Pritchard, Knoxville Realtor
📱 865-591-2299
📧 p[email protected]
