Tennessee Real Estate Trends

Tennessee’s real estate market, like much of the country, has seen significant changes over the past few years. Whether you’re looking to buy or sell a home, understanding the current trends in the state is crucial. As of December 2022, real estate activity has slowed across much of the United States, with the number of homes sold down 36% compared to the previous year. That trend holds in Tennessee as well, but some local factors at play are worth understanding. Here’s a detailed look at key trends in Tennessee’s real estate market that will help you make more informed decisions.

Median Sale Price in Tennessee

The median sale price for homes in Tennessee has risen steadily in recent years, and that trend continued through 2022. The median home price in Tennessee increased by over 6% compared to the previous year, reaching $367,900. This rise reflects a broader national trend of increasing home prices, though Tennessee’s affordability compared to many other states continues to make it an attractive market for buyers.

The price growth has been especially noticeable in Tennessee’s larger cities like Nashville, Knoxville, and Chattanooga, where the demand for housing remains strong. However, this rapid increase in home prices has slowed somewhat. Just a year ago, home prices in Tennessee had increased by 26%, driven in part by historically low mortgage rates and high demand. With mortgage rates now higher due to inflation and economic uncertainty, it’s expected that the growth in median home prices will stabilize or increase only slightly in 2023.

Decline in the Number of Homes Sold

Perhaps the most striking trend in Tennessee’s real estate market is the sharp decline in the number of homes sold. In December 2021, there were 9,563 homes sold in the state, but by December 2022, that number had dropped to 6,247. That’s a 35% decrease, a significant change that highlights the cooling market conditions across Tennessee.

This is the lowest number of homes sold in a month in Tennessee over the last five years. A key reason for this drop is the rise in mortgage interest rates, which has priced many potential buyers out of the market. Higher borrowing costs have made homeownership less affordable, causing buyers to either delay purchasing or lower their budgets.

Despite the decline in sales, Tennessee is still seeing relatively strong demand, particularly in cities like Chattanooga and Nashville. However, if the trend of fewer home sales continues, it could lead to longer times on the market for homes and a potential dip in prices, particularly in areas where demand is lower.

Median Days on the Market

As market conditions have cooled, the time it takes to sell a home in Tennessee has lengthened. The median number of days a home spends on the market is now 56 days, a 16% increase from the same period a year ago. Homes are taking longer to sell, which could indicate that buyers are becoming more cautious or selective in their choices, given the higher costs of financing a home purchase.

Homes in Tennessee, especially in the major cities, are still selling within a reasonable time frame, but the increase in days on the market suggests that sellers may need to be more patient or price their homes more competitively to attract buyers. This trend of longer times on the market is expected to continue throughout 2023, especially if mortgage rates remain high.

What This Means for Sellers

If you’re a homeowner in Tennessee thinking about selling your property, these trends indicate that it may take a bit longer to find a buyer than it did just a year ago. However, the state’s larger cities and their surrounding suburbs still remain desirable areas, and well-priced homes in good condition will still attract interest.

That said if you need to sell your home quickly—whether due to relocation, financial challenges, or other personal circumstances—the traditional real estate market may not be the most practical option. With fewer buyers in the market and homes taking longer to sell, waiting for the right offer can be stressful and time-consuming.

This is where alternative options, like working with cash home buyers, come into play. Cash buyers purchase homes as-is, without requiring any repairs or renovations, and can close on the property much faster than through a traditional sale. This option can be particularly beneficial if you’re looking to sell quickly or avoid the hassle of repairs and showings.

How Cash Home Buyers Help in a Slower Market

Cash home buyers are becoming an increasingly popular choice for sellers, especially in a market where traditional transactions are taking longer to complete. Here’s why:

1. Speed: Cash buyers can close on a property in a matter of days, rather than the weeks or months it can take to sell through a realtor. This is especially helpful if you’re facing a time-sensitive situation.
2. No Repairs Needed: One of the biggest challenges for sellers is preparing a home for sale. Cash buyers will purchase homes in any condition, which means you won’t have to spend time or money on renovations, staging, or even cleaning. This is a huge relief for sellers who may not have the resources to fix up their homes.
3. Avoiding the Mortgage Process: With traditional buyers, you often have to wait for them to secure financing, and deals can fall through if their mortgage application is denied. Cash buyers have the funds ready, so there’s no waiting on financing.
4. Fewer Closing Costs: Selling to a cash home buyer often means fewer closing costs and no realtor commissions. This allows you to keep more of the sale price in your pocket.
5. Certainty: One of the most frustrating aspects of selling a home is the uncertainty of whether a deal will close. With cash buyers, there’s a much higher level of certainty that the sale will go through without delays or complications.

What This Means for Buyers

For buyers in Tennessee, particularly in places like Chattanooga, the current market offers both opportunities and challenges. On the one hand, with fewer homes selling and homes staying on the market longer, there may be more room for negotiation, particularly in areas where inventory is starting to build up.

However, mortgage rates remain a significant factor for buyers. Higher rates make monthly payments more expensive, which has priced some buyers out of the market entirely. For those still looking to buy, it’s important to shop around for the best financing options and be prepared to act quickly if the right property comes along.

The Tennessee real estate market, like much of the country, has entered a phase of cooling, with fewer homes being sold and properties taking longer to find buyers. While this can present challenges for sellers, especially those looking to sell quickly, there are still options available. Cash home buyers offer a fast, hassle-free alternative for those who need to sell their homes without making repairs or waiting months for a sale to go through.

If you’re in Chattanooga or anywhere in Tennessee and need to sell your home fast, consider reaching out to a local cash home buyer. It could save you time, money, and a lot of stress.

For homeowners who need to sell fast, consider contacting We Buy Houses Chattanooga at 423-205-1009. We offer fair cash offers and can help you sell your house quickly, regardless of its condition. Don’t wait—get in touch today to see how much your house could be worth!