Rotary Club of Farragut members learned this news during its Wednesday, Aug. 31, meeting in Fox Den Country Club.
“Home prices are 40-ish percent higher than pre-pandemic,” said Hancen Sale, government affairs and policy director with Knoxville Area Association of Realtors who serves as chief policy advisor and consultant to KAAR leadership and board of directors. “Home sales were up on homes almost 8 percent, which is one of the highest year-to-year increases we’ve seen ever in East Tennessee.”
However, he said active listings were down 33 percent.
“You’ll want to take one thing away from this presentation: ... you should not listen to national news,” Sale said. “Knoxville’s different. In 2008, Knoxville didn’t feel the (economic) impact the same way that other people did.”
Additionally, sales volume (in East Tennessee) has been up substantially — almost 30 percent — in 2021,” he added. “Just the total dollar amount of real estate changing hands, particularly in residential.
“Year over year, as of this summer, we are looking at price changes in a couple of different measures. In the upper 20-plus percent, year-overyear for home prices.”
This also is happening “in the rental market,” Sale said. “It’s not solely a for-sale, owner-occupied phenomenon. It’s really across the board.”
While active listings have been rising in the last few months as “mortgage rates are having a lot to do with that,” Sale said, “we’re still fairly below our pre-pandemic level.
“This is part of a long-term trend that didn’t’ just happen with COVID,” he added. “This is something that, demographically, economists have been saying was going to happen and we’re starting to see that. It was exasperated, unfortunately, by the pandemic.”
Regarding rental occupancy, “we’re almost at 99 percent in the rental market, which is substantial,” Sale said. “Not only is it more expensive to rent right now than it was previously, but it’s much harder to find available units.”
Sale said there are some key trends affecting the East Tennessee housing market:
• Early in the pandemic saw lower interest rates, which now are rising.
• But demand still is exceeding supply as people continue to migrate to East Tennessee from higher-cost metro locations, such as California, New York, Chicago and Nashville.
“Knox County is a huge recipient of people,” he said.
• Demographic trends, such as “Baby boomers are nearing retirement and going to downsize;” a huge swath of the older millennial generation is buying homes; and “more people are living alone, more than any time in history.
“That creates a really big problem,” Sale added. “We’re building homes that are predominantly three-bedroom, two-bath for a single person.”