KNOXVILLE, Tenn. (WATE) — Right now, dozens of people are looking to buy a home in Knoxville but finding the right house is a challenge.
Some economists believe we’re on the verge of an affordable housing crisis. Although a lingering question is, should I rent or buy a home in Knoxville?
Julio Co is coming up on a year of calling Knoxville home. He rents a house with his fiancé.
“Once we figure out where we want to put stakes down, we’re going to buy,” Co said.
For the almost newlyweds, that place could be Knoxville, only time will tell. But he may need some luck finding the right home because sales are on fire.
“Pretty much anything with a roof and four walls, even three walls, people are taking three walls now,” realtor Ryan Levenson said. “All kinds of facets of the market are selling pretty well.”
Levenson is also the president-elect of the Knoxville Association of Realtors (KAAR). According to him, some deals are done within an hour.
“Yes, this is the wildest. Both my parents were in real estate, and this is the wildest they’d ever seen it too,” Levenson said. “They reference the 90s and early 2000s as being great, but I don’t think anyone has seen it like this.”
“We started to see this happening the year before the pandemic, but it was exacerbated by the pandemic and has really blown up. And I think Knoxville is permanently here on the map,” KAAR Governmental Affairs and Policy Director Hancen Sale said.
Realtors report many customers are offering thousands of dollars above the asking price for a house.
“In February 2022 about 43% of homes sold above the asking price,” said Sale.
“We’re seeing a lot of site unseen offers at this time so as a buyer’s agent I would never recommend you buy a house unseen but there’s a lot of people doing that trying to beat the competition,” relator Marian Epps said.
But with mortgage and interest rates rising, as well as rents, is it the right time to buy?
“It’s always smart to buy not only because I sell houses but because if you’re renting, you’re just paying somebody else’s mortgage,” Levenson said.
“From the data, it is relatively cheaper to own if you can,” Sale said. “Relatively to renting at this point in time so if you can find a home within your price range.”
However, that’s where Sale believes there’s a problem, affordable homes are scarce in Knoxville.
“Two-thirds of the population makes $75,000 or less,” said Sale
For that group, Sale reports only about a third of active listings are affordable.
“That bottom third of listings, that’s a really small number,” Sale said. “We have very few active listings overall and then what’s affordable to somebody making more than the medium income is just a fraction of that. What we’re seeing is, there’s big implications for affordability. There’s big implications for economic development.”
Right now, the median home sale price in Knox County is $327,450 which is nearly up 27% from this time last year.