KNOXVILLE, Tenn. (WATE) — Following a slight cooldown in July, the Knoxville-area housing market is heating back up this holiday season. A record was set last month for the most home sales of any November in history, according to the Knoxville Area Association of Realtors. Home sales increased 9.9% from October to November and 11.2% from 2020.
Hancen Sale, government affairs and policy director for the association, said homes are still coming onto the market, but they’re being sold at a greater rate. In fact, half of homes sold in November were under contract in six days or less.
“It really seems like this is going to be an ongoing problem because no matter how many new listings come on the market, it seems they’re always being absorbed by people ready to buy,” Sale said.
That demand continues to drive home values. The median price of home sales was $295,000 last month, up $10,000 from October, and up 21.6% from 2020. Despite that, 38% of homes sold for more than asking price in November. More than 20% closed for at least $10,000 above and 7.1% sold for at least $25,000 over asking price.
Lacy Mellon, a realtor with Re/Max Tri Star, said this is a great time for those owning or selling a home; however, she said it depends when it comes to those hoping to buy.
For example, those moving from area with more expensive costs of living, like Southern California, are likely coming to Knoxville with a lot of equity.
“Your cash is going to be kind here,” Mellon said. “You will have an edge over most buyers.”
The National Association of Realtors found nearly 10,000 people moved to the Knoxville metro area in 2020. The growing demand, coupled with an already low inventory, puts homes, particularly those listed for $250,000 or less, in a highly competitive pool of interested buyers.
“All your buyers that need financing, especially FHA loans, THDA loans, things like that … they’re losing out to a lot of cash buyers,” Mellon said.
All the competition has led some of her clients to debate waiving their right to get earnest money back if they back out of a deal, skipping home inspections, not asking a seller for certain repairs, and paying cash for amounts that exceed the appraised value.
December could be another record-setting month, given active listings have fallen 25% since September, demand is still high, and prices continue to climb.
“It’s kind of the wild, Wild West out there in real estate right now,” Mellon said. “Every time I get a contract, I’m reading through the special stipulations trying to figure out what this buyer is doing to try to give themselves an extra edge over the next buyer.”
Mellon has even heard from some clients who have decided to take a break from searching.
“After they’ve lost so many offers, now they’re like, ‘You know what, we’ll call you in a year. … We’re going to sit tight for a year, see what the market does, and we’ll call you back,'” Mellon said.
A native to Knoxville, Mellon is flattered so many people love her city; however, she feels for those on the losing end of the hotter than hot housing market.
“Its pricing out a lot of people who grew up here that can’t compete with a lot of other people that are moving here and bringing their equity with them from selling wherever they came from,” she said.
Although mortgage rates are likely to begin slowly climbing, Sale believes the lack of inventory in the Knoxville area will result in 5-8% growth in home prices throughout 2022.