Knox County Housing Market Update
For the first time in 2025, home sales are showing growth across every primary metric — year over year, month over month, and year to date. September brought unseasonably strong sales, thanks in part to movement in mortgage rates, and the momentum could signal the strongest housing market performance since 2022. Optimism is emerging nationally and locally as both inventory and buyers continue to return.
One clear takeaway is that an effective pricing strategy has never been more critical. As the spread between list price and sale price begins to normalize, sellers who price smartly are best positioned to capture strong buyer demand.
Market Highlights
Sales growth: Up 2.1% from July and 7.4% from August 2024
Median sale price: $408,450
Inventory: Increased 31.4% compared to last year
Time on market: Just half of homes went under contract in 28 days or less (up from 20 days last year)
Pricing trends:
Only 39% of homes sold for asking price or above (downward trend continues)
18.3% sold above asking
7.9% sold for $10,000+ over asking
2.7% sold for $25,000+ over asking
Luxury market: 5.5% of homes sold for more than $1 million — the highest this year
Sale-to-list ratio: 98.6% (slightly down from July but still above August 2024’s 97.6%)
New construction: Made up 11.9% of all sales
What’s Driving the Market?
August’s boost in sales was partly due to seasonal factors but also fueled by optimism in lending. 30-year fixed mortgage rates eased into the lower 6% range, prompting a spike in applications. Still, some buyers remain hesitant, waiting to see if rates and affordability fall further.
At the same time, buyers are becoming more selective. In the current market, buyers are expecting more value for their dollar. They want modern amenities, move-in ready properties, and little to no DIY work. As a result, homes are spending more time on the market.
Outlook for Fall 2025
It’s not a buyer’s market yet, but conditions are shifting toward balance. Increased inventory and more cautious buyers mean that homes are no longer guaranteed to sell fast at top dollar.
The good news? The market is stabilizing while continuing to grow. Although 39% of August sales closed at or above asking, this number is moving back toward pre-pandemic “normal” levels of 28–30%. This return to balance suggests that East Tennessee real estate is becoming healthier and more sustainable for the long term.
For sellers, this means strategy matters: pricing correctly from the start is the key to attracting the right buyers. For buyers, more choices and longer days on market provide opportunities to negotiate and find a home that fits their needs.
