The Tennessee real estate market has experienced notable changes in recent times, with varying trends affecting home prices, sales volume, and buyer behavior. In this blog, we will delve into the latest statistics and examine the implications of these trends on the state's housing market. Additionally, we will explore how Tennessee compares to other states in terms of buyer interest and regional migration patterns.
Home Prices and Sales Volume
In March 2023, the median home price in Tennessee reached $359,700, reflecting a 1.9% increase compared to the previous year. While this rise indicates a steady appreciation of home values, it remains relatively moderate, making the market appealing to a wide range of buyers. However, it's important to note that the number of homes sold experienced a significant decline of 17.0% year over year, with only 7,820 homes sold in March 2023, compared to 9,420 homes sold in March 2022.
Days on the Market and Inventory Levels
The median days on the market increased by 25 days, reaching 58 days in March 2023. This longer timeframe suggests a slightly slower pace of home sales, which could be attributed to factors such as increased competition among sellers or a more deliberate approach by buyers. Meanwhile, the number of homes available for sale in Tennessee rose by 25.9% year over year, totaling 28,975 homes in March 2023. This increase in inventory provides potential buyers with a wider selection and more opportunities to find their ideal homes.
Newly Listed Homes and Months of Supply
Despite the overall rise in inventory levels, there was a decrease of 12.7% in newly listed homes compared to the previous year. This decline indicates a potential slowdown in the pace of new listings entering the market. Additionally, the average months of supply increased by 1 year over year, resulting in a 3-month supply in March 2023. This figure suggests a slightly more balanced market, providing buyers with a reasonable number of options while maintaining a sense of urgency in their decision-making process.
Pricing Dynamics and Buyer Negotiation Power
In March 2023, 20.0% of homes in Tennessee sold below the list price, marking a decline of 25.6 points compared to the previous year. This decrease indicates a reduced level of negotiation power for buyers, likely resulting from increased competition and limited inventory. Additionally, the percentage of homes with price drops rose to 21.6%, up from 11.0% in March of the previous year. This shift may indicate that sellers are becoming more flexible in their pricing strategies, potentially creating opportunities for buyers to secure favorable deals.
Comparative Analysis: Regional Migration Patterns
Tennessee has emerged as a sought-after destination among homebuyers searching to move to a different metro area. From February to April 2023, it ranked among the top five states buyers searched to move to, along with Florida, Texas, Arizona, and South Carolina. This increased interest in Tennessee signifies its attractiveness as a place to live and invest in real estate.
In contrast, California, New York, the District of Columbia, Massachusetts, and Indiana were the top five states homebuyers searched to move from during the same period. This indicates a significant outflow of buyers from higher-cost and densely populated areas to more affordable and potentially less congested regions like Tennessee.
The Tennessee real estate market in 2023 demonstrates a combination of positive and challenging factors for buyers and sellers. While home prices have experienced modest growth, sales volume has declined. The increased inventory levels provide buyers with more options, albeit with slightly longer days on the market.