Report: Nashville and Knoxville housing markets are some of the nation's most overpriced (Nashville-Davidson: fit in, condos)

[BuffaloHome]

Originally Posted by JMT

If small towns were included in this report, I'm sure Cookeville would be up there. While it's still cheaper, on average, than Nashville or Knoxville, it's nuts how expensive it's gotten over the last couple of years. It used to be almost unheard of for a house to sell for over $1 million in Cookeville unless it also included hundreds of acres for development. Now there are homes selling for over $1 million every week. The throngs of refugees from high tax states just keep coming. We're also seeing an increase in people moving here from the Nashville area as Nashville becomes more and more expensive. Just in the last couple of months:

https://www.zillow.com/homedetails/1...41990159_zpid/
https://www.zillow.com/homedetails/4...0532382_zpid/?
https://www.zillow.com/homedetails/1...1201324_zpid/?
https://www.zillow.com/homedetails/5...41990687_zpid/
https://www.zillow.com/homedetails/1...41998529_zpid/
https://www.zillow.com/homedetails/3...70532308_zpid/
https://www.zillow.com/homedetails/3...41982550_zpid/
https://www.zillow.com/homedetails/2...41999716_zpid/
https://www.zillow.com/homedetails/4...60245167_zpid/
https://www.zillow.com/homedetails/1...12152464_zpid/
https://www.zillow.com/homedetails/4...47159941_zpid/

The number of luxury homes sold in Cookeville continues to increase. Last month there were six sold for over $1 million. That is absolutely unbelievable. We're talking about a small town that's not a tourist town, it's not a resort, it doesn't have high end stores (not even a Target, at least not yet), and it doesn't have a history of being home to lots of wealthy people although obviously it's now been "discovered". It is a very attractive town, yes, with a thriving downtown and a growing arts and foodie scene. But high end? I never would've imagined. All these million dollar homes are selling fairly quickly, and there's not even a gated community in Cookeville. And none of these are on golf courses, either.

https://www.ucbjournal.com/ucbj-list...-in-june-2022/

The five most expensive sold last month:

5) 5BR/5BA on 1.1 acres in town. No pool. $1.075 million.




4) 3BR/5BA new construction just outside of town. No pool. $1.125 million.




3) 4BR/6BA on 11 acres just outside of town. With a pool and stables. $1.125 million.




2) 6BR/6BA on 3 acres in a historic neighborhood in the middle of town within walking distance of downtown and the university. No pool. $1.225 million.




1) 4BR/7BA on 4 acres outside of town. No pool. $1.4 million.

[Igor Blevin]

Originally Posted by danielj72

Knoxville was reasonable up until a few years ago. The craziness happened when the covid panic occurred and thousands of lockdown refugees fled places like California and New York all at once. Even with the lockdowns over the fleets of moving vans are still arriving. Never thought I would ever see Knoxville so expensive

Link to the "2022 State of the Housing Report" by the Knoxville Association of Realtors.

https://www.kaarmls.com/sites/defaul...ort-final_.pdf


Home sales really begin to soar after 2015. Yes, post Covid home sales take a jump, but the strong sales took off after 2015. Look how much higher they were than the previous peak in 2005, from 15,000 sales annually to the low 20,000s. So demand was soaring even before Covid. Knoxville was no longer a secret and was on a lot of people's radar. I would bet the Nashville market was much hotter.

The chart for Knoxville metro housing inventory on page 6 tells the real story. From 4,000 units in the summer of 2016, to 700 some units in the summer of 2021. That is an inventory collapse, and it hasn't gotten any better until rates leaped up the past 2 months, but inventory is still extremely low at about 1300. A far cry from 4,000 in summer 2016.

[dad2paisley]

I don't know why people wanna move to these cities. Nashville is becoming the new Los Angelos and Knoxville is an old crime riddled town. You can't even go to your local park to swim without your car being stolen.

[Jumeby]

Home sales in Tennessee and other states have already started to drop and the rate of decline will probably increase as we get deeper into this economic decline. With inflation on the rise along with home loan interest rates I doubt we will see a return of increasing home buyer frenzy for the foreseeable future.

Just my opinion


Greater Nashville home sales continue decline in June

The Deal Is Off: Home Sales Are Getting Canceled at the Highest Rate Since the Start of the Pandemic

[Serious Conversation]

Originally Posted by Jumeby

Home sales in Tennessee and other states have already started to drop and the rate of decline will probably increase as we get deeper into this economic decline. With inflation on the rise along with home loan interest rates I doubt we will see a return of increasing home buyer frenzy for the foreseeable future.

Just my opinion


Greater Nashville home sales continue decline in June

The Deal Is Off: Home Sales Are Getting Canceled at the Highest Rate Since the Start of the Pandemic

Nashville has local jobs. It’s the economic engine of Tennessee. There might be some decline, but it won’t be anything like rural areas and small towns that have no economic base and have run up for no real reason.

[Jumeby]

Originally Posted by Serious Conversation

Nashville has local jobs. It’s the economic engine of Tennessee. There might be some decline, but it won’t be anything like rural areas and small towns that have no economic base and have run up for no real reason.

Yes, the poorer people are always hurt the most in economic decline and recession. This includes the poorer people in Nashville.

[Dwexler]

Originally Posted by Serious Conversation

Nashville has local jobs. It’s the economic engine of Tennessee. There might be some decline, but it won’t be anything like rural areas and small towns that have no economic base and have run up for no real reason.

^^^^ This. If the country is going to have a recession in the near future, and the recession is bad enough to affect the job market, that will hurt the rural area housing market significantly. If people who are working remotely are faced with the decision of returning to an office, or other work location or finding another job in a rural area, housing in those areas will correct.
We are all witnessing a shift in the housing market right now. Home mortgage interest rates have tripled since the beginning of the year, market time of homes for sale is up, home listings with price decreases are up, new home starts are down, and inventory levels are rising. The Federal Reserve has made it clear there is no intention of it slowing it's rate hikes for at least the remainder of 2022. It's anyone's guess what the future may hold for real estate. It does seem though that the frenzy is coming to an end.

[Serious Conversation]

Originally Posted by Dwexler

^^^^ This. If the country is going to have a recession in the near future, and the recession is bad enough to affect the job market, that will hurt the rural area housing market significantly. If people who are working remotely are faced with the decision of returning to an office, or other work location or finding another job in a rural area, housing in those areas will correct.


We are all witnessing a shift in the housing market right now. Home mortgage interest rates have tripled since the beginning of the year, market time of homes for sale is up, home listings with price decreases are up, new home starts are down, and inventory levels are rising. The Federal Reserve has made it clear there is no intention of it slowing it's rate hikes for at least the remainder of 2022. It's anyone's guess what the future may hold for real estate. It does seem though that the frenzy is coming to an end.

While Nashville and Knoxville may be "overvalued," I don't think they are going to have huge prices declines - like I mentioned, that's where the jobs are. Metro Nashville is consuming the lion's share of growth for all of the state, which is very attractive to businesses from a taxes and regulations perspective. Knoxville is the flagship for anything 1.5-2 hours around it.

I'd be worried about communities in far Northeast TN that haven't had meaningful job growth, no big economic drivers, etc., in a recession/"recall the telecommuters to the big city offices" scenario.

There just hasn't been the economic growth, especially wage growth, in this part of the state, for the buyers dependent on the wages in the local economy to remain competitive.

[Jumeby]

Originally Posted by Serious Conversation

While Nashville and Knoxville may be "overvalued," I don't think they are going to have huge prices declines - like I mentioned, that's where the jobs are. Metro Nashville is consuming the lion's share of growth for all of the state, which is very attractive to businesses from a taxes and regulations perspective. Knoxville is the flagship for anything 1.5-2 hours around it.

I'd be worried about communities in far Northeast TN that haven't had meaningful job growth, no big economic drivers, etc., in a recession/"recall the telecommuters to the big city offices" scenario.

There just hasn't been the economic growth, especially wage growth, in this part of the state, for the buyers dependent on the wages in the local economy to remain competitive.

If Nashville's housing market is truly "overvalued" then they probably will experience significant downward pressure in housing values. This is the way it always works when demand drops significantly. We are experiencing recession, inflation and increasing interest rates with a forecast to get much worse. I don't see how they can avoid it.

[Jumeby]

Originally Posted by arctictropical

Inflation causes people to invest in real estate more, because this is where their money get preserved, unlike devaluing cash in the bank accounts or worthless US bonds paying nothing, or stock market casino. So inflation is what boosts home buying. That's kind of a known thing worldwide.
As to people going back to the offices after working from home...good luck seeing that one. I can believe that city prices might drop as most US cities are, frankly, real dumps now, but rural areas is what's desirable. Fast internet projects are reaching everywhere, constantly expanding.
I haven't been seeing any relief in prices on rural homes with land, same bidding wars are going.

A good investor would buy significantly overpriced homes on the precipice of a housing market crash?

I would at least wait until after the crash.

U.S. existing home sales slide again; prices hit fresh record high