East Tennessee, like many other states, faced a housing affordability crisis in 2023, with homebuyers spending over 40% of their earnings on mortgage payments. The anticipated drop in mortgage rates in 2024 is expected to bring relief, making homeownership more accessible. As rates decrease, more homeowners are likely to list their properties, increasing inventory and stabilizing prices. While significant drops in home prices may not be on the horizon, forecasts suggest a slowdown in the rate of increase.
Transitioning from the final quarter of 2023, it’s natural to observe a deceleration in activity during the winter months. Nonetheless, sellers with the motivation to capitalize on reduced competition and limited inventory managed to fetch top prices for their properties, maintaining the stability of prices in lake markets. Minor fluctuations persisted, contingent on location and property condition.
The anticipated improvement in inventory and a slight decrease in mortgage rates are expected to boost home sales in East Tennessee. With the surge in mortgage rates, peaking at nearly 8%, marking the highest level in 23 years. Forecasts for 2024 suggest a gradual improvement. Mortgage rates have already experienced a nine-week consecutive decline, with projections indicating a further decrease, albeit not anticipated to fall below 6%.Lawrence Yun, Chief Economist at NAR, forecasts a 13.5% increase in existing home sales, reaching 4.71 million units in 2024. Additionally, a continued rise in new home construction is expected to contribute to increased inventory, with 1.48 million housing starts projected for the year.
The recovery of housing inventory in East Tennessee, including lakefront homes, has lagged behind other regions in the state since the post-pandemic lows. In Knoxville, the total housing inventory was approximately 50% lower than pre-pandemic levels, contrasting with Nashville (down 15%) and the state as a whole (down 25%). This helps to explain the home price growth in East Tennessee, albeit at a more measured rate compared to the frenzied pace during the peak of the pandemic housing market.
Despite this, the market continues to be an appealing choice for buyers seeking either a vacation home or a permanent residence in a region known for its beauty and abundant recreational opportunities.
While the national housing market is shifting, our lake home market typically tends to be focused toward retirees, vacation homes, and investment properties so we don’t typically get affected quite the same as larger city markets. National headlines about the market don’t always reflect the local and niche markets, the best way to keep a pulse is look at the data in the local market and talk with our Lake Team.
Free to the public, the market report can help lake home buyers and sellers better understand their local market and how it relates to other similar competing markets. Finding an affordable lake home can be a challenge in the ever change real estate market.
Our report helps buyers understand:
How do lake markets compare statewide and regionally by price?
Which lake markets have the most affordable homes or land?
Which lake markets have the most homes in your target price range?
Our report will help sellers understand:
How does your lake market compare to OTHER similar lake markets around you?
How many homes are in the same price range as your home or lot (a key when pricing your property)?
LAKES WITH YEAR ROUND WATER – (4-6 FT. WATER LEVEL DROP IN WINTER MONTHS)
Tellico Lake offers beautiful Smoky Mountain Views and fabulous award winning communities. TVA also restricts future development on the lake which ultimately keeps price point for lakefront stronger.
CLICK HERE to view all active properties for sale on Tellico Lake.
This lake is nearby double the size of Tellico, Watts Bar Lake offers both a variety of lake communities and lake homes with few to no restrictions.
CLICK HERE to view all active properties for sale on Watts Bar Lake.
Ft. Loudoun Lake is a popular choice for folks wanting all the conveniences of living close to Knoxville and an active lake.
CLICK HERE to view all active properties for sale on Ft. Loudoun Lake.
LAKES WITH SEASONAL WATER – (20-50 FT. WATER LEVEL DROP IN WINTER MONTHS)
Douglas Lake offers private and seclusion while also being close to popular destinations such as Sevierville, Pigeon Forge and the Great Smoky Mountains National Park.
CLICK HERE to view all active properties for sale on Douglas Lake.
Norris Lake has the largest reservoir on a tributary of the Tennessee River and is a popular lake for all your favorite summer water activities and offers a variety of seasonal lakefront marinas and restaurants.
CLICK HERE to view all active properties for sale on Norris Lake
As a multi-state, full-service brokerage, Lakefront Living Realty has not only data on the different East Tennessee lake areas, we have local knowledge and specialize in the major lake communities such as Rarity Bay and Tellico Village. This quarterly report contains real estate information from the Knoxville MLS on the 5 major lakes where lake homes are sold.
Posted by Karen Millikan, Lakefront Living Realty