Knoxville Housing Market 2026: What Sellers Need to Know

Knoxville's housing market is at an inflection point. The pandemic-era frenzy has cooled, but the fundamentals that made East Tennessee attractive—affordability, no state income tax, quality of life—remain intact.

For sellers, understanding this shifting landscape is critical. This guide breaks down the latest data, explains what's driving the changes, and helps you decide whether now is the right time to sell—and how.

Current Knoxville Market Statistics (Q1 2026)

Here's a snapshot of the Knoxville metro real estate market as of January 2026:

Data sources: Zillow, Redfin, Tennessee Realtors Association, Knox County Register of Deeds

Price Trends and Appreciation

The 2020-2024 Boom

Knoxville experienced extraordinary appreciation during the pandemic years:

• 2020: Median $225,000
• 2021: Median $270,000 (+20%)
• 2022: Median $325,000 (+20.4%)
• 2023: Median $355,000 (+9.2%)
• 2024: Median $365,000 (+2.8%)
• 2025-26: $357,000-$368,000 (-2% to +0.8%)

Over five years, the typical Knoxville home gained nearly $140,000 in value—a 62% increase. That growth has now plateaued as the market normalizes.

Current Price Dynamics

Prices are stabilizing but not collapsing. Key observations:

• Price cuts are common: Over 35% of listings have reduced their asking price
• Premium neighborhoods holding value: Bearden, Sequoyah Hills, Farragut remain stable
• Value neighborhoods softening: South Knoxville, Fountain City seeing modest declines
• New construction competing: Builder incentives putting pressure on resale prices

Knoxville vs. National Trends

Knoxville remains affordable compared to national benchmarks:

• 31% below national median: US median is ~$430,000 vs. Knoxville's $357,000
• 14% lower cost of living: Overall living costs below national average
• No state income tax: Effective compensation boost for residents

Inventory and Days on Market

The Inventory Shift

Knoxville's housing supply has increased significantly:

• 2022: 1.4 months supply (extreme seller's market)
• 2023: 2.1 months supply (seller's market)
• 2024: 2.7 months supply (transitioning)
• 2026: 3.1-3.4 months supply (approaching balanced)

A balanced market is typically 4-6 months of supply. Knoxville is moving in that direction but isn't there yet—meaning sellers still have some leverage, just not as much as before.

Days on Market: The Real Story

The 74-day average tells part of the story. Here's the full picture:

• Priced right, good condition: 30-45 days
• Average pricing/condition: 60-90 days
• Overpriced or needs work: 100+ days

Homes that sit often need price reductions to sell, eating into your net proceeds. This extended timeline is why more sellers are exploring cash offers—trading some price for certainty.

Migration and Population Growth

Knoxville's Migration Advantage

Despite national cooling, Knoxville continues attracting new residents:

• Metro population: 807,000 (up 1.38% year-over-year)
• Tennessee's share: 18.7% of state's migration goes to Knoxville metro
• Top origin states: California, Illinois, Florida, New York

Migration Trends

While still net positive, migration patterns are shifting:

• California inflows: 17,067 net to Tennessee (down from peak)
• Remote work settling: Fewer pandemic relocations, more intentional moves
• Retirees: Steady stream attracted by tax advantages and outdoor recreation
• Young professionals: UT graduates staying in the area

What Drives Knoxville Migration

• No state income tax: Major draw from high-tax states
• Affordability: Homes cost 31% less than national median
• Outdoor recreation: Smoky Mountains, lakes, hiking
• Quality of life: Low crime, good schools, moderate climate
• Job growth: Oak Ridge, healthcare, UT system

Economic Drivers

Major Employers

Knoxville's diverse economy provides stability:

University of Tennessee Impact

UT Knoxville is a significant economic engine:

• 28,000+ students: Create consistent housing demand
• $1 billion annual impact: Salaries, spending, research funding
• Rental market stability: Student housing occupancy exceeds 95%
• Graduate retention: Many graduates stay in the area

Oak Ridge Corridor

The federal presence provides unusual stability:

• 14,600+ federal jobs: Y-12 and Oak Ridge National Lab combined
• Recession-resistant: Federal employment less cyclical
• High salaries: Above-average income supports housing prices
• Growth potential: Continued investment in nuclear and research facilities

Neighborhood-by-Neighborhood Breakdown

Premium Neighborhoods

Bearden (37919): Knoxville's most established neighborhood. Median $385K, prices stable. Walkable to restaurants and shops. Strong investor interest due to rental demand.

Sequoyah Hills (37919): Historic waterfront homes. Median $450K, holding value well. Larger lots, established trees. Limited inventory keeps prices firm.

Farragut (37934): Top-rated schools, suburban feel. Median $475K, slight softening. Family buyers still active. New construction competing.

Mid-Tier Neighborhoods

Hardin Valley (37932): Fastest-growing area. Median $380K, new construction heavy. Strong appreciation potential. Schools driving demand.

Powell (37849): Family-friendly suburb. Median $320K, stable. Good value for families. Active investor market.

West Knoxville (37922/23): Largest geographic area. Median $360K, mixed performance. Some areas strong, others softening.

Value Neighborhoods

South Knoxville (37920): Gentrifying slowly. Median $275K, some softening. Investors see long-term potential. Urban proximity advantage.

Fountain City (37918): Older housing stock. Median $265K, renovation opportunities. Investor interest for value-add plays.

Halls (37938): North Knox affordability. Median $290K, stable. Family buyers on budgets. Growing slowly.

For detailed analysis, see our 12 Knoxville Neighborhoods Where Investors Pay Top Dollar.

2026 Forecast: What's Ahead for Knoxville

Price Outlook

• Short-term (6 months): Flat to slightly negative (-2% to 0%)
• Medium-term (12 months): Modest appreciation (+3% to +5%)
• Long-term (3 years): Continued steady growth as fundamentals remain strong

Factors Supporting Prices

• Continued migration from high-cost states
• No state income tax advantage
• Strong employment base (federal, healthcare, education)
• UT enrollment growth
• Affordability compared to alternatives

Factors Pressuring Prices

• Higher mortgage rates reducing buyer purchasing power
• Rising inventory giving buyers options
• Price fatigue after years of rapid appreciation
• New construction competition
• Economic uncertainty

Interest Rate Impact

Mortgage rates remain elevated compared to pandemic lows. Every 1% rate increase reduces purchasing power by roughly 10%. This is the primary factor slowing the market—not a lack of buyer interest.

What This Means for Sellers

If You Need to Sell

In a normalizing market, your options are:

Traditional Sale:

• Price competitively from day one
• Expect 60-90 days on market
• Be prepared for negotiations and potential price cuts
• Budget for repairs, staging, and holding costs

Cash Sale:

• Close in 7-14 days with certainty
• Sell as-is, no repairs or staging
• Avoid months of uncertainty
• Accept 70-85% of market value

The Math Has Changed

In 2021-2022, the gap between cash offers and market sales was significant. Today, that gap has narrowed:

• Traditional net (after costs): 88-92% of list price
• Cash offer range: 70-85% of market value
• Real gap: 5-18% (not 30-40%)

When you factor in 3+ months of carrying costs, repair investments, and the risk of price cuts, cash offers become more competitive.

Best Strategy by Situation

Data Sources: This analysis draws from Zillow Home Value Index, Redfin market data, Tennessee Realtors Association reports, Knox County property records, US Census Bureau population estimates, and Tennessee Department of Revenue statistics. Data as of January 2026.