Report: Knoxville area housing, rental prices expected to rise in 2023
A report by the Knoxville Area Association of Realtors predicts housing and rental prices to grow in ‘23 but not as quickly.
KNOXVILLE, Tenn. (WVLT) - 2022 was a hot housing market in Knoxville, with homes and rentals skyrocketing in price.
“It was bound to decelerate,” said Hancen Sale, Government Affairs and Policy Director for Knoxville Area Association of Realtors.
Experts are predicting the market to return to a more normal state. The KAAR is out with its housing forecast for 2023, and the report indicates a significant slowdown with home sales in the Knoxville area slowing down 10 to 12%.
However, home prices are still expected to increase by about 4%.
“Tennessee is well-primed to outperform the rest of the United States,” Sale said.
The National Association of Realtors is predicting Knoxville to be a top ten housing market in the new year, despite a potential recession across the country.
“A big reason why we think we’re going to continue to see growth is because our economy is strong,” Sale said.
As for rentals, the report predicts the average rental price to grow by about 4% too.
“The rent increases are going to be a little bit lower than what we’ve seen over the past year, so it’s welcome news for renters,” Sale said.
Here’s the good news for renters: a record number of new rental units are scheduled to become available in the new year, and the occupancy rate should fall to 96% which suggests a strong market, according to Sale.
However, he said Knoxville would only see a significant decline in rent if the occupancy rate drops further or if there’s more supply to meet the strong demand.
As for 20% and 30% annual rent increases, like we’ve seen the last couple of years in the Knoxville area, Sale believes those days are over.
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