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Knoxville area experiencing unprecedented housing market

The Knoxville Area Association of Realtors reported record-high home sales and record low inventory in 2020.

KNOXVILLE, Tenn — The housing market is booming in Knoxville as businesses expand and more people move to the area.

The Knoxville Area Association of Realtors reported record-high home sales and record low inventory in 2020.

Researchers said home prices are likely to remain high and rising throughout 2021 but not as quickly as the previous year.

"Money is cheap to borrow right now so demand is up, supply is way low and you have this weird connection between those two that has really sparked a booming housing market in a recession which is very atypical," KAAR Governmental Affairs & Policy Director Hancen Sale said.

U-Haul recently named Tennessee the number one destination state in the U.S.

Realtor.com ranked Knoxville #32 on its list of top housing markets in the country.

But finding a home in the current climate is difficult.

"50 percent of homes are being snatched up within six days or less which is highly unprecedented," Sale said.

Sale said an inventory crisis has buyers and realtors scrambling to find homes.

Low-wage workers, first-time homebuyers, and people looking for houses under $500,000 have been hit especially hard.

"The $100,000 to $200,000 houses--you're competing with so many people right now. That's who's really affected, and they don't have the ability to raise their purchase price $20,000 in order to win the bid," said Ryan Levenson, principal broker at Re/Max Preferred Properties in Knoxville.

According to KAAR's most recent state of the market report, the number of houses for sale in 2020 was down 47.5% year-over-year.

New listings were down 6.1% from the previous year. Meantime, home sales increased 7%.

Credit: Kevin Bridge

Sale does not expect the market to change anytime soon.

"We're going to keep seeing home prices go up because the inventory's not going to change drastically in the short term," he said.