To make a successful real estate investment in Tennessee, conduct ample research on the housing market trends to help your find the best time to make an offer.
The COVID-19 pandemic brought up many uncertainties for real estate investors. Yet Tennessee managed to recover and stabilize the housing scene. So let’s find an answer if it’s worth investing your money in the Tennessee property and what attracts out-of-state investors.
What to Expect from the Tennessee Housing Market in 2022
Like most places in the U.S., the current market in Tennessee favors the seller. The demand for housing and renting is growing with lightning speed. The inventory shortage caused by the pandemic is not solved yet. However, that gives investors room for house-flipping projects. Top real estate agents in Tennessee can help you navigate through the local auctions to find property at reduced prices. On the regular market, the median house price in Tennessee is $203,134 and is forecasted to grow by 10% in the next year. The median property tax is one of the lowest across the nation and only 0.68%, which is excellent for any real estate investor. The Tennesse price-to-rent ratio favors long-term investors as the population and demand for housing are steadily growing.
Top Local Markets in Tennessee
The best tip for making a wise investment is to research the local market. Here are the top real estate scenes to discover in 2022.
The hidden gem of Tennessee! Memphis real estate agents are busy this season as the city attracts investors both in and out of state. And for a good reason! Memphis is a gold mine for flipping projects with affordable properties and high returns. Investors in Memphis spend half the time on house renovations, making sales faster than anywhere else across the nation. On average, you should expect to pay about $86,000 for a single-family detached house. Experts still expect the price increase all over Tennessee in the near future, which makes 2022 the best-suited time for successful investment.
The growing Memphis housing market provides endless opportunities for first-time and experienced investors. Whether you want to have a long-term investment with passive income from a rental or re-sell the place quickly, Memphis is the best city for property investments in the state. If you’ve just started your real estate passive income journey, that’s the city where you can be 100% sure of quick and high returns.
The Music City is home to a community of dynamic and young Americans. The influx of millennials to Nashville helped bring life back to the city after the pandemic. The steady economy in the city, low unemployment rate, and growing population of middle-class make Nashville an attractive investment market. With population growth, experts predict a rise in average house prices, rent costs, and demand. The median home value in Nashville is $455,300. While rising prices make it more competitive for individuals and families to buy homes, the market is ripe for investors looking for rental properties. However, that was always the case in Music City. So if you don’t want to flip properties, consider investing in long-term rentals in the thriving neighborhoods of Nashville.
Home to East Tennessee State University, Johnson City makes the list as one of the more affordable places to live. Combined with a stable economy, more and more newcomers are headed toward Johnson City, and the real estate market is on the rise. The median house price is $208,500 increasing the local equity positions. The market forecast predicts growing demand and prices. Yet the buyers market is less competitive than elsewhere in the state. The red flag for investors is the 5.8% unemployment rate in the city. However, the local real estate scene has proven to be stable and trustworthy. If you’re puzzled by the stats, monitor the trends for the upcoming year to secure your investment.
This city is an example of how improvements in the unemployment rate changed the game. Since lowering unemployment rates, Knoxville has become one of the hottest markets in Tennessee. Real estate is far more affordable than in Nashville, with an average home price of $294,800. Additionally, the quality of life level is increasing, making Knoxville the perfect place to settle down. Long term-investors can also take advantage of the inventory shortage in Knoxville. Many potential buyers are temporarily agreeing to rentals. With peak demand, the average rent price increased by 26% from 2021. Knoxville also offers opportunities for investors to make money on flips and renovations. The real estate scene has many affordable and suitable options. It’s not long before Knoxville will catch up with the nationwide profit margin trends.
Chattanooga should be your number one choice if you’re looking for a healthy real estate market. The city has a stable economy, a growing job market accommodating young professionals and entrepreneurs, a low unemployment rate, and good quality of life. The average house price is $141,200. The inventory shortage is significantly low, with many housing options on the auction. Chattanooga is a stable and attractive market for both long-term and house-flipping investors.
The Bottom Line
Tennessee’s real estate market made a tremendous jump, parallel to the national trend. Depending on your investment priorities, Tennessee has many great local scenes to choose from. For a faster return from the house flip, choose Memphis and Chattanooga. Nashville, Knoxville, and Johnson City have different price budgets, yet they offer a thriving environment for long-term real estate entrepreneurs.
Guide to the Tennessee Real Estate: Discover Your Investment Opportunities