Community Guide - Housing
Knoxville, Tennessee - Real Estate Guide

Experts predict new real estate projects, affordable prices

Thousands of new houses, condominiums and apartments will be built in the Knox County region this year, and home prices will remain affordable when compared to other overheated metropolitan housing markets, real estate experts predict.

A total of 12,785 residential building permits were issued in the eight-county region in 2004 and 2005, and market researcher Dale Akins said he expects the trend to continue.

"The national media is reporting a housing bubble. Don't believe it," said Akins, president of The Market Edge Inc., a Knoxville-based information reporting service.

"Housing demand is going to increase, some building material costs will decrease, and rising (mortgage) rates won't make housing unaffordable," Akins added.

The Market Edge collects data on new subdivisions, developments, building permits, employment and population for counties in East Tennessee and parts of Kentucky, Indiana, Virginia, South Carolina, North Carolina and Georgia.

A wide range of housing options is available in the Knox County region. Developers are building everything from starter homes to loft-style condominiums to estate home subdivisions.

In downtown Knoxville, several upscale condominium projects are planned, including Central Station Lofts, a $20 million new construction project at 350 S. Gay St. A development partnership called The Knox Merchant LLC plans to build a seven-story building that would offer 70 upscale condos.

"They will be the most distinctive condos in the city," said architect Buzz Goss, a principal in Knox Merchant.

On the south side of downtown Knoxville's waterfront, River Towne Condos will be completed this year. The 50-unit development has balconies overlooking the Tennessee River, a private marina with 20 boat slips and an outdoor swimming pool.

For those who prefer the suburbs, dozens of developments are under way. Some of the busiest new subdivisions include Glenlake and Kirkwood in Northwest Knox County and Shannon Valley Farms in East Knox County.

In West Knox County, construction has started on the residential portion of Northshore Towne Center. A mix of about 700 single-family, town-home and multifamily units are planned for the commercial-office-residential project at Northshore Drive and Pellissippi Parkway.

The diversity of housing product has attracted considerable interest from potential buyers, said Mike Stevens, president of Mike Stevens Homes Inc., which is building the residential portion of Northshore Towne Center.

In addition to a robust new home market, the market for existing homes in the metropolitan also is strong, according to data from the National Association of Realtors. The median sales price of existing single-family homes in metro Knoxville was $148,800 in the fourth quarter of 2005, a 10.1 percent gain from a median sales price of $135,200 in the fourth quarter of 2004.

The median is the market's midpoint, meaning half of the homes sold for more and half for less.

Condominium sales prices have appreciated even faster. The median sales price of a condo in the fourth quarter of 2005 was $138,600, a 14.5 percent increase from $121,000 in the same period of 2004.

Although Knoxville home prices are rising, metro area housing remains affordable when compared to prices elsewhere in the South and the nation.
The national median sales price for an existing home was $213,000 in the fourth quarter of 2005, a 13.6 percent jump from a median of $187,500 in the fourth quarter of 2004, NAR reported. The median sales price in the South was $185,300 in the fourth quarter of 2005, up 9.2 percent from $169,700 in the same period the prior year.