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The Tennessee Conservative [By Jason Vaughn] –
According to a new study by GoBankingRates.com, several Tennessee cities and towns may become unaffordable places to own a home in the near future.
Coming at no surprise, Tennessee’s third largest population center, Knoxville, makes the list but a few others may come as a surprise to many.
The study predicts that the home values in Knoxville will rise by 23.1% within one year’s time. With Knoxville already being one of the more expensive cities to own a home in the State, the study suggests that home ownership may be too expensive for the majority of people by 2024.
Surprisingly, the Tennessee city that ranks 49th in the state in population, is projected to be too expensive for home ownership by 2026.
The study predicts that Crossville’s home values will increase by 24.1% within one year. If current trends continue, home ownership will not be a possibility for most by 2026.
Following Crossville is Cookeville, 23rd largest city in Tennessee based on population, and home to Tennessee Technological University.
Home values in Cookeville are projected to increase by 22.4% within one year, making home ownership overly expensive by 2028.
And finally, the study predicts that Clarksville, Tennessee’s 5th largest city in population, will have a home value increase of 20% within one year making homes too expensive for many by 2031.
However, the President of Greater Nashville realtors, Steve Jolly, states that he doesn’t expect home values to rise as quickly as they predict.
Jolly states that the study is flawed because its predictions are based on the current home value increases that he believes will not continue to rise at the same level in years to come.
“They use a one-year estimate of price increases in those areas. And then they use that same one-year increase and broadcast it over five years, which most of the time would seem okay, except for the one year they used. If you look at all that data, they used about a 20% or higher projection in all those cities. And I just don’t think we’re going to have that,” Jolly said.
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In contrast to the projections made by the GoBankingRates.com study, Fortune.com recently listed Clarksville as one of the 40 housing markets in the U.S. that will see a decline in the near future, predicting home prices could drop as much as 20 percent.
Fortune’s article uses data from Moody Analytics to predict a drop in housing values for many cities across the U.S. within the next 12 months due to a currently overvalued market. The article places Clarksville in the top 40 overvalued markets, placing the overvaluation at an estimated 48%.
However, the 2021 President of the Clarksville Association of Realtors, Christian Black, has skepticism about Fortune’s prediction.
Black told Clarksville Now that the Fortune article does not take into account the number of buyers migrating to Clarksville from the higher value markets of places like California and Chicago.
Black said, “I don’t know that they’re taking into account baby boomers moving here from higher taxed states. I don’t think they’re taking into account the outside money that’s coming in. It’s not uncommon to get two or three closings in a row that are California buyers.”
Black stated that with the combination of COVID, the great recession and the increase in remote work opportunities, more young people have been able to move away from those high-population, high-cost areas and into Tennessee.
He also stated that increased access to high speed internet in Tennessee’s rural areas has made the state more favorable for these individuals overall.
About the Author: Jason Vaughn, Media Coordinator for The Tennessee Conservative ~ Jason previously worked for a legacy publishing company based in Crossville, TN in a variety of roles through his career. Most recently, he served as Deputy Director for their flagship publication. Prior, he was a freelance journalist writing articles that appeared in the Herald Citizen, the Crossville Chronicle and The Oracle among others. He graduated from Tennessee Technological University with a Bachelor’s in English-Journalism, with minors in Broadcast Journalism and History. Contact Jason at news@TennesseeConservativeNews.com
One Response
I presume, unlike Williamson County and its cities, these cities and their governments were just not prepared for the demand, thus, the precipitous increased values given short supply. Just a note to everyone… bureaucrats, educrats, and politicians, all real estate professionals know that growth will pay for itself, if our politicians wouldn’t spend the dollars generated by building growth like ‘drunken sailors’. Be prepared for it. Also, another note in regard to affordability, I ask you this: Has 2008 been gone so long we don’t remember it? It is coming back with a vengeance and in fact, may already be here. Our down cycle time has been a consistent economic factor for the last 50 years and likely beyond. We just simply put out of our minds the down times like a ostrich with its head in the sand…..its a natural economic phenomenon. Be ready for it this time.