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East TN Market Report- Feb 2026
Hope this helps cut thru some noise or speculation about the market.
TLDR: Market in a Minute
We’re at the end of the year and here's where things stand for the market.
East Tennessee home sales rose 15.1% from December 2024.The median sale price was $370,000 — no change from the previous year.
Total housing inventory has increased 18.7% from the previous year.
Half of the homes sold were under contract in 38 days or less, up from 30 days a year ago.
37.8% of homes sold for the asking price or above, with 17.5% selling for more than the asking price.
6.1% sold for at least $10,000 over asking and 2.4% sold for at least $25,000 over asking price.
The sale-to-list price ratio held steady at 98.3% – the same as a year ago.
New construction was unchanged at 13.6% of total home sales.
Data Deep Dive: How's the market?
Here’s the big picture first. East Tennessee is no longer in the chaos of the 2020–2022 boom or the shock of the 2023 rate spike.
We’re in what I’d call a reset-and-stabilize phase. Prices aren’t crashing. Sales aren’t exploding. The market is functioning again — just at a more rational pace. Think “healthy but selective.”
Where the market has been (the last few years) From 2020 through early 2022, demand exploded. Low rates, remote work, and out-of-state migration pushed prices up fast. Inventory collapsed. Buyers waived contingencies. Sellers had all the leverage.
Then in 2023 and early 2024, mortgage rates jumped hard. That shocked demand. Sales slowed. Many buyers paused. Sellers had to reset expectations. That period felt painful, but it did something important: it cooled speculation and forced prices to slow down rather than inflate further.
By late 2024 and into 2025, the market started finding its footing again.Sales in East Tennessee were up 4.7% in 2025, marking the second straight year of growth after several declining years. That matters — it tells us demand never disappeared, it just got rate-sensitive.
Where we are right now (end of 2025 / start of 2026) December 2025 was a strong month. Home sales jumped 15.1% year-over-year, which is unusual for December. That surge happened when mortgage rates briefly dipped close to 6%. Even though the rate drop didn’t last long, it unlocked pent-up buyers who were already watching and waiting.
Prices are holding steady, not running away.
The median sale price was $370,000, basically unchanged from last year. That’s a big shift from the double-digit price growth we saw earlier in the decade.
Inventory is higher than last year, but still tight.
Active listings are up nearly 19% year-over-year, which gives buyers more options. However, inventory actually dropped month-to-month going into January because strong December sales absorbed homes faster than normal. Homes are taking longer to sell.Median time to contract is now 38 days, up from 30 days last year. That’s a sign of normalization — not weakness.
Negotiation has returned, but it hasn’t disappeared. About 38% of homes still sold at or above asking price, and nearly 18% sold above asking. This isn’t a fire sale market. Well-priced homes still move.
A key shift most people miss: buyers are downsizing Buyers are choosing smaller homes. The median size sold in December was 1,742 square feet, below what used to be considered a traditional starter home. This is affordability in action. Higher rates didn’t kill demand — they changed buyer behavior.
Cash buyers are pulling back too. Cash deals dropped from 28% to 21% year-over-year. Combined with slower in-migration, this means financed local buyers are regaining some ground.That’s a healthy sign for long-term market stability.
New construction vs existing homes (important) Here’s something counterintuitive.
New construction in East Tennessee is often cheaper than existing homes right now.
In December:
Existing homes: $407,000 median
New construction: $360,000 median
Builders are using incentives, rate buydowns, and pricing strategies to move inventory. That’s why many buyers feel torn: existing homes in established neighborhoods are expensive and limited, while new homes are more affordable but often farther out or less developed. This creates a split market:Higher-end, established neighborhoods feel sluggish.Entry-level and affordable segments feel tight and competitive.
Both can be true at the same time.
Rent and affordability (why buyers are frustrated) Rent has technically dropped — about 1.5% locally in 2025 — but don’t confuse that with “cheap.”Since 2020, rents are still up about 63%, while wages are up around 33%. Nearly 60% of renters are still cost-burdened, meaning they spend over 30% of income on housing.
Seasonality matters more now. Rent turnover is happening earlier in the year, which pulls buyer demand earlier too — often when inventory is at its lowest.
This helps the sellers that may've been on the market a while get exposure and buyer's an opportunity to secure some assistance towards closing expenses.
Where the market is headed in 2026? According to predictions by East Tennessee Realtor Association East Tennessee is expected to see:
Home prices up ~3.1%
Sales volume up ~6.8%
Rent slightly down or flat
That’s not a boom. It’s not a bust. It’s a slow, grind-it-out recovery with real opportunities for buyers and sellers who understand timing, pricing, and negotiation.
The market favors:
Sellers who price correctly (not aspirational)
Buyers who are prepared and decisiveInvestors who underwrite conservatively and focus on cash flow, not appreciation hype
Bottom line, in simple terms The market didn’t break — it recalibrated. We’ve moved from frenzy to function. From emotion to math. From speculation to strategy. And honestly? That’s where the best long-term wealth is built.