2020 wasn’t a record-breaker for prime real estate, mainly due to the ongoing COVID-19 pandemic. However, 2021 saw real estate markets rebounding, especially in large cities like New York City and Los Angeles.
The pandemic also offered a unique opportunity in terms of house acquisition. Those who took advantage of low-rate mortgages managed to buy a property before high prices soared. Now, the sales are still up, the demand is massive, but the supply of housing is thinning out.
Here’s an overview of the Tennessee real estate market and a list of some of Tennessee’s most expensive home sales.
Overview of the Tennessee Real Estate Market
The housing prices on the Tennessee real estate market are determined by simple rules of supply and demand. Right now, the home prices statewide went up 20% year-over-year in December last year, which is a record high for the Tennessee housing market, but factors that have led to record-low supply and increased demand, though varied and complicated, can be brought down to three reasons:
- Supply metric
- The COVID-19 pandemic
The Supply Metric
To illustrate the current condition of the real estate market, we can look at the supply metric — a measure that tells us how many months it takes to sell all the homes on the current market at the current rate. For example, in a well-balanced real estate market, the supply metric is six, meaning it would take six months to sell all the homes currently on the market.
However, since 2019, the supply metric has dipped from approximately four to less than two, which signals two things: the sales of homes increased, and the entrance of new homes into the market has decreased since 2019.
The COVID-19 Pandemic
To some, the COVID-19 pandemic brought enough financial flexibility to purchase a home and to do so promptly. However, pandemic-induced lockdowns caused people to switch to remote work, and for many, a larger living space simply became a necessity.
Paired with record-low mortgage rates, this newly-found necessity for more space prompted many to purchase homes for themselves and their families. Admittedly, many of these real estates were located in more affordable neighborhoods, away from employment hubs and large metro areas. Regardless, it significantly boosted the demand, and the market couldn’t follow through.
Investment firms were particularly favored by the new situation regarding low mortgage rates, and many took advantage of the low-interest rates and the increased demand for housing — rentals in particular.
The pandemic had a significant role in driving up the demand for housing, but it’s hardly the only cause for the ongoing shortage and housing crisis. The lockdowns and restrictions made it impossible for new homes to be built, but the problem of short supply reaches beyond the COVID-19 pandemic.
According to the real estate agents of the National Association of Realtors, the U.S. built approximately 270,000 homes less per year on average, compared to 30 years ago. In other words, the NAR estimates that there would be 5.5. million more homes in existence were it not for the production drop that occurred over the past two decades.
To close the gap within the next decade, the U.S. would have to build more than two million houses annually, which is difficult to achieve, even under the best circumstances. However, assuming that materials supply isn’t affected by the pandemic, nearly 90% of projects would still remain affected due to the shortage of skilled labor.
Real Estate Prices in Tennessee
Real estate in Tennessee is a seller’s market; due to the very limited supply, the homebuyers often compete, which drives up the prices or speeds up the sales. Considering what stagnant listing really costs, rapid sales, even at reasonable prices, eventually benefit the seller.
With an inventory of homes on the market at an all-time low and increased interest in the Nashville areas (center of Tennessee state) caused by the low cost of living, it’s not surprising for homeowners to receive up to 30 offers for their property on a weekly basis.
Admittedly, only the Nashville area is considered somewhat competitive by the realtors, with the median home value sitting at $397,000. That’s 40.2% more than the Tennessee median home value, averaged at $263,989, with price per square foot sitting at $179 (Tennessee average), against Music City’s $236 per square foot.
Compared to 2012, the median home value in The Volunteer State increased by 65.9%, from $133,000 to the aforementioned $263,989 in Dec 2021.
The Most Expensive Home Sale in Tennessee
Here are some of the most expensive home sales currently listed by listing real estate agents, and please keep in mind that new listings are being added every day.
This luxury real estate features six bedrooms, thirteen bathrooms, and six garage spaces positioned on a 4.04-acre property. It’s equipped with dual-hand crafted iron staircases, three kitchens, three bars, nine fireplaces, a wine cellar, a screening room, a swimming pool, and over 100 chandeliers. It’s currently the priciest real estate on our list, with a sale price of $16.5 million.
This beautiful 7,000 square-foot home is located on beautiful farm ground in Columbia, TN. The primary residence alone includes five bedrooms and seven bathrooms, and it’s situated on a 59.50-acre estate. Besides the primary residence, there’s also a pool, a cabana, a party barn, and a large horse barn. Additionally, there’s a guest house attached to the property, as well as numerous utility buildings. The property is priced at $15 million.
Located on a five-acre gated property in the heart of Belle Meade, this 22,000 square-foot mansion features old Carolina brick frontage with a two-story colonnade, custom ironwork, and limestone balustrades. This billionaire-esque residence features six bedrooms, 13 bathrooms, a pool, a wine cellar, a massive dining room, and a tennis court. The asking price for this luxury home is $12.9 million.
Equipped with seven bedrooms, 11 bathrooms, a pool, and plenty of custom finishes, this expensive realty comes with a hefty price tag — $11.9 million. However, considering that the house is located on 8.3 entirely fenced, pristine acres of greenery, along with a 2/2 guest house, that price tag doesn’t seem as much.
Located two minutes from the interstate, this beautiful house sits on 35 acres of a stunning landscape littered with mature trees. The home itself has two primary suites, and two bonus rooms, with an unfinished basement. Only half the size of a nine-hole golf course, the property is apt for building additional homes, especially considering that the sewer is located 1,200 feet away from the property. The asking price is $10.5 million.
This beautiful estate located on five privately gated acres in Middle Tennessee features nothing but the best in luxury and high-tech convenience. It was recently remodeled with fully integrated LED lighting, has a kitchen with custom cabinetry, a private fitness room, a pool house, and an ultimate outdoor pool entertainment area. The asking price of this luxurious high-tech home is $10 million.
If graceful living in a European-type manor surrounded by beautiful landscape sounds appealing to you, you should check out this 10,978 sq. ft home. It has five bedrooms, seven bathrooms, central heating and air, and four-car garage spaces for $9.5 million.
Situated on a nine-hole golf court-sized property, this $9.3 million estate has more than 90 acres of large riding area, a nine-stall barn, a guest house, and other equestrian facilities. The primary residence is almost 15,000 square-feet large and overflows with western elegance. It has seven bedrooms, 11 bathrooms, a swimming pool, and a spa area.
This property features large rooms, soaring ceilings, plenty of storage, an entirely new roof, fresh exterior paint, and a salt-water pool that was featured in Southern Living magazine. It has five bedrooms and six bathrooms, and it’s located on a 72.1 acres estate, priced at $7.5 million.
If you like privacy, you’ll love this real estate. Located nearly at the center of 40 pristine cleared acres is a luxurious but somewhat small 2,800 square-feet home, with four bedrooms and two bathrooms. The entire estate is tree-lined and fenced and has a horse barn and loft, a riding area, and plenty of space for additional building, all priced at $6.9 million.
The Tennessee housing market has seen a major boom in median home value, over the past decade, with a 20% increase over the past 12 months alone. Massive demand paired with dwindling supply makes Tennessee a seller’s market in which homebuyers compete over property.
This is significantly driven by the relatively low cost of living across the entire state, with downtown Nashville being the only exception when compared to the national average.
To stay clear of stagnant listings and the included costs, avoid selling house online, listing your property under the “Buy my house Tennessee” ad. Instead, contact Fair Cash Deal; we buy houses Memphis residents are looking to sell promptly, in any condition, and you receive cash payments.