Knoxville’s housing market is stopping remote workers from moving here
People with remote jobs are interested in moving to new places, but affordability is key.
It seems like a lot of people are moving to East Tennessee, but probably not if they have a remote job that allows them to work from anywhere.
According to a recent report released by Fannie Mae and PSB Insights and explained in the Knoxville Chamber’s latest Economic Conditions Outlook, the willingness of people who either work fully remote or are hybrid workers to relocate to a new metropolitan area or increase their commute time by 20+ minutes has increased to 22 percent in Q1 2023 from 14 percent in Q3 2021.
Fannie Mae’s monthly National Housing Survey asked more than 3,000 mortgage holders, owners, and renters between January and March of this year how remote and hybrid work has changed over the past few years and how it has impacted housing considerations. The report found that “affordability” was the top factor for people when picking a new home at 36 percent. “Neighborhood” was the top consideration at 49 percent in 2014, which was the last time the top consideration question was asked.
According to the August 2023 edition of East Tennessee REALTORS’s Market Pulse, “Affordability is driving housing market dynamics. At the beginning of 2022, East Tennessee homebuyers needed an annual income of roughly $59k to qualify for a mortgage on the median-priced home – but that number has since ballooned to more than $110k as of August 2023. With interest rates elevated and house prices holding steady, a sizable share of households cannot even afford a lateral move – much less an upgrade.”
Until the Knoxville area market increases its affordable housing inventory (including the “missing middle” housing types like duplexes, rowhouses, courtyard apartments, etc.), many remote and hybrid workers will not likely relocate here from other regions.
But that doesn’t mean the local rental and job markets aren’t busy with other people. Here are some notable statistics from the August Economic Conditions Outlook:
- The Knoxville area’s unemployment rate in July was 3.5 percent (down from 3.6 percent in June and unchanged from July 2022).
- Knox County’s unemployment rate in July was 3.1 percent (down from 3.3 percent in June and down from 3.3 percent in July 2022).
- For the month of July, there were 10,819 unique active job postings in the Knoxville area (up 9.6 percent from June and up 7.3 percent from last July).
- There were 7,290 unique active job postings in Knox County (up 10.6 percent from June and up 9.2 percent from this time last year).
- Home sales in East Tennessee declined 14.0 percent from June to July to a seasonally adjusted annual rate of 16,299.
- The median home sales price in the Knoxville area was $350,000 in July, up 8.0 percent from a year ago
- Knox County’s median home sale price was $372,000, an increase of 6.3 percent from a year ago.
For more economic survey results, insights, and statistics, you can read the full report here.