Are Home Prices Dropping in Tennessee? | 2025 Market Trends by ACE Holdings

What's happening in Tennessee’s housing market

Recent data shows Tennessee home values hover around $336,119—up just 0.4% over the past year, indicating a fairly stable market (zillow). This suggests that, overall, prices are neither sharply rising nor plummeting across the state.

Limited statewide drops, but local cooling

In cities like Nashville, home prices rose +3% year-over-year in May, with the average sale price at about $853,811, highlighting a robust but slowing market (nashvillesmls). Still, buyers are getting more negotiating power due to increased inventory and modest price adjustments (nashvillesmls).

Meanwhile, Zillow forecasts that U.S. prices could dip ~1.7% from March 2025 to March 2026—but Tennessee cities like Knoxville are still projected to see modest growth (+1.7%), reinforcing a mixed and nuanced outlook (resiclubanalytics).

Is a drop happening—or just a slowdown?

• National slowdown: Zillow projects a mild 1.7% drop nationwide, reflecting a cooler but not crash-level market (resiclubanalytics).

• Southern cities: Some areas in the Sun Belt, including Memphis, are experiencing price cuts and longer market times, making them more favorable to buyers (loanpronto).

• Middle TN outlook: Experts agree local markets like Nashville, Murfreesboro, and Franklin are stabilizing. A forecast predicts no dramatic drops, perhaps slight price adjustments rather than sharp declines .

Metro breakdown: What's happening locally?

Nashville

Metric Data YoY Home Price Change +3% (avg. sale price $853,811) Inventory +29% vs. last year Days on Market 26 days (avg); 54 days median in broader reports (nashvillesmls, loanpronto) Months Supply ~4.9 months—near balanced market

Murfreesboro & other suburbs

• ZHVI values are higher: e.g., Murfreesboro ~$428K, Smyrna ~$407K (zillow).

• Growth is slowing, but prices remain stable.

Memphis

• Laggard market with rising inventory, homes staying longer, and more price reductions—buyers have leverage (marketwatch).

Why prices haven't dropped sharply

1. Persistent demand – Middle TN continues to draw newcomers due to jobs and quality of life.

2. Inventory rising, but not flooded – More homes are listed, easing seller dominance, but supply is below peak levels .

3. Interest rates stuck – High rates (around 6–6.5%) reduce affordability but don’t trigger crashes (resiclubanalytics).

4. Strong economic fundamentals – Local employment growth and limited overbuilding support price stability .

Outlook for middle TN homeowners & buyers

• Buyers: Gaining advantage—more options, moderate prices, and buying power.

• Sellers: Should price competitively to attract offers; high-end homes may need adjustments.

• Looking ahead: Expect stabilization—slow price growth or slight dips, with no market correction forecasted (loanpronto).

What to do now

For Buyers

• Get mortgage pre-approval early.

• Explore homes listed for 30+ days.

• Negotiate — price cuts are more common now.

For Sellers

• Price right from the start.

• Be flexible and open to incentives.

• Stage and market well to stand out.

For ACE Holdings clients
ACE Holdings, as a committed Middle TN real estate partner, can:

• Provide custom market analyses by metro/suburb.

• Help position, market, and negotiate for optimal results.

• Apply local insight in growing markets like Murfreesboro, Franklin, and Chattanooga.

Summary

Are home prices dropping in Tennessee?
➡️ No significant drops statewide, but markets are cooling.
➡️ Buyers gain negotiating power, with rising inventory and slower price growth.
➡️ No market crash predicted, just balance after years of rapid growth.

FAQs

1. Are home prices dropping in Tennessee?
No—overall values are stable with mild growth. Cooling is local and gradual.

2. Is Nashville seeing price decreases?
Not yet—prices rose ~3% over the last year. However, increased inventory gives buyers leverage.

3. Is it a buyer's market in Memphis?
Yes—Memphis inventory is high, days on market longer, and price cuts are common.

4. Will interest rate changes impact prices?
Yes—rates near 6–6.5% are keeping buyers cautious, balancing supply and demand (loanpronto).

5. Should I buy or sell now?
If you're financially ready, buyers can benefit from more choices. Sellers must price well and be flexible.

6. How can ACE Holdings help?
ACE offers local expertise, targeted marketing, and market insights to help navigate this stabilizing market.

Final thoughts

Tennessee’s housing market shows signs of balance—not crash. With ACE Holdings as your guide, navigating this market—whether buying, selling, or investing—means tapping into local knowledge, data-driven strategies, and tailored service. Reach out today for a personalized market evaluation and roadmap for your next real estate move!