The Tennessee housing market in February 2025 presents a complex landscape characterized by both growth and contraction across various metrics. The Median Sales Price for homes in the state stands at $381,000, reflecting a slight decrease of 0.6% year-over-year (YoY). This decline suggests a cooling in the market, potentially offering opportunities for buyers seeking more favorable pricing.

Conversely, the Median List Price has increased by 4.3% YoY, reaching $429,600. This rise indicates that sellers are optimistic about the market's potential, despite the slight dip in sales prices. The median Price Per Square Foot has also seen a modest increase of 2.9% YoY, now at $211, while the Median List Price per square foot has surged by 6.4% YoY to $230. These figures suggest a continued demand for housing, albeit at a more measured pace.

In terms of sales activity, the number of Homes Sold has decreased by 5.7% YoY, totaling 5,574 units. Pending Sales have also dropped significantly by 9.7% YoY, indicating a slowdown in buyer activity. New Listings have seen a slight decline of 3.9% YoY, with 8,580 properties entering the market. Despite these decreases, inventory levels have risen by 12.3% YoY, reaching 26,835 units, which may provide more options for prospective buyers.

The Months of Supply, a critical indicator of market balance, has increased dramatically by 80.0% YoY to 4.8 months. This substantial rise suggests a shift towards a more balanced market, moving away from the seller's market conditions that have prevailed in recent years. The Median Days on Market have increased by 4.0% YoY to 77 days, further indicating a slower pace of sales.

The average sale to list ratio has slightly decreased by 0.5% YoY to 97.2%, suggesting that homes are selling closer to their list prices. The percentage of Homes Sold above list price has declined by 2.2% YoY to 14.5%, reflecting a reduction in competitive bidding scenarios. Price Drops have increased by 2.8% YoY to 23.4%, indicating that sellers are adjusting their expectations in response to market conditions.

Finally, the percentage of homes going off the market within two weeks has decreased by 6.2% YoY to 30.4%, further highlighting the slower pace of transactions. This trend may provide buyers with more time to make informed decisions in a less frenzied market environment.

Overall, the Tennessee housing market in February 2025 exhibits a mix of stabilizing and cooling trends. While some metrics indicate a slowdown, others suggest continued demand and potential opportunities for both buyers and sellers. As the market evolves, stakeholders should remain vigilant and adaptable to the changing dynamics.