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Smoky Mountain Sales Tracker Released
10.8% Sale-to-List Ratio Gap
Justin Beasley
January 07, 2025
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Key Takeaways from December 2024 Market Data
10.8% Sale-to-List Ratio Gap
The average property sold at 95.5% of the list price, reflecting a 10.8% gap between the list price and final sale price. This underscores a buyer’s market where negotiation remains a critical tool for success.
Price Per Square Foot Trends
Well-located, amenity-rich properties are expected to hold or exceed the current average list price per square foot (PPSF) of $391.11.
Older properties in need of updates are likely to sell below the average sold PPSF of $367.78. Investors should consider renovation opportunities to capitalize on this gap.
Seasonal Gap Closure: Don’t Overreact
The narrowing gap between new listings (153) and sold listings (137) in December is a normal seasonal trend. While the 89% ratio of sold-to-new listings may seem like good news, it’s important to understand the underlying factors:
Buyers with cash are taking advantage of winter discounts and looking to reduce year-end tax burdens.
Motivated sellers are eager to close deals before the year ends, often adjusting prices for faster transactions.
This year’s gap closure is also influenced by:
Improved interest rates in the prior quarter, which temporarily boosted buyer confidence.
The recent national election, which may have reduced market uncertainty.
A touch of market fear about the future, encouraging buyers and sellers to act before potential economic shifts.
However, despite the narrowing gap, the absorption rate increased to 10.2 months, signaling ongoing challenges in clearing inventory. The current market bears strong similarities to January 2023, and with rising interest rates, it’s unlikely this trend is pointing in the right direction.
What Now? Recommendations for STR Investors
Target Strategic Areas
Focus on larger properties in Gatlinburg for premium short-term rental investments, as this market segment continues to command the highest returns.
For investors seeking more affordable entry points, consider smaller properties in Sevierville or Pigeon Forge, where price points are typically lower, and demand for family-sized rentals remains strong.
Leverage Unique Features
To compete in this inventory-heavy market, prioritize properties with standout amenities (e.g., mountain views, pools, or luxury upgrades) or those located in prime tourist areas. These features will help your property differentiate itself in a crowded market.
Negotiate Aggressively
With the absorption rate at 10.2 months and a high level of active inventory, the market heavily favors buyers. Use this to your advantage:
Submit offers below list price.
Negotiate contingencies and seek seller concessions, such as closing cost assistance or repairs.
Monitor Supply and Demand in Early 2025
Watch for changes in new listings and demand trends as the market transitions out of the slower winter season. The spring market (March–May) historically brings increased activity. Savvy investors will be closely monitoring supply and demand trends to spot key differences from previous year.
While the December market shows some positive signs for buyers, broader indicators (like rising interest rates and a high absorption rate) suggest that challenges remain. Short-term rental investors should proceed with caution but take advantage of the current buyer’s market to secure properties with strong long-term value.
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