After a turbulent Q4, the Smoky Mountain real estate market entered Q1 2025 with a mixed bag of signals. Buyer demand remained present, but price sensitivity and affordability concerns clearly shaped market behavior. To give you insight into the current market conditions, we’ve put together this advanced Smoky Mountain real estate market report. Keep reading to see how the market fared in Q1 2025.
Closed Sales Report
The Q1 2025 Smoky Mountain real estate market report shows closed sales favored mid-sized, centrally located properties, with Sevierville accounting for nearly 58% of all transactions. Two- and three-bedroom homes led the way, with three-bedrooms comprising over 37% of sales volume, driven in large part by their dominant share of market inventory. While overall price per square foot (PPSF) remained strong, larger homes with six or more bedrooms saw the steepest drop in median price at -11.14%. Interestingly, smaller homes like one-bedrooms continued to command high PPSF, reflecting the market’s premium on efficiency and experiences. Buyers are still targeting value and properties with proven income performance.
Pending Sales Report
According to the advanced Smoky Mountain real estate market report, pending sales stayed strong in Q1, especially mid-range and luxury price points. Five-bedroom homes saw the biggest jump in average price, up to 25.44%, as buyers continued showing interest in high-end properties. At the same time, prices fell in areas farther from the main hubs, showing that buyers are more cautious outside the core markets. Homes under $500k are still selling fast, while more expensive properties are taking longer to move. Investors are still active, but they are being more selective about what and where they buy.
Active Sales Report
Inventory remained concentrated in two- and three-bedroom homes, which made up over 60% of active listings. Three-bedrooms led the pack, with a 22.32% year-over-year price increase showing steady buyer interest. Sevierville continued to dominate the region with nearly 60% of listings and a strong average price of $991,509. Gatlinburg held the highest average price overall at $1,034,396.
Smoky Mountain STR Report
The Q1 2025 Smoky Mountain real estate market report shows short-term rental (STR) performance took another hit this quarter, with average occupancy falling to 47.8% and gross income down 39% quarter-over-quarter. Three-bedroom units, once the workhorses of the region, saw the largest dollar loss in gross income (-$2,050). While six-bedroom homes still top revenue charts, the ROI compression across all sizes signals an adjustment period. The bright spot? Booking lead time held steady at nearly 60 days, and the dominant stay length (2 nights) has not changed. This is a seasonal dip, not a demand collapse.
Smoky Mountain Condo Report
Condos mirrored the broader STR slowdown, with ROI turning negative across all unit sizes. Three-bedroom condos still lead occupancy (56.8%) but posted a -4.82% ROI, while one-bedrooms suffered the steepest price and revenue drops. Median prices on one-bedroom units fell nearly 50% quarter-over-quarter. However, steady average square footage increases for smaller units suggest developers may be adjusting product to meet buyer preferences. Investors should keep a close eye on stabilization patterns in this segment.
Final Thoughts on the Q1 2025 Smoky Mountain Real Estate Market Report
While occupancy and revenue continued to dip from their 2023 highs, investors who are positioned with solid fundamentals (right size, right location, right price) are still capturing strong returns. Our data this quarter reinforces what we’ve long believed: long-term winners are those who can interpret shifts early and have positioned themselves in a way to easily adjust to the changing demands of the Smoky Mountain real estate market. Whether you’re watching price-to-income ratios, gauging booking patterns, or evaluating inventory levels, Q1 showed us it’s not a time to panic; it’s a time to position.
Find out more about investing in the Smokies and reach out to us at Local Realty Group to find out how we can help you navigate the Smoky Mountain real estate market!
