As we enter the final season of 2025, interest rates are finally dropping. For the last couple of years, the higher interest rates have been a hurdle for buyers interested in owning vacation cabins they can rent out. We’ve met many who have been reluctant about purchasing a rental as an investment at a time when the economic challenges posed a concern for the tourism industry in our area. We’ve seen good news on that front as well.
Tourism is still your engine. Great Smoky Mountains National Park remained the most-visited national park last year with approximately 12.2 million visits in 2024, and the National Park Service just confirmed record overall park visitation nationwide in 2024. This creates momentum that will continue to support short-term rentals and second-home demand in our area. So, what does the short-term rental activity look like?
Short-term rental pulse (Pigeon Forge/Gatlinburg corridor):
Typical STR occupancy is between 53–62% across 2024–25. Remember, ADR and revenue hinge on size, finish level, and location. Larger group cabins continue to dominate bookings.
Continued interest in our tourism market of properties benefits our primary residential market too, so we also have good news in that area as a result.
Local housing is normalizing—not crashing. After the post-pandemic frenzy, East Tennessee has largely shifted into a “more normal” market: slower than 2021–22, steadier than 2023, and very price-sensitive. Regional Realtor’s analysis this summer called it “market normalization and gentle correction.” What does this mean for pricing in our neighborhoods?
Sevier County by the numbers:
- Median sale price: about $505K (Aug 2025), +9.9% YoY with around 87 days on average. Sale activity is lower than last year, so patience matters.
- Sale-to-list ratio is about 96–97 percent for properties that are priced correctly and days on market from another data set puts the time from start to finish closer to 90–93 days—useful for comp cross-checks and price-setting discipline.
- Active inventory is roughly 2,300 listings (Zillow snapshot, Aug 2025), with a median list price of about $632K. Also, the median days to pending (under contract with a buyer) is about 64 days. This shows evidence of a bid/ask gap that rewards well-priced, well-prepped homes.
What This Means for You
For Buyers
- You’ll need to leverage selection and terms. With higher inventory and longer days on market, you can often negotiate concessions, repairs, and rate buydowns—things that were less likely to be negotiated in the last few years.
- Focus on fundamentals. The properties that keep their value: A+ locations, smart floor plans, turnkey condition, and accurate pricing. Marginal assets need meaningful discounts or a clear improvement plan. Also, remember that larger cabins perform better on rental than smaller cabins right now. Coupled with the interest rates – which are still higher than they were 4-6 years ago, you will see a better net return on a larger property than a smaller one that is earning less.
For Sellers
- Price to the market you have, not the one you remember. I know this can be difficult to do if you bought in that higher market. However, today’s buyers are data-driven and patient. Aim to be the best-looking option at your price. Otherwise, you’re property will sit longer and invite aggressive concessions that end up causing the property to sell for far less than you had wanted for it. (The days on market data and sale-to-list ratios I mentioned above back this up.)
- You must have zero tolerance for deferred maintenance. Inspections are tougher. Unresolved issues resurface as price reductions or credits. Prioritize roof/HVAC/water systems, moisture management, exterior stain/paint, and STR-ready safety items.
- STR sellers: Show verifiable financials (actuals, not pro formas), highlight guest capacity, amenities, and proximity to attractions/trailheads—these still command a premium when condition and design are dialed in. You need to also understand that most buyers planning to use a rental company rather than self-manage will take the rental company’s recommendation about income potential over your report if you are including fees they won’t be able to collect on, such as cleaning fees. So make sure your information is as transparent as possible with a serious buyer.
MY “Deborah” “No-Regret” Playbook (Fall 2025–2026)
- Be the best—or be the best deal. In this normalization phase, the market rewards “best in class.” If you’re not that today, buy value and fix it (clear, budgeted scope) or price under the noise to move quickly.
- Underwrite with realistic STR inputs. Use current occupancy bands (low- to mid-50s up to ~60%), seasonality, and conservative ADR—then test sensitivity to 5–10% swings.
- Lock the condition before you list. Pre-inspect, correct moisture and mechanical issues, refresh stain/paint, deep clean, and stage. Then price to sell within the next 60–90 days based on comps, not just list competition.
- Use concessions strategically. Rate buydowns and closing-cost help can net you a higher effective price with today’s payment-sensitive buyers—often better than an equivalent straight price cut (and it appraises cleaner).
- Keep the macro in perspective. Even amid national turbulence (including periodic park service disruptions), the Smokies’ tourism base is resilient, and that has historically softened local housing volatility versus purely commuter markets.
The Takeaway
You’re right: it’s “normal” again—and that feels strange after the frenzy. But normal is navigable. If you prepare, price precisely, and prioritize quality, you win. If you’re buying, be patient and disciplined—great properties still trade fast, but there are real opportunities from fatigued sellers. If you’re selling, be the best or be the best value—that’s the safe path to a successful closing in the Great Smoky Mountains.
