Top 5 Residential Real Estate Investment Markets in Tennessee

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By Trent Seigfried Updated May 24, 2024
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Edited by Michael Yessis

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Medina is home to the best residential real estate investment market in Tennessee.

The 38355 zip code in Medina presents the greatest opportunity for investors among the 1,176 individual real estate markets in Tennessee we evaluated. We looked at property values, population trends, and six other metrics for each market. We used that data to calculate each market's InvestScore.

Top 5 Tennessee residential real estate markets

RankCity InvestScore Affordability Property value appreciation
1Medina1003.164.33%
2Knoxville1004.892.18%
3Waynesboro99.72.969.18%
4Camden993.571.43%
5Strawberry Plains97.43.979.33%
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1. Medina

We've identified the 38355 zip code in Medina as Tennessee's best real estate investment market. Here's why.

πŸ”Ž Key data about Medina

Data pointValueRank in state (of 1,176 markets)
Zip code38355N/A
InvestScore 100Highest
Typical property value $304,841[1]174th lowest
Five-year appreciation 64.33%[2]122nd highest
Household income $98,832[3]26th highest
Affordability ratio 3.121st most affordable
Five-year population growth 27.8%[4]10th highest
Unemployment rate 2.4%[5]39th lowest
Property taxes $1,384[6]188th lowest
Educational attainment 30%[7]95th highest
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Medina (zip code 38355) is the best residential real estate investment market in Tennessee. It has the 122nd highest property value appreciation among markets we evaluated, with a 64.33% appreciation of the typical property over the last five years.

Medina is the 21st most affordable market among the 1,176 Tennessee markets we evaluated, with an affordability ratio of 3.1.

2. Knoxville

The 37924 zip code in Knoxville is Tennessee's second-best residential real estate investment market.

πŸ”Ž Key data about Knoxville

Data pointValueRank in state (of 1,176 markets)
Zip code37924N/A
InvestScore 1002nd highest
Typical property value $321,166[8]185th lowest
Five-year appreciation 92.18%[9]10th highest
Household income $67,394[10]109th highest
Affordability ratio 4.8166th most affordable
Five-year population growth 21.6%[11]17th highest
Unemployment rate 2.1%[12]30th lowest
Property taxes $871[13]78th lowest
Educational attainment 25.5%[14]124th highest
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The 37924 zip code in Knoxville features a typical property value of $321,166, the 185th lowest in the state.

Property values have appreciated 92.18% over the past five years, the 10th highest increase among evaluated markets in the state. Knoxville homes have an affordability ratio of 4.8, the 166th most affordable in the state.

3. Waynesboro

The 38485 zip code in Waynesboro comes in at No. 3 in our ranking of residential real estate investment markets in Tennessee.

πŸ”Ž Key data about Waynesboro

Data pointValueRank in state (of 1,176 markets)
Zip code38485N/A
InvestScore 99.73rd highest
Typical property value $156,008[15]29th lowest
Five-year appreciation 69.18%[16]76th highest
Household income $53,104[17]204th highest
Affordability ratio 2.916th most affordable
Five-year population growth 0.0%[18]207th highest
Unemployment rate 5.6%[19]190th lowest
Property taxes $633[20]15th lowest
Educational attainment 18.8%[21]181st highest
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With a typical property value of $156,008, Waynesboro's 38485 zip code features the 29th lowest property values in the state.

Waynesboro homes have an affordability ratio of 2.9, the 16th most affordable among the markets we evaluated.

4. Camden

The 38320 zip code in Camden ranks No. 4 among Tennessee's residential real estate investment markets.

πŸ”Ž Key data about Camden

Data pointValueRank in state (of 1,176 markets)
Zip code38320N/A
InvestScore 994th highest
Typical property value $174,817[22]37th lowest
Five-year appreciation 71.43%[23]64th highest
Household income $49,774[24]64th highest
Affordability ratio 3.540th most affordable
Five-year population growth 4.2%[25]145th highest
Unemployment rate 4.8%[26]150th lowest
Property taxes $712[27]32nd lowest
Educational attainment 12.2%[28]266th highest
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Property values in Camden's 38320 zip code have seen the 64th highest increase among evaluated markets in the state, with an appreciation of 71.43% over the past five years.

Camden's affordability ratio of 3.5 makes it the 40th most affordable among the 1,176 markets we evaluated.

5. Strawberry Plains

The 37871 zip code in Strawberry Plains rounds out our top five residential real estate investment markets in Tennessee.

πŸ”Ž Key data about Strawberry Plains

Data pointValueRank in state (of 1,176 markets)
Zip code37871N/A
InvestScore 97.45th highest
Typical property value $272,498[29]138th lowest
Five-year appreciation 79.33%[30]39th highest
Household income $70,417[31]39th highest
Affordability ratio 3.967th most affordable
Five-year population growth 1.0%[32]193rd highest
Unemployment rate 3%[33]66th lowest
Property taxes $768[34]49th lowest
Educational attainment 12.7%[35]260th highest
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Property values in Strawberry Plains's 37871 zip code rose 79.33% over the last five years, ranking the city 39th highest among evaluated markets in Tennessee.

Strawberry Plains homes have an affordability ratio of 3.9, the 67th most affordable among the markets we evaluated.

How we rank residential real estate markets in Tennessee

We evaluated 1,176 markets on eight metrics, and then assigned an InvestScore based on their weighted and combined rankings. Each market corresponds to a specific zip code in Tennessee.

What is InvestScore?

InvestScore is a score on a scale of 0 (worst in state) to 100 (best in state) that estimates the residential real estate investment potential of a given market. It takes into account a suite of key data points for each city.

  • Typical property value: This measures the typical home value in this zip code, according to the Zillow Home Value Index. It reflects the typical value for homes in the 35th to 65th percentile range, including all homes, with the numbers smoothed and seasonally adjusted. We prefer lower property values, which indicate both more room for growth and a greater ease of purchase. We assign a weight of 20% to typical property values.
  • Property value appreciation: This measures how much property values have increased in the area over the past five years, according to the Zillow Home Value Index. We prefer a higher appreciation, as it indicates better returns on housing. However, past performance isn't indicative of future results. We assign a weight of 20% to property value appreciation.
  • Median household income: This is the inflation-adjusted median household income in the zip code, according to U.S. Census American Community Survey data. We prefer a higher household income, as it indicates local residents have more income to spend on housing. We assign a weight of 10% to median household income. We assign a weight of 10% to median household income.
  • Affordability ratio: This is the ratio of the typical home value to the median household income in the area. A lower ratio is better because it means more households can afford a home, which indicates higher demand. We assign a weight of 15% to the affordability ratio.
  • Population growth: This is how much the area's population has grown over the past five years, according to U.S. Census estimates. Higher is better, as it indicates residents are moving into the area at a rapid clip. We assign a weight of 10% to population growth.
  • Unemployment rate: This is the unemployment rate in the area, according to U.S. Census data. We prefer a lower rate, as it indicates the availability of steady employment in the area, meaning residents will find it much easier to afford homes. We assign a weight of 15% to unemployment rate.
  • Property tax: This is the median real estate property tax paid in the area, according to U.S. Census estimates. We assign a weight of 10% to property tax.
  • Educational attainment: This is the percentage of residents in the area that have obtained a bachelor's degree or better, according to U.S. Census estimates. We prefer a higher rate because it indicates  local residents who have higher earning potential and thus should be able to afford homes. We assign a weight of 15% to educational attainment.

Disclaimer: The information contained in this article isn't intended as, and shall not be understood or constituted as, financial advice. The information in this article isn't a substitute for financial advice from an investment professional or real estate agent who is aware of the facts and circumstances of your financial situation or the specifics of any individual property.

Article Sources

[1] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[2] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[7] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[8] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[9] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[14] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[15] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[16] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[21] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[22] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[23] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[28] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[29] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[30] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[35] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.

Authors & Editorial History

Our experts continually research, evaluate, and monitor real estate companies and industry trends. We update our articles when new information becomes available.

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