Kingsport new home construction trends higher in 2013

kpt 2013 ender

Kingsport single-family permits.

Kingsport’s new home industry closed 2013 trending higher but lagging pre-recession levels.

Ninety-four single-family home permits were issued last year. That’s 26 (21.7%) fewer than the 2008 total. From a trend perspective 2013 was the second straight year construction has increased in the Model City, but the recovery has been a slow slog from the 2011 market bottom.

New home shortage

One of the biggest changes last year was awareness about the broader effect of the agonizing slow recovery. In the summer of 2011 I wrote that one of the coming local housing issues wasn’t existing home sales but a new home shortage. That became a public reality when city official learned many of the new Eastman employees relocating from St. Louis were buying homes in Washington County instead of settling in Kingsport.

New residents and economic development

More than civic ego involved in their concern. Attracting new residents and the $25,000 per person in local services and retail sales each family brings with it has become form of economic development. The issue is now a topic in the city’s new strategic plan.

It’s a pretty safe bet that this year will see construction return to pre-recession levels. That’s good news because there’s a deficit caused by the lack of production during the recession. New homes are a critical factor in maintaining a healthy housing market, which accounts for about 12 percent of the city’s economy.

During 2013 local builders reported a more new home demand than they could meet. Current forecasts call for a moderating market this year, but there’s also reason to believe that new home demand here could take a bigger role. Still there are headwinds. Although local banks are beginning to get back in the game of lending for spec homes, money is still tight and interest rates are increasing. Construction costs are also headed higher.

Big is back 

One trend that bears watching in the coming year is the size of the new homes. Nationally, the average new home size took a recessionary dip from 2,521 square feet in 2007 to 2,392 in 2010. But as the new home market began to turn the size of new homes began to tick up. Last year’s average was just at 2,600 square feet.   A little better that one-in-three new Kingsport homes were above the new average. That also held for new home construction in the Johnson City market. But as a proportion of total new construction in the higher than average size there was stronger growth in Kingsport than its neighbor to the south. Still, in total numbers, single-family construction eclipsed Kingsport total by 64 units. The boom of multi-family construction in the Johnson City market also dramatically outnumbered growth in the Kingsport market. Old island   This 3,200 sq. ft. $650,000 spec home under construction at Old Island is an example of the higher end market that will be part of this year’s peak selling season. In June half of the new homes in construction were larger than the new norm. Living Large in Kingsport 

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