Kingsport-Bristol, Johnson City MSA single-family new home construction still in low gear


April Tri

Data Source: U.S. Census Bureau.

By DON FENLEY

April’s new residential building permit reports told an all-too-familiar Tri-Cities story.

Fewer permits for privately owned single-family homes were issued. That  part of the region’s new home market performance has steadily declined since 2010. Reports from Builder magazine also show that sales are lower than last year. There’s little variation in the trend in the four-county Kingsport-Bristol and three-county Johnson City MSAs.

Here’s how the two MSA’s single-family construction market look when compared to a 2008 pre-recession benchmark:

–        Johnson City MSA – down 51%.

–        Kingsport-Bristol – down 39.7%.

When multi-family permits are added to the equation the Johnson City situation improves significantly, but only slightly in Kingsport-Bristol.

Employment/permit ratios as monitored by Metrostudy  and used to measure market conditions show demand declining in Kingsport-Bristol and slowly increasing in the Johnson City MSA. The e/p ratio uses increases and decreases in employment in relation to building permits as a housing demand metric.

April KP-JCSome expect construction to pick up in Kingsport in the coming months. Those expectations are being driven by reports that some of the local banks have decided to begin making loans for more spec homes.

The National Association of Homebuilders’ Association Housing Market Index is basically in a holding pattern. After four months it has shown little signs of fluctuation, “it’s clear that builder sentiment is becoming more in line with the market reality of a continuing but modest recovery,” said NAHB Chairman Kevin Kelly. “However, builders expressed some optimism that sales will pick up in the coming months.”

“Builders are waiting for consumers to feel more secure about their financial situation,” said NAHB Chief Economist David Crowe. “Once job growth becomes more consistent, consumers will return to the market in larger numbers and that will boost builder confidence.”

Job growth and employment in the Tri-Cities is showing early signs that things are beginning to improve after almost two years of contraction.



Tri-Cities labor market improves in April, weakness still evident

April 2014 v. April 2008 how Kingsport-Bristol, Johnson City MSA jobs hold up

April’s avg. private sector wage down in Tri-Cities


A drill-down on the single-family permits show Kingsport-Bristol is seeing a higher average construction cost than the Johnson City MSA.

-Twenty-two permits were issued in Kingsport-Bristol, and the average construction cost was $263,590.

-Thirty-five permits were issued in Johnson City MSA, and the average construction cost was $200,571.

The opposite situation exists when city-level permits are compared.

Kingsport saw four permits pulled in April at an average construction cost of $298,797.
Johnson City had 13 new single-family permits, and the average construction cost was $329,552. That total was pulled down by permits for four town-homes, which have a lower cost than the other homes.
Kingsport-Bristol new home sales, mortgages.
According to Builder magazine, 54 new homes were sold in the Kingsport-Bristol MSA in the 12 months that ended in January. That’s nine fewer than the same period of the previous year.  The  average new home mortgage was $232,000 up from $143,734 a year earlier.
Johnson City new home sales, mortgages.
Builder’s  new homes report for the Johnson City MSA is for the year-over-year period ending in February. A total of 115 news homes were sold in that 12-month period, down four from the period ending in January.  The average new home mortgage was $204,790 up from $187,178 a year earlier.

©Don Fenley

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