Why Companies Don’t Train Workers Anymore

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Kingsport says FY 2014 building season posts solid gains

According to a Kingsport new release Fiscal Year 2014 building season posted solid results for private construction investment, with outlays nearly double the rate demonstrated in the City in recent years.

At the same time, an independent financial services website has recognized Kingsport as tops among “Cities on the Rise” in Tennessee given economic fundamentals, while sales tax collections show further strengthening and existing home sale are also rising.

A total of 600 building permits were issued in FY 14, with 438 residential permits and 162 commercial for a combined value of $128.26 million, according to Kingsport Development Service’s Building Division. That’s up from $66.35 million in FY 2013.

“This strong growth is very similar to what we were accustomed to seeing in 2007, 2008 and 2009 due to commercial and residential investment, but led in 2014 by industrial reinvestment and resurgence in residential construction in our community,” City Manager Jeff Fleming said Wednesday. “It is particularly encouraging to see residential development returning to healthy levels, which shows faith in where Kingsport is heading.”

Eastman Chemical Company posted the largest single building permit in City history in FY14 with a $74.31 million permit for its new corporate business center. But Eastman also pulled three additional permits totaling $1.89 million for new industrial capacity.

Residential development grew by 10 percent in FY 14, with 87 new single family housing starts, at a total construction value of $17.54 million, up 39 percent from $12.61 million in FY 2013. Average construction cost was also up in a big way to $201,595 per unit.

In the commercial space, Aldi’s grocery store, Wendy’s, Krispy Kreme and Cook Out Burgers represent continuing retail reinvestment on Stone Drive, while Downtown continues to blossom, adding Macado’s  restaurant (under construction), facilities for a doctor and a dentist, new downtown loft apartments, and Ozark Mountain Brewing supplies, among others.

Home improvement and commercial reuse were also strong in the fiscal year, with 192 permits for additions and alterations issued at an estimated construction value of $21.63 million.

Of the total, 76 permits were for residential renovations, 31 for residential additions, and six permits issued for churches and schools.

Another 72 permits were written for commercial renovations at a total value of $17.6 million. The largest single commercial renovation permit was for $5.7 million at 2300 Pavilion Drive issued to National Healthcare Corporation.

Looking ahead to FY15, the Center on Stone is underway replacing an outdated Microtel on East Stone Drive, while a new retail location for MHC Kenworth is being constructed on the Airport Parkway, with strong interest being shown in developing the Riverbend property off Fort Henry Drive.

In 2015, additional residential development is expected to continue at Anchor Point, Chase Meadows, Edinburgh, Old Island, Polo Fields, Wind Ridge and the Summit at Preston Park.

Kingsport’s Building Division is also responsible for protecting neighborhoods by working to improve, remove and/or replace abandoned or dilapidated properties. In FY 2014, 31 houses were identified as substandard. In all, 10 properties were demolished, four by property owners and six by order of the Building Official.

“When taken as a whole, it is clear Kingsport is regaining momentum,” Fleming said. “We continue to focus on recruiting new jobs, retaining existing opportunities, and working to expand our housing options, both multi-family and single family residential. Expanding investment grows our tax base. An expanding base coupled with our internal focus on building efficiency and streamlining local government keeps the tax rate lower over time for all our residents and property owners.”

According to NerdWallet, statistics for population growth, employment growth and income growth for the years 2009 to 2012 indicate Kingsport led the way in Tennessee, ahead of even Franklin, with double-digit growth in income and population. The report authors note that “education drives growth in Kingsport,” with advanced manufacturing playing a major role in Kingsport and six of the top 10 “Cities on the Rise” in Tennessee.

Meanwhile, sales tax collections for FY 14 grew 1.77 percent. However, the first two months of FY 15 sales taxes collected in May and June were up by 5.68 percent over the previous year, while also coming in above budget projections.

And, in another positive indicator, the Northeast Tennessee Association of Realtors’ points out that in July, Kingsport home sales were up by 18.4 percent, representing the fifth double-digit sales increase this year. The average selling price for an existing single family home was up 2.2 percent to $162,181 last month.

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Hawkins Co. is Q2 Tri-Cities house flipping hot spot


Hawkins County was the Tri-Cities home flipping hot sport in Q2.

Although the number of flips was only 11, that was a 56% increase from Q2 last year.

Gross return on investment is much the same story. Hawkins County flippers averaged a 45% gross ROI compared to 25% during the same period last year. In hard money the average gross profit was $24,000, up from $13,871 last year.

According to Q2 Realty Track Residential Property Flipping Report, the Sullivan and Washington counties saw the most flips – 13 in each county.

The average gross profit was best in Washington County – $47,281. That’s a 53% ROI up from 41% during Q2 last year.

Sullivan County flippers averaged $32,841 ROI – 43%, down from 63% last year.

There were 10 flips in Greene County. The gross profit was $34,900. That a 28% ROI down from 46% last year.


Nine Tri-Cities areas see Q2 double-digit all-cash home sales

All-cash sales in four of the 10 Tri-Cities areas monitored by RealtyTrac’s U.S. Institutional Investor & Cash Sales Report increased in Q2 when compared to Q2 last year.

Institutional investor sales were up in four counties when compared to Q2 last year.

Here’s how the percentage of all sales the  all-cash sales looked during Q2 2014 compared to Q2 last year.

Johnson Co. – 64.1% up from 54.7%.

Greene Co. – 57.5% up from 52%.

Bristol VA – 57.1% up from 48.6%.

Carter Co. – 51.3% up from 38.5%.

Washington Co. VA 73.9% down from 84.1%.

Unicoi Co. 48.3% down from 59.4%.

Hawkins Co. 37.4% down from 42.5%

Washington Co. TN 36.9% down from 37.8%

Sullivan 31.6% down from 36.4%

Scott Co. VA 0% down from 8.3%.

Here’s how institutional investor sales looked like Q2 2014 v. Q2 2013.

Hawkins Co. 3.4% up from 2.2%

Washington Co. 1.7% up from 1.4%.

Greene Co. 1.3% up from 1%.

Carter Co. 0.9% cup from 0%.

Sullivan 2.6% down from 4%.

Johnson Co. 0% down from 1.9%.

Bristol VA 0% down from 1.4%

Washington Co. VA 0% down from 2%.

RealtyTrac’s report shows all-cash sales accounted for 37.9% of all sales of single family homes and condos nationwide in the second quarter, down from a three-year high of 42.0% in the previous quarter but still up from 35.7% in a year ago.

When compared to Q1, four of the local jurisdiction  showed increased. They include: Carter, Greene, Johnson and Bristol VA.

The report also shows that sales to institutional investors — entities that purchase at least 10 properties in a calendar year — accounted for 4.7% of all sales of single family homes and condos in the second quarter, down from 5.3% in the previous quarter and down from 5.8% a year ago to the lowest level since the first quarter of 2012.

When compared to Q1 the number of institutional investor sales were up. They were: Carter and Greene and Sullivan counties.

“The flurry of purchases by institutional investors and other cash buyers that kicked off two years ago when U.S. home prices hit bottom is finally showing signs of subsiding,” said Daren Blomquist, RealtyTrac vice president. “Over the past 10 quarters cash sales have accounted for 39% of (national) home sales on average, and institutional investor purchases have accounted for 5.3% of all home sales on average. Prior to that, from 2001 to 2011, the average quarterly cash share was 30%, and the average quarterly institutional investor share was 2.6%.”

“This is a classic good news/bad news scenario for the housing market,” Blomquist continued. “The good news is that fewer cash buyers should help loosen up inventory of homes for sale and reduce competitive bidding, giving first time homebuyers and other non-cash buyers more opportunities. The bad news is that some of those first time homebuyers and other non-cash buyers may already be priced out of the market thanks to the rapid run-up in home prices over the past two years in many areas.”

The report shows that U.S. cash sales hit a recent peak of 45.8% of all home sales in the first quarter of 2012, when home prices bottomed out, but were down to as low as 34.0% of all sales in the third quarter of 2013 before jumping to 36.6% in the fourth quarter on the heels of the rise in interest rates and jumping again to 42.0% of all sales in the first quarter of 2014, when new qualified mortgage rules from the Consumer Financial Protection Bureau took effect.

Cash sales in the second quarter were skewed higher on both ends of the home price spectrum. Nationally, cash sales accounted for 67% of purchases of homes selling for $100,000 or less, and cash sales accounted for 45% of purchases of homes selling for more than $2 million.

Cash sales also represented a larger share of distressed sales.

Report methodology

The RealtyTrac U.S. Institutional Investor & Cash Sales Report data is derived from recorded sales deeds and loan data. Statistics for previous quarters are revised when each new quarterly report is issued as more deed data becomes available for those previous months.


All-cash purchases: sales where no loan is recorded at the time of sale and where RealtyTrac has coverage of loan data.

Institutional investor purchases: residential property sales to non-lending entities that purchased at least 10 properties in the last 12 months.



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