Washington Co. TN dominated 2015 Tri-Cities high-end home market


  • Tri-Cities year-to-year high-end home growth rate outpaces Knoxville and Chattanooga.

New high-end home construction in the Tri-Cities nearly doubled in 2015 and Washington County Tenn. dominated the market. At the same time, the Tri-Cities growth rate for luxury homes was higher than it was in the other East Tennessee regions.

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Counties with five or more high-end permits were charted.

According to The Market Edge’s Q4 and annual report on new home permits there were 32 Washington County Tenn. high-end home permits in 2015, up from 18 permits the year before. A high-end home is defined by the report as one that’s 4,000 or more square feet or with $400,000, or more, construction costs.

Washington County Va. saw the second-best permit volume of 19, up from 12 the previous year.

Greene County had eight new high-end homes permitted compared to seven in 2014.

Every county in the region except Sullivan saw an increase of at least one high-end permit last year. Carter County had two permits, Hawkins and Scott Co. VA each had one high-end permit.

Sullivan County permitted eight high-end homes, down one from 2014.

The year-to-year growth for a luxury home in the Tri-Cities increased 52.2% in 2015. The annual total was 70  compared to 46 in 2014.

The Knoxville region saw a 20.2% increase while Chattanooga had an increase of 3.3%.

Jerry Petzoldt, General Manager of the TCI Group and developer of Old Island Homes in Kingsport, thinks the Tri-Cities demand for high-end homes demonstrates housing fear and uncertainty has passed and people are moving ahead with plans that were mothballed during the Great Recession.

Building material cost and financing cost are at an all-time low and with the sink in oil prices the petroleum-based materials like roofing, piping and the like will remain low, he said. “It’s a great time to build.”

The cost challenge is the competition for labor and subcontractors who left the building trade during the recession. “That has created an opportunity for young contractors to enter the subcontractor construction service business.”

“The other factor for the high-end home increase is the few local upscale neighborhoods have limited number of lots and no new lots are being developed. And if they were, the cost would be 50% higher than the existing limited inventory,” Petzoldt added.

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