Tri-Cities new home market is finally taking off

After seven years of declining new home activity and another four years of slow growth, the market is taking off.

Tri-Cities area builders saw the first stirrings of the surge early this year, but the crunch showed up in the third quarter. That’s when the Johnson City Area Homebuilders Association’s showcase of homes kept bumping into a problem. Many of the homes entered were sold before the event launched. It’s a nice problem to have – especially for a housing market sector where recovery came slow – very slow. And no, it’s not back to pre-recession levels. That’s something some builders don’t see happening in the foreseeable future.

Currently, most builders say business is brisk across the region. Some Washington County builders say they’re selling new homes faster than they can get them built. And while the demand is concentrated in northern Washington County it’s not limited to the Gray area.

Travis Patterson of Patterson Homes and Eric Kistner, principal broker at Bridge Pointe Real Estate and Auction and president of the Northeast Tennessee Association of Realtors, see a similar demand crush in Sullivan and Hawkins counties.

Patterson’s market focus is on Sullivan and Hawkins counties. He recently launched a project just outside Surgoinsville. It involves assuming the undeveloped part of a project that began in 2008 but sidelined by the recession. He plans to build 14 spec homes on wooded lots. The homes will be offered in the $200,000 or under price range. “The first sales came before we got the site preparation on the first four-home phase was finished,” he said.

Patterson also builds at Old Island and Chase Meadows. He said many of the customers he’s seeing are Baby Boomers getting ready for retirement. They’re looking in the $270,000 to $300,000 price range, and those homes are selling almost as fast as we can build them.

Kistner said developers have done a good job getting out in front of the demand. “They have a renewed confidence in the market.”

Kistner main focus is the Edinburgh Community. It continues as a Sullivan County hot spot. “We’re constantly seeing more and more Eastman people,” he added. Eastman employees relocating to the area has always been a target market for Edinburgh.

Kistner added his firm is also in the planning stage for a development in Johnson City. We’re still working on a target market, he said.

Michael Garland, president of the Johnson City Area Homebuilders Association (JCAHBA) and Garland Farm Estates, says the market is strong, and the numbers speak for themselves. “Washington County is dominating the new home market.”

The local recovery from the recession has been slow and steady and unless there’s a significant upset in the economy should continue, he says. That recovery has him looking at another step at Garland Farms.  “I feel the market is at a place where I can take a look at it. I’m cautiously optimistic.” When asked about that undefined next phase and what buyers a looking for Garland said he’s considering something like higher-end patio homes.

Tim Hicks, Hicks Construction, and a former JCHBA president says on a scale of 1-to-10 the market is probably an eight right now. “It’s really good,” Hicks said he found the stories about the area not having enough new home inventory six to a year ago really hard to believe. “But the last 30 days has made me a believer.”

Matt Lorencen, part of the Gouge/Lorencen Team at ReMax Checkmate, handles much of the Orth Homes inventory.  He called the market “pretty strong” and added that Orth builds 65 to 70 homes a year – everything from condos to homes in the $200,000-to-$400,000 price range. “Just before the showcase of new homes he said Orth has an inventory of two homes. “We’ve been selling them when they’re still in the sheet rock stage.”

Kelly Wolf, Wolf Development, said his business is as good as he’s seen since the recession hit. “Honestly, we pinching ourselves about just how good it is and how great it feels to not have the proverbial anvil of a non-performing economy hanging over our head.”

His example of how things are going?

Twenty-four of the lots in his new 50-lot Douglas Chapel Estates have already sold.