Johnson City, Washington Co. local markets with 2017 highest avg. home prices

  • Carter and Hawkins counties had best annual avg. price gains last year.
  • Elizabethton lead city markets with highest annual avg. price increase

By now anyone interested in the local economy or real estate knows that 2017 was another big year for both home sales and average price gains in the Tri-Cities region. It was the second-year residential sales were over 1 billion dollars. And despite the Tri-Cities’ improving job market real estate was again the top performing local economic segment last year.

And those who watch these blog reports know that Bristol TN and Bristol VA were the hot city markets for sales. But what the most and least expensive markets as determined by the annual average sales price of single-family homes?

Some will find it ironic that the two city markets that led the region in sales didn’t perform as well when ranked by average sales price.

Johnson City remains the most expensive city market and continues to lead the mark with the highest single-family average sales price.

Kingsport is a distant second.

Erwin, Bristol TN, and Greeneville have average prices that are similar.

Elizabethton holds down the next to the last spot in the regional ranking while Bristol VA was the least expensive city market last year.

Washington County TN – like Johnson City – continues to be the price leader among the local county markets.

And although the Washington Co. VA market was off its pace last year, it ranked in second place last year while Sullivan County was a close third.

The least expensive county markets were in Southwest Virginia.

It’s also noteworthy that although Hawkins and Carter counties were in the middle of the average sales price rankings, they had the largest annual price performance when compared to 2016.

Elizabethton outperformed the other city markets with the highest annual single-family resale increase price.

Tri-Cities add jobs for 7th year, employment and labor force increase

  • Johnson City MSA ends the year with more jobs than it had before the recession. Private sector workers see 8% annual average weekly wage increase.
  • Kingsport-Bristol reclaims 4,817 of the 6,100 jobs it lost during the recession. Private sector workers take 2% annual average weekly wage cut.

The Tri-Cities economy added nonfarm jobs for the seventh straight year in 2017. Preliminary, non-adjusted Bureau of Labor Statistics (BLS) numbers the seven-county region has replaced all but about 900 of the 10,200 jobs lost during the Great Recession.

December was also the fourth straight month the unemployment rate has been below 4%. The preliminary annual jobless rate was 3.9%. Since those numbers are preliminary, expect revisions in next month’s labor market reports – especially the household numbers.

Annual employment data show there were 3,444 more Tri-Cities residents with jobs in 2017 than there were in 2016 and the improving jobs market resulted in additional 1,295 people joining the labor force.  Pre-recession comparisons for employment are not as good as the nonfarm jobs comparison. There were 15,183 fewer people who said they were employed last year than in 2008. And, there were 23,310 fewer people in the labor force than the most recent high. The 2017 annual labor force numbers also contrast 2016 labor force participation numbers recently released in a Census Bureau report. One factor in the smaller labor force is the number of residents aging out of the labor market.

Last year’s nonfarm job growth rate was 0.6%, down from 0.8% in 2016. The annual employment growth rate was 1.6%, up from 1.2% in 2016 and the labor force grew at a rate of 0.6% compared to 0.5% in 2016.

While 2017 was a pretty good year for the labor market on the regional level, the progress was not evenly distributed. The three-county Johnson City Metropolitan Statistical Area (MSA) outperformed the four-county Kingsport-Bristol MSA in job creation, employment and average private sector wage growth.

JOHNSON CITY MSA

The Johnson City labor market ended 2017 with 350 more nonfarm jobs than it had before the recession. It was also the metro area’s best year for net job gains since the recession – 1,107 more than 2016.

Employment was up by 1,845 over the 2016 annual average, and the improving jobs market pulled in 952 more people than were in the labor force in 2016.

The annual employment growth rate was 2.2%, up from 1.6% in 2016 and the labor force increased by 1.1%, up from 0.9%. The preliminary, non-adjusted annual unemployment rate was 4.3%.

Preliminary numbers for the average weekly private-sector wage show an annual increase of 8.5%, up from 4.2% in 2016. While those increases are big numbers remember Johnson City metro area private sector workers saw their annual weekly average decrease every year from 2012 through 2015. The preliminary average for last year was $666.81. That number will likely be revised when next month’s reports are released.

KINGSPORT – BRISTOL

The economy of the four-county Kingsport-Bristol MSA has added nonfarm jobs for seven straight years. So far it has recovered 4,817 of the 6,100 jobs it lost during the recession. Last year there were 217 more than there were in 2016 as the annual growth rate dropped to 0.2% from 0.6%

Kingsport-Bristol’s annual employment increased by 1,576 people in 2017 and the improving jobs marked brought an additional 346 people into the labor force. The employment growth rate was 1.2%, up from 1% in 2016 and the annual labor force growth rate was 0.3% down from 0.5%. The preliminary, nonadjusted annual employment rate was 4.2%.

Private sector workers in the metro area saw their annual average weekly wage decline by 2% last year. The weekly average was negative for 10 straight months last year. November posted a 1% gain. December was unchanged from December 2016. Last year’s average weekly wage decline followed a 3% annual increase in 2015 and a 1.6% increase in 2016. The preliminary 2017 weekly average was $635.23, down from $648.23.

 

 

Bristol TN and VA lead cities home sales growth rate; Erwin, Elizabethton, Johnson City net best price gains

Last year was a banner year for single-family home sales in Bristol TN and VA.

Twin Cities resales’ year-over-year annual growth rate dramatically outperformed every other city market in the 2017 annual Trends Report from the Northeast Tennessee Association of Realtors.

According to that report, single-family resales were up 16.4% in Bristol TN and 16.1% in Bristol VA. The only other city market with an annual year-over-year increase was Elizabethton, up 5%.

Here’s how the annual resales of the region’s other markets looked like when compared to 2016 annual resales:

  • Johnson City, down 5.1%.
  • Kingsport, down 0.3%.
  • Greeneville, down 5.4%.
  • Erwin, down 5%.

But when the annual average price performance is compared to 2016, the Twin Cities didn’t fare as well. The best annual year-over-year gains came in Erwin, Elizabethton and Johnson City.

Here’s what the 2017 average sales price looked like when compared to the 2016 annual average:

  • Erwin, up 14%, an $18,253 improvement.
  • Johnson City, up 6.9%, a $14,316 improvement.
  • Elizabethton, up 11.2%, a $13,062 improvement.
  • Kingsport, up 6%, a $9,656 improvement.
  • Bristol VA, down 6.2%, a $7,426 decline.
  • Bristol TN, down 4.9%, a $7,310 decline.
  • Greeneville, down 1.3%, a $1,763 decline.

 

Large number of Tri-Cities residents of prime working age absent from labor market

Many believe those who are not working are doing so because they get enough government benefits to make staying at home a better option. Although there are some antidotal examples that support that opinion, there are no reliable data to back that opinion up as a primary reason.

Current Census estimates for the Tri-Cities show almost one-in-three people age 20 through 64 didn’t work in 2016. And the age group with the largest share of those who didn’t work were 55 to 64, typical the years for highest earning.

The numbers are a little better than our last visit to the American Community Survey’s (ACS) five-year estimated since they are from the 2016 ACS one-year study. The one-year estimate is more reflective of current conditions since they are not an aggregate of five years data. It should also be noted that while employment improved in 2016, we’ll have a much better picture of the labor market when the 2017 numbers come out since job growth was strongest in the first half of 2017. That report will be released early this fall.

For 2016 reports on who worked and who didn’t I excluded the 16 to 19-year-olds since those are prime school years. I also excluded those over 65 although many in that age group are still working. Everyone is included in the chart for those who want the big picture.

There are about 293,890 people ages 20 to 64 in the seven-county Tri-Cities area, and 81,702 of them (27.8%) didn’t work in 2016.

The number of Tri-Cities residents who didn’t work in past 12 months according to the one-year American Community Survey report.

Drill down to the metro area, and 29,196 in the 20-64 age group were in the three-county Johnson City Metropolitan Statistical Area (MSA). That’s 32% and about what you would expect for an area heavy in four-year colleges and universities. In the four-county Kingsport-Bristol MSA, 29.8% (52,506) of the people in this age group didn’t work.

The number of working age people who didn’t work is an issue because the region’s labor force participation rate has declined. A good rule of thumb is if you have less labor force participation, you’re going to have less economic growth unless it’s augmented with technology or higher productivity. And productivity in the Tri-Cities – as measured by per capita gross domestic product – is not growing. It’s down $3,719 from the previous high in Kingsport-Bristol and $1,917 in the Johnson City MSA.

In 2016 the Johnson City MSA saw a half-point dip in real GDP after a year of solid growth in 2015. But the Kingsport-Bristol MSA has seen year-over-year declines for four straight years. There’s a number of reasons for the decline. But the biggest is the region has been hit by a triple whammy of slow recovery from the Great Recession, a rapidly aging population, and stagnant – negative in all but two counties – population growth. Currently, about 22 area residents turn 65 every day, and that will continue for a decade or so. And for every live birth, there are 13 deaths.

But when you drill down on the numbers of those who didn’t work you quickly see that there’s something else at play. According to Census data 50,259 people 45 to 64 who should be in their peak earning years did not work. That’s 34.4% of everyone in that age group.

The ACS doesn’t tell us why the people didn’t work. Some are likely physically or medically unable to work. According to current Social Security information, there are 32,435 people collecting disability – but that number isn’t broken down by age.  (The just-released supplemental data tables for the ACS 2016 1-year estimates there were 57,742 individuals with a disability in the Tri-Cities. That an estimate of those with a disability, not those who have who qualified for SSI.) And even if all of them were in the 45 to 64 age group that still leaves about 20,000 who didn’t work in 2016. A popular prejudice among many in the area is the group of people didn’t work because they receive too many government benefits, but there’s little besides anecdotes and class prejudice to substantiate the opinion.

So why does the subset of workers who didn’t work get so much attention?

Simple, they are among those on the front edge of the demographic change that will set the economic tone for the Tri-Cities for the next 20 years. Here’s the big picture: 50,259 in the prime working years age group of 45-64 didn’t work; 69,370 worked full-time, and the 26,483 worked part-time in 2016.  That number of part-time workers means a little better than a third of the local jobs are part-time or contract labor. The national number is about one-in-four, but that’s another story. One that we’ll look at in an upcoming report that attempts to benchmark the new economic normal for the Tri-Cities and its two metro areas.

 

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