Kingsport-Bristol continues strong sales tax collections; rental market competition heats up

April was a good sales tax collections month for Northeast Tennessee metros areas everywhere except Morristown.

For the third straight month, Kingsport-Bristol led the region in the year-over-year metric. It also outperformed April’s state increase and was second to Clarksville for the state’s best performance. And it leads the region on the year-to-date performance compared to the first four months of last year.

With the exception of January, Kingsport-Bristol has outshined the rest of the region in the seasonally adjusted collections reported by Tennessee Advisory Commission on Intergovernmental Relations and Middle Tennessee State University. February’s spike in collections put the four-county MSA on the high road and although the year-to-date collections performance has been waning it still is a little better than double the region’s performance.

The four-county Metropolitan Statistical Area’s (MSA) had a 14% market share of all collections in the four-county region in April, which is 0.14% its 2017 annual market share.

Year-to-date seasonally adjusted sales tax collections vs. the same period last year.

The Knoxville MSA claims the largest share of sales tax collection (64.3%) followed by Kingsport-Bristol (14%) then Johnson City (13.4%) and finally Morristown (7.3%).

Neither of the Tri-Cities metro areas has been able to recover the sales tax collection regional market share they had at the beginning of the decade. The Johnson City high point was a 13.81%. It was 14.34% for Kingsport-Bristol.

Here’s how the region’s April collections looked like compared to April last year.

Kingsport-Bristol, up 5.1%

Knoxville, up 3.8%

Johnson City, up 2.1%

Morristown, down 4.8%

Statewide collections were up 4.3%, and Clarksville had the best April year-over-year performance, up 10.1%.

On the Tri-Cities level, April was the best performance the three-county Johnson City MSA has seen since December 2017. Its market share of the seven-county region’s total collections increased to 49%, the best it has been since October last year.

Consumer sales saw a moderate April increase as rising gasoline prices took a bite out of discretionary spending

Excluding automobiles, gasoline, building material and food services, U.S. retail sales were 0.4% better than April last year.

Rising gasoline prices is one of the primary headwinds facing the local economy as the region enters the summer market.

So far, the effects of higher building material costs and record-low have not slowed the housing market pace, but the existing home sales growth rate is slowing. Although builders continue scrambling to keep with new home demand new home permit growth has not measured up to its 17% growth estimate. And while employers continue to add jobs and unemployment rates are at record lows, wages in the region have not proportionally increased with other segments of the economy.

One bright spot that is beginning to emerge is competition in the apartment rental rent competition – especially in Kingsport. After a lot of pressure from owners to increase rents, the owner of the Model City’s four major complexes launched an aggressive $1 first-month move-in marketing campaign to up their occupancy levels and compete with the newer complexes that have recently come online.