Drill-down on Q3 Johnson City, Kingsport-Bristol home sales adds perspective on housing market

Attom Data Solution’s Q3 Home Sales Report is one of those drill-downs that offers some context to everything you think you know about the local housing market. For instance:

  • Owners in the three-county Johnson City Metropolitan Statistical Area (MSA) who sold during Q3 got an average of $8,000 less than those who sold during the same quarter last year while sellers in the Kingsport-Bristol MSA got an average of $850 more.
  • The percentage of Johnson City metro area distressed sales was up 31% compared to last year, but those in Kingsport-Bristol were down 13.4%.
  • The median home sales price in the Johnson City metro area was down 6.3% and up 2% in Kingsport-Bristol.
  • The Q3 median sales price since the bottom of the recession was up 41% in the Johnson City MSA and 60% better in the Kingsport-Bristol MSA.
  • There were 470 all-cash sales in the Johnson City MSA and 429 in Kingsport-Bristol.
  • The area where the numbers parallel for both of the Tri-Cities’ metro area was the share of institutional investor sales. It was done in both regions compared to last year but that doesn’t mean it cratered. There were 83 institutional sales in the Johnson City metro area in Q3 and 21 in Kingsport-Bristol.

MEDIAN PRICE APPRECIATION

Attom’s report says the U.S. median home price increased 4.8% in Q3, which is the slowest rate of appreciation since Q2 2016. Locally, both the Kingsport-Bristol and Johnson City rate of appreciation was the slowest since Q1 2013. This year began with solid year-over-year appreciation for both metro areas – 23.8% in Johnson City and 9.4% in Kingsport Bristol. It declined from the beginning of the year in Q2 and Q3.

CLICKING ON CHART RENDERS LARGER VERSION

“The continued slowdown in the rate of home price appreciation nationwide and in many local markets is a rational response to worsening home affordability — which has deteriorated at an accelerated pace this year due to rising mortgage rates,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Markets not experiencing this price appreciation cooldown may have more of an affordability cushion to work with, but some are in danger of overheating if home price gains continue to run hot.”

The Northeast Tennessee marker is one of those with “more affordability cushion,” but most indicators from several sources point to local market slowing – just not as fast as what national numbers show. The Northeast Tennessee Association of Realtors (NETAR) Trends Report shows sales are still at record levels. The growth rate is seeing a normal seasonal slowing but closings are ahead of previous year’s pace. The big difference between the NETAR and Attom reports is the data coverage. NETAR’s reports are based on sales from the local multiple listing service (MLS) while Attom’s report is based on recorded sales of deeds, foreclosure filing, and loan data. Local MLS sales in Q3 accounted for about 70% of the Attom total from recorded sales deeds.

Median home prices are above pre-recession levels in 69 percent of markets nationwide. NETAR’s September report shows the year-to-date local average sales price was 3.4% better than the first nine months of last year. The 2017 local annual price was 8.5% higher than the pre-recession annual average.

DISTRESSED SALES

CLICKING ON CHART RENDERS LARGER VERSION

Sales of bank-owned properties, short sales and sales to third-party investors at foreclosure auction accounted for 11.6% sales of U.S. single-family and condo sales in Q3. Locally they accounted for 14.4% of sales in the Johnson City MSA and 11.8% sales in Kingsport-Bristol.

ALL-CASH SALES

All-cash sales accounted for 27% of residential sales in Q3, down from 27.4% in the previous year.

Here’s how those all-cash sales looked like on the local county level,  and the share of total sales  compared to Q3 last year

Carter Co. – 90 sales, 44.3% up 35%

Washington Co. – 352 sales, 32.8%, up 7%

Unicoi Co. –  28 sales, 45.7%, up 10%Q3

Sullivan Co. – 309 sales, 38.7% down 11%

Hawkins Co. – 83 sales, 41.3% up 10%

Washington Co. VA – 13 sales, 12.5%, down 59%

Scott Co. – N/A

Bristol Va. – 24 sales, 34.8% down 3%

INSTITUTIONAL INVESTORS

Sales to institutional investors (those who buy at least 10 properties in a calendar year) accounted for 2.8% of single-family and condo sales in Q3. That was a 2.1% increase from the previous year.

Here’s the snapshot view of the share of county-level institutional sales share of total sales compared:

Washington Co. TN – 9.9%

Carter Co. – 0.5%

Unicoi – 5%
Sullivan Co. – 1.9

Hawkins Co. – 2.5%

Washington Co. VA – 1%.

Scott Co. 0%

Bristol Va. – 0%

Report methodology

Data for the ATTOM Data Solutions U.S. Home Sales Report is derived from recorded sales deeds, foreclosure filings, and loan data. Statistics for previous quarters are revised when each new report is issued as more deed data becomes available for those previous months. Median sales prices are calculated based on the sales price on the publicly recorded sales deed when available. If no sales price is recorded then the purchase loan amount is used to calculate median price, and if no purchase loan amount is available, the property’s Automated Valuation Model (AVM) at time of sale is used to calculate the median price.

 

 

Tri-Cities labor market flirts with pre-recession levels; unemployment at 3.8%

For the second time this year there were more non-farm jobs in the Tri-Cities than they were during pre-recession benchmark and the region remains at full-employment status.

Preliminary, non-adjusted data from the Bureau of Labor Statistics show 204,600 nonfarm jobs compared to 204,400 in September 2007. Both of the seven-county region’s two metros logged positive, but unequal growth, for the month.

The three-county Johnson City Metropolitan Statistical Area (MSA) was 100 jobs shy of its pre-recession benchmark as it continues recovering from the first half of the year when it was the only metro area in the state showing year-over-year job declines. That metric has been stuck on 0.3% growth for three of the past four months. The growth rate was flat in July.

Kingsport-Bristol’s economy has picked up the slack with a positive growth rate every month this year. The four-county MSA’s economy has been adding jobs an average rate of 178 a month. It also had 700 more nonfarm jobs in September than it did the year before the Great Recession.

The private sector labor market picture wasn’t as strong as the nonfarm sector in September. It’s still 1,600 shy of the pre-recession benchmark.

Both the Johnson City and Kingsport-Bristol MSA had more private sector jobs than they did September last year. So far this year the Johnson City metro economy has been adding an average of five new private sector jobs a month while the Kingsport-Bristol is averaging 106 a month.

Compared to September last year, Johnson City’s job growth was strongest in professional and business services; construction; and the leisure and hospital sectors.

The sectors showing the most year-over-year losses were: trade, transportation and utilities; education and health services; and the government sector.

Kingsport-Bristol saw its best growth in the professional and business services; leisure and hospitality; financial activities; and the manufacturing sectors.

The biggest year-over-year job losses were the construction and information sectors.

LARGEST JOB SECTORS

Trade, transportation and utilities accounted for the most nonfarm jobs in September, followed by the government sector with education and health services close behind for third-place ranking.

EMPLOYMENT – 3.8% JOBLESS RATE

A rising jobless rate when the labor force is increasing is a good sign because the employment situation is pulling more people into the market. When the unemployment rate falls because of participation, it’s usually a bad sign

The number of people with jobs in the region and the labor force increased from August but both were less than they were September last year. The unemployment rate dropped to 3.8% – the fifth month it has been below 4% this year. The moving average employment trend has declined for three straight months.

Employment in the Johnson City metro area was up from August, but – like the region – it and the labor force were lower than September last year. The MSA’s moving-average trend has declined for four months. September’s unemployment rate was 4.1%.

Employment in Kingsport-Bristol was up when compared to August and both employment and the labor force were an improvement over last year. At the same time the employment trend has declined for the last two months. September’s unemployment rate was 3.6%.

PRIVATE SECTOR WAGES

The average private sector wage in both metro areas increased last month.

Kingsport-Bristol workers saw a 2.8% increase over last year for a $650 average. The average hourly wage was  $18.26.

Johnson City’s average was $703 a week, up 1.2% from last year. The average hourly wage was $19.97.

The Nashville and Knoxville MSAs had the highest wage averages in the state last month. Knoxville’s was $982 a week. The Knoxville average was $940 – the same as the U.S. average. Tennessee’s average hourly wage was $25.47 in September.

Kingsport-Bristol’s average private sector wage was the lowest in the state while the Johnson City metro area from third from the bottom.

 

 

Economy booming, but 2017 Johnson City Census data waves red flags

Last year was a good year for the Johnson City Metropolitan Statistical Area’s (MSA) economy. But a drill-down on the three-county metro area’s principal city shows some red flags of change from 2016 and patterns that don’t parallel with metro area booming economy data.

For example: while the region’s population was up, it declined in the city. The median household income declined, but the average family household income increased and nears the $100,000 a-year mark. It’s also noteworthy that full-time, year-round female workers got a big pay increase and made more money than their male counterparts, according to the recently released Census Bureau 2017 American Community Survey.

CLICKING ON CHART RENDERS LARGER FILE. Red vertical line marks approximate position of median household income

From the MSA perspective, the real GDP (total economic output) of the MSA had its third straight year-over-year increase, according to the Bureau of Economic Analysis. And when you look at the same data for the four metro areas in NE Tenn.  Johnson City’s growth rate was second to Morristown and that the two smallest economies outperformed the much larger Knoxville and Kingsport-Bristol MSA economies. Despite the GDP growth of the Johnson City MSA in the past three years, it has not recovered to its pre-recession high. Since 2009 the metro area’s economy has declined by $20 million. But considering the metro area’s growth trend $20 million is not a huge factor in a $6.1 billion economy. Those are real dollars adjusted for inflation – not current dollars.


Previous reports

New Census data show economic gains, losses in Tri-Cities 2 metro areas

New Census data shows Tri-Cities jobs, pay, income growth; public assistance declines

Tri-Cities sees first real economic growth since 2012; smaller NE Tenn. economies outperforming big metro areas 


POPULATION

The Johnson City MSA’s population grew by 3,013 in 2017. But the city saw a population drop of 1,160 people. The metro area’s 1.5% growth from 2016 was less than what the area had seen in previous years because its migration growth rate slowed. Migration is a big deal when it comes to population because the entire region has a negative natural population growth population. That simply means more people die than are born.

LABOR FORCE

CLICKING ON CHART RENDERS LARGER FILE. Red verticle line marks approximate position of median family household income

When you look at the working-age population (16 and older) the decline was much steeper than the overall population decline – 4.3% (2,419 people).

The city’s labor force participation rate dropped from 61.4% in 2016 to 60.7% in 2017. At the same time, there were 1,211 fewer people employed – a situation that carried over to the first half of this year when the Johnson City MSA was the only metro area in the state showing a jobs decline.

OCCUPATIONS

Here’s a 2017 v. 2016 snapshot of the ups and down by occupations and industry:

  • Management, business, science and arts occupations, up 2.2% (186 people).
  • Service occupations declined by 550 people (down 1%)
  • Sales and office occupations, up 1.8% (287 people).
  • Natural resources, construction, and materials moving occupations, down 2.4% (799 workers).
  • Production, transportation, and materials moving occupations, down by 0.7% (335 workers).
  • Construction, down 0.8% (295 workers)
  • Manufacturing, down 0.2% (166 workers).
  • Wholesale trade, down 0.2% (87 workers).
  • Retail trade, up 1.6% (369 workers)
  • Transportation, warehousing and utilities, down 2.9% (947 workers)
  • Information, up 0.4% (97 workers)
  • Finance, insurance, real estate, rental and leasing, up 1.9% (553 people)
  • Professional, scientific, management, administrative and waste management services, down 2.4% (902 workers)
  • Education services, health care and social assistance, up 5.6% (1,388)
  • Arts, entertainment, recreation, accommodations and food services, down 0.7% (373 workers)
  • Other services – except public administration, down 2.2% (743 workers)
  • Public administration, down 0.2% (79 workers).
  • The total number of civilian workers, down 1,211 from 2016.
  • Private wage and salary workers, down 2.4% (194 workers).
  • Government workers, up 0.6% (29 workers).
  • Self-employed in not incorporated businesses, down 3% (1,026 people).

HOUSEHOLD INCOME

The median total household income was $35,700. That’s down $5,642 (13.6%) from 2016. At the same time, the average household income increased by 1.6% to $62,252

Last year’s median family household income was $55,951, down 4.2% ($2,440) from 2016. But the average family income increased 25.5% to $90,716.

WAGES

The median earnings for workers was $22,229, down 6.3% ($1,500).

The median earnings for full-time male, year-round workers were $37,976, down 23.9% ($11,898)

The median earnings for full-time female, year-round workers were $39,255, up 10.2% ($3,643).

SOCIAL SECURITY, FOOD STAMPS, POVERTY

The number of households receiving Social Security declined 3.9% to 8,311 while the number of households receiving Social Security Supplemental Income declined by 3% (695 households)

The number of households receiving cash public assistance dropped to 204 from 858 in 2016.

The number of households receiving Food Stamps declined by 2.3% to 4,294 households.

The percentage of people who had an income below the poverty rate during the 12-month period was 22.1%, up from 19.3% in 2016.

 

Tri-Cities sees first real economic growth since 2012; smaller NE Tenn. economies outperforming big metro areas

Last year was the best economy the Tri-Cities has seen in five years. It was the first year since 2012 when the seven-county area posted real economic growth from the previous year. With that said, 2017’s real total economic output – gross domestic product (GDP) – has declined 5.7% ($979 million) from its 2011 peak, according to recently released data from the Bureau of Economic Analysis (BEA). And productivity in both the region’s metro areas still lags previous highs. In other words, the economy grew but has not recovered to its pre-recession levels, and the growth that has happened is not evenly distributed.

All-ind GDPAs welcome as last year’s 1.2% growth was it was a little less than half of the 2.5% U.S. real GDP growth rate. And when you move past the big regional picture distinct – sometimes stark – changes are evident as the economies of the area’s two Metropolitan Statistical Areas (MSA) continue restructuring from the Great Recession. But before we get into the weeds of the MSA economies there’s another big picture look that adds context to what follows.

Northeast Tennessee’s two smallest economies – the Morristown and Johnson City MSAs – outperformed the larger Knoxville and Kingsport-Bristol MSAs. Here’s how that year-over-year growth looked.

Morristown – 2.8%

Johnson City – 1.8%

Knoxville – 1.7%

Kingsport-Bristol 0.8%

Private ind GDPShifting back to the Tri-Cities two MSAs, Kingsport-Bristol’s all-industries real GDP was positive for the first time since 2012.  Although the four-county MSA’s economy is larger ($10.1 billion vs $6.1 billion) its real GDP has trailed the three-county Johnson City MSA every year since 2013. Real GDP measures the value of finished goods and services at constant base-year prices that are adjusted for inflation or deflation.

The BEA reports MSA level GDP in current-year dollars and the real GDP as chained 2009 dollars for 91 separate industry codes but dollar values for many are not reported to avoid disclosure of confidential information. That’s why the percentage change from the preceding year is used to track growth. All dollar references in this report are the BEA’s real GDP amounts.

Private goods GDPThe industry codes where the dollar values are printed offers some examples of the dynamic shifts as local economies move toward their previous high. In Kingsport-Bristol’s case, that high in the all-industry category was in 2012. Since then the economy of the region’s largest MSA has declined by $1.29 billion. The Johnson City peak was in 2009. Since then its economy has declined by $20 million.

Peak years for the economy of private sector firms align with all-industry previous highs. Since its previous high the Kingsport-Bristol private sector economy has declined by $1.35 billion. The Johnson City MSA private sector economy has declined by $51 million since its 2009 high.

Among the industry levels where year-over-year data is provided for both MSAs:

  • Kingsport-Bristol’s retail trade economy has outperformed the Johnson City metro area for the past two years.
  • Johnson City’s wholesale trade economy was up 9.4% last year compared to a 2.3% decline in Kingsport-Bristol.
  • Although Johnson City’s manufacturing economy is smaller than Kingsport-Bristol its growth rate dwarfed Kingsport-Bristol last year. It grew by 6.2%, while Kingsport-Bristol’s manufacturing economy had 0.5% growth.
  • Kingsport-Bristol’s finance, insurance, real estate, rental, and leasing economy had a 1% gain last year while it declined by 4.7% in the Johnson City MSA.
  • The professional and business services economy in the Johnson City MSA grew 7% in 2017 while it declined by 0.8% in Kingsport-Bristol.
  • Johnson City’s education services, health care, and social assistance economy grew by 0.2% last year but declined by 0.7% in Kingsport-Bristol.
  • The arts, entertainment, recreation, accommodation and food service economy in the Johnson City metro area was up 2.3% last year and unchanged in from the 2016 level in Kingsport-Bristol.
  • Johnson City’s overall trade economy was up 5.4% last year and 1.6% in Kingsport-Bristol.
  • Johnson City’s transportation and utilities economy real GDP grew by 10.3% and 8.2% in Kingsport-Bristol.

Per capita real GDPAnother critical metric for getting some context on what the local economies are doing is productivity. This is especially true in the Kingsport-Bristol MSA which has an older population than the Johnson City MSA and its economy of yesteryear was more manufacturing centric. That rapidly aging population and the decline of old manufacturing was a one-two punch to the economy that continues today.

Manufacturing began declining in Kingsport-Bristol in the early 90s. It was and continues to be driven by technology.  Back of the envelope calculations show there are 15 people a day turning 65 in the region every day this year and next year. After that, the rate will increase until the demographic peak of Baby Boomers musters out of the full-time labor force. Simply put an aging population means productivity declines unless it is replaced by a technology that balances the worker decline.

Productivity in the Kingsport-Bristol MSA – as measured by year-over-year change in the per capita real GDP – began improving in 2014 after a steep decline that began in 2011. It went flat in 2016 but began increasing again in 2017 to fuel that MSA’s 0.8% growth.

Productivity in both of the region’s MSAs remains below their previous highs. In the Johnson City MSA that came in 2008 when it was $31,392 compared to $30,149 last year. In Kingsport-Bristol it was $36,948 in 2012 compared to $32,940.

 

 

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