High-end real estate continued sizzling in the Tri-Cities during 2020. And it looks like the growth spurt for living large will continue in 2021.
Of course, living large is subject to expectations. One that has been a staple for new home permits for years is a permit with a valuation of $400,000 or more or 4,000 square feet or more, as reported by The Market Edge. And remember, the value on a building permit is not the home’s market price. There’s some add on for that number, but that’s another story.
At the end of the third quarter, high-end permits were up 23.6% from the first nine months of last year. That was the largest Q3 growth rate for the larger region.
The Chattanooga area was up 5.5%. Knoxville was up 1%, and Asheville was down 5.3%.
There are varied reasons for why the Tri-Cities is doing so much better than its neighbors, who have had better growth and more vibrant economies. One advantage is the lower local costs. This is one case where lagging the faster-growing markets with better economic growth was an advantage.
Another benchmark is the sales of existing properties. If you use the $400,000 and up benchmark used for new homes, resales during the 12-months ending in mid-December were up 55% from last year. And last year was a booming year.
Most of those resales were in the $400,000 to $600,000 price range, and here’s where expectations enter the picture.
There are two primary dynamics at play here:
- The Tri-Cities is experiencing an uptick in new residents from other areas. And for someone who just sold their home in an area with much higher home prices, what they can buy for $400,000 in this market is a bargain. That’s driving sales and prices higher.
- The region is also seeing an increase in preparation for and speculation of a significantly higher tourism economy. The listing information for the local property found during a quick search on the Northeast Tennessee Association of Realtors Website is an example. The listing price of $4.2 million may sound high to some but check out the property description. A manor house, retreat/guest quarters, a lodge, barns, etc.
There are also rumblings of owners of land with land and/or mountain vistas (or both) who are considering putting 10 to 20 acres parcels on the market for individuals who can afford to live large in a rustic setting. But that too is another story.
Given current conditions, a local living large benchmark should probably be moved up to homes in the $600,000 and up range. There were 108 of them sold during the last year, and Johnson City and Bristol TN-VA lead the local city areas in those sales.
And then there’s the top of the pyramid – $800,000 and up. Only 36 were sold this year compared to 27 last year. Johnson City and Bristol led local city areas in those sales.
Here’s how those Q3 high-end new home permits looked by county compared to last year, as reported by The Market Edge.
Carter – 7, up 4
Greene – 8 down 2
Hawkins – 0
Sullivan, 23, unchanged
Washington Co. Tenn. – 40, up 11
Scott – 0
Washington Co. Va. 11, up 5
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Categories: REAL ESTATE