Half of Tri-Cities single-family rentals have vacancy rates higher than U.S. average

Vacancy rates for half of the Tri-Cities area investor-owned, single-family homes are above the national average. That seems out of sync in a housing market with a record-low inventory of homes for sale and rapidly increasing home prices that are boosting the rental market.

And a separate analysis found the Sullivan and Washington counties’ single-family rental markets were Tennessee’s most vulnerable if a tepid economic recovery extends to the housing markets. Mom-and-pop investors account for about 85% of single-family rentals, and some a highly leveraged.

There were 5,587 vacant investor-owned properties in the Tri-Cities area during the first three months of this year. That’s 5.1% of the total investor properties in the region, according to ATTOM Data Solution’s Q1 Vacant Property and Zombie Foreclosure Report. The median local vacancy rate was 4.4%. The U.S. rate was 3.7%, and it was 5.2% in Tennessee and 2% in Virginia. There were 110,386 investor-owned single-family rentals during Q1, according to the report. That’s 42% of the region’s total housing inventory.

The overall vacancy rate for the region’s 491,708 properties is 2.6%. The U.S. rate is 1.5%. The Tennessee rate is 2.6%, and it’s 0.8% in Virginia.

A 4.4% median vacancy rate for investor-owned rentals in the 34 local zip codes in ATTOM’s report is not as low as it seems since the median is the point where half of the vacancy rates were lower, and half were higher.

The lowest rate was in Piney Flat’s 2,037 rental units. The rate was 1.7%.

Roan Mountain’s 1.9% vacancy rate was the region’s second-lowest. There are 1,663 rentals homes in that zip code.

Kingsport’s 37665 zip code had the region’s higher vacancy rate – 12.5% for 1,231 rental homes. The second highest was in the 24201 zip in Bristol, VA – 11.7% for 2,389 rentals.

Greeneville’s 37743 zip code leads the region for the number of investor-owned, single-family properties – 6,517.

ATTOM’s vacancy analysis is part of the firm’s Vacant Property and Zombie Foreclosure Report. It analyzes publicly recorded real estate data, including foreclosure status, equity, and owner-occupancy rates matched against monthly updated vacancy data for the report.

FORECLOSURES

There were 37 properties with a pre-foreclosure status during Q1. That’s down from 141 during Q1 last year. Mortgage forbearances are the primary reason the number is down. When those government programs expire, lenders will begin collecting what’s owed. It’s also expected that some of those who opted for forbearance will lose their homes or have to refinance. That will happen because unless the mortgage holders negotiated special payback terms for their forbearance, the entire amount for payments they missed will be due at one time.

Analysts don’t think this will create an explosion of foreclosures like the nation saw during the Great Recession. They say there will be an increase, which will be some relief for an inventory-starved market like the Tri-Cities, but nothing like the days when some foreclosures were selling at a 40% discount from the market price.

ZOMBIES

Zombie foreclosures are vacant properties with a pre-foreclosure status.

During the first three months of this year, there were five of them compared to eight during Q1 last year.

“These days, you can walk through most neighborhoods in the United States and not spot a single zombie foreclosure. That continues a remarkable turnaround from the last recession when many communities were dotted by abandoned properties,” said Todd Teta, chief product officer with ATTOM. “The trend does remain on thin ice because foreclosures are temporarily on hold, and the market is still at risk of another wave of zombie properties when the moratorium is lifted, depending on the general state of the broader economy. For the moment, though, zombie properties remain pretty much a non-issue in the vast majority of the country.”

Don Fenley has over 45 years’ experience as a reporter, photographer, and editor. Much of those latter years at the Kingsport Times-News, combined with the past five years of semi-retirement and contributor to the Business Journal of the Tri-Cities, have been devoted to localizing and adding context to the housing and labor markets, economic and demographic trends. The Times-News continues carrying his reports on the Sunday Money Page. He is also a frequent contributor to Business Matters on WETS. Detailed or specific reports are available by contacting him at djfenley@gmail.com.

© 2021 donfenley.com. All rights reserved.



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