Despite a stubborn labor shortage and whiplash from the pandemic, the region’s economy is clearly on the mend. The unemployment rate is at a 30-month low, but jobs creation continues to disappoint. Unemployment claims are down, but the number of open jobs continues to hoover in the 10,000 range. The most current Bureau of Labor Statistics (BLS) reports show the region has 5,200 fewer jobs than before the pandemic. New job creation has been negative or stagnant for seven of 11 months.

Private sector pay is one of the bright spots as businesses compete for workers. Kingsport-Bristol’s average weekly private sector is up 7.5% from the previous quarter. It increased 6.7% in the Johnson City metro area. Annualized the weekly average is up 4.7% in the Johnson City metro area and 2.7% in Kingsport-Bristol. Wages in the three government sectors are also up.

“During the first 11 months of this year, the market has recorded 512 commercial transactions – 191 more than last year,” according to the Northeast Tennessee Association of Realtors (NETAR) monthly report. “Since late summer, the retail sectors – both commercial retail and shopping center – have seen leases and sales gain momentum. They haven’t outperformed the office sector but grouped they account for 41% of all transactions so far this year, ” according to Cassie Petzoldt, NETAR Commercial Committee chair.

During the first nine months of this year, the region’s $40.1 million in state sales tax collections are up 8.6% from last year. Collections in the Johnson City metro area were up 10.4%, while those in the Kingsport-Bristol metro area increased 7%. The collections are state sales tax only. September data is the most current from the MTSU – state Advisory Commission on Intergovernmental Relations website.

Office transactions have been steady all year. That is opposite to what’s happening in the major metro market. So far, there have been 87 office sales and leases from NETAR’s Commercial Market Listing Service (CMLS). The second local commercial database does not segment commercial listings or transactions.

A Cushman and Wakefield report suggests most companies will employ a hybrid office model and the full impact on the future demand for office space is still a question mark. A third-quarter Crexi market analysis says secondary and suburban centers have driven a significant amount of office leasing.

There were 44 office listings in the three-county Johnson City Metropolitan Statistical Area (MSA) at the end of November and 40 in the four-county Kingsport Bristol MSA. The Kingsport-Bristol inventory has averaged 53 listings a month, while Johnson City has averaged 43.

The retail-commercial sector has posted 81 CMLS transactions so far this year. They are evenly divided between the Kingsport-Bristol and Johnson City metro areas.

The CMLS inventory in the industrial sector has dropped from a monthly average of 21 listings to 16. Demand – there have been 49 transactions this year – has depleted much of the inventory, and there has not been much new product added in the past several years even though there is a lot of warehouse demand among companies competing for the growing “last-mile” capacity.

Vacant land sales have also remained constant so far this year. So far this year, that sector has accounted for 40 transactions from both local commercial databases. The monthly average listings volume of 163 was down to 147 in November.

Last month, there were 48 new commercial listings, down two from last year and 25 fewer than October.

Last month’s active inventory was 766 listings, down 7.2% from last year.

NETAR is the largest trade association in the Northeast Tennessee, Southwest Virginia area representing over 1,500 members and 100 affiliates involved in all aspects of the residential and commercial real estate industries. 

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Categories: REAL ESTATE