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Tri-Cities rents are high, so is occupancy rate

Almost one-in-three residential properties in the Tri-Cities are rental properties, and 95.2% are occupied. The same crunch exists in the apartment market. And the inventory of homes for sale is at an all-time low.

Some real estate investors and professionals have never seen it better. But if you’re on the consumer side, things are not all that great.

Attom Data Solutions’ current Vacant Property Report shows 61,298 residential investment properties in 41 zip codes in the Tri-Cities Metropolitan Statistical Area (MSA) plus Greene and Johnson counties. That’s up from the fourth quarter of last year because investors snapped up another 826 properties after the end of the year.

The local investment property occupancy rate is better than Tennessee’s 94.9% rate but lags the national 96.6% rate.

Of course, occupancy rates – or vacancy rates as they are more commonly called – depend on the number of properties, the number of renters, and the all-important location.

The largest number of investment rentals is in Bristol’s 37620 zip code. There are 3,955 of them and 230 are vacant. The occupancy rate is 94.2%.

The largest number of vacancies is in Greeneville’s 37743 zip code, where 301 of the 3,242 investment properties are vacant, giving it a 90.7% occupancy rate. It barely edged out the 295 vacancies in Kingsport’s 37660 zip code.

The analysis reports no vacancies in nine area zip codes that have a total of  7,168 investment properties. Those zip codes are in Roan Mountain, Chuckey, Surgoinsville, Duffield, Gate City, Abingdon, Damascus, Glade Springs, and Meadowview. Bristol’s 24202 zip code almost made the no vacancy list. It had one vacancy and 1,317 investment properties.

The zip code with the fewest number of investment properties is 37645 in Mount Carmel. Seventeen of those properties were listed vacant in Attom’s analysis.

The analysis also found that seven vacant properties in the region are in a pre-foreclosure state. And there were three bank-owned foreclosed properties.

Although the number of mortgaged properties that are underwater has increased, the region’s foreclosure rate is at an all-time low. Much of that is due to the foreclosure forbearance program, which is slowly unwinding, and the last two year’s double-digit equity increases.

“Even with foreclosure activity rising, it doesn’t seem likely that we’ll see a significant increase in the number of zombie properties,” said Rick Sharga, executive vice president of RealtyTrac, an Attom company. “Zombie status is most likely during a long, protracted foreclosure process, but with $23 trillion in homeowner equity, and demand outstripping supply, most distressed borrowers should be able to sell their home at a profit before the process drags on.”

The historical average local tenure rate is about one-half of a percent.

According to CoreLogic, the region’s current foreclosure rate is 0.1%, and the serious delinquency rate is 1.8% in the Johnson City metro area.

Kingsport-Bristol’s foreclosure rate is 0.2%, and the seriously delinquency rate is 2.3%.

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