One advantage of looking at 12 months of home sales data ending every month is a better trend picture. Here are a couple of examples from June’s analysis:
Months of inventory as of mid-June 2022 Click on chart for a larger image.
Greeneville is the only Tri-Cities regional housing market with an increasing average sales trend. Greeneville has also gained market share in more price ranges than any other market this year.
At the same time, while Johnson City continues to dominate its share of all regional existing-home sales, its sovereignty is beginning to ebb – especially in the lower price ranges. And it hasn’t displaced the fact that Johnson City continues to account for more than half of all sales in every price range of $400,000 and up.
Housing is getting increased attention because there’s still a lot of supply and demand clamor. It’s also a focus for efforts to put the lid on inflation. There’s an up and a downside to that. While dampening the housing price increases will help curb inflation, it will blunt the labor market’s recovery and subtract some of real estate’s contribution to the local economy.
Population and demographics are as critical as inventory, sales, prices, rents, and all the other real estate topics used to explain where the housing market may be headed.
So far, most attention has been focused on the number of new residents. Their numbers accelerated during the pandemic when Tennessee and the Tri-Cities stepped onto the forefront of the relocation tsunami. At one point, U-Haul cited the Tri-Cities as one of the top growth destinations in the nation for its trailers and vans. The Wall Street Journal and Realtor.com’s Emerging Markets Index also consistently ranked the region’s two metro areas among the top emerging markets in the nation. That index was based on the housing data and local economic conditions. The bottom line was both the Johnson City and Kingsport-Bristol metro areas were labeled two of the better places in the nation to invest in housing and a good place to live.
“Sustaining the population growth is a key factor for real estate and the region’s economy,” according to Jerry Petzoldt, CEO, owner, and principal broker for the TCI Group. Petzoldt was one of the early adopters and advocates for accelerated efforts to attract new residents over two decades ago. His motive was simple. “Since the region’s population is not naturally growing, it’s critical to attract new residents to grow the region’s economy.” State and local relocation efforts have grown, but they’re facing new competition from other areas that have caught the attention of those looking to relocate.
It begs the question. Will it the number of tomorrow’s new residents be enough to cope with post-pandemic realities?
The region is still seeing its best population gains in over a decade. And most local market watchers expect that to continue, for now. Shane Abraham, founder of Universal Development and Construction, told a WJHL reporter he’s still seeing momentum. “I can’t say for sure you’re going to see the same kind of (growth) in 2022 as you saw in 2021, but I still think it will be a big year.”
During the pandemic, the local death rate spiked, and the birth rate plummeted. There are early signs that the birth rate is picking up and the death rate is coming down. Still, both are at pre-pandemic levels – there are many more deaths than births. So, the region is dependent on new residents for population growth. It currently must attract over 30 new residents a day to maintain its 2020 population status quo. Others predict the number of new residents will continue, just not at the same level. That usually comes with a caveat to ease rumors of home price reductions.
Every local jurisdiction and business group needs better information about the changes that have and continue. There’s anecdotal evidence. But the plural of anecdote is not data, and there’s much more we don’t know about new residents than what we know until Census offers some insights. That’s at least a year away, which is painfully far away in an era when so many business and economic decisions are data-driven. It’s a good priority – with real-time implications – for a regional solution.
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