Existing home sales continued their snail’s pace retreat in July, with one exception. At the same time, the inventory of homes for sales is increasing at an equally slow pace.
Greeneville is the slowing sales exception. Its 12-month growth rate increased for the second straight month in July, but it too is showing signs of softening. It slipped from a 1.1% increase in June to 0.6% last month. At the same time, the other area markets inched in the opposite direction. The rates of decline slowed from the previous month.
Since those insights are based on data for the 12 months ending in each month, it offers a more stable trend insight. And just because sales are slowing, it doesn’t mean a declining market. Sales are 8.3% higher than they were in January. So, we’re still looking at a housing market that hasn’t cooled enough to be downgraded.
How long that continues is increasingly dependent on the regions’ population churn and the rest of the economy. There’s a population churn because the death and out-migration outnumber births. That means the region’s growth depends on attracting new residents. The region must attract about 34 new residents daily to maintain its 2020 population.
The upside is the churn is creating some positive increases in local demographic dynamics. For example, the number of households in the top four Census median household income ranges increased in the current count. And since that count is for 2020, it only includes the first half year of the pandemic exodus. Here’s how the local median household income increases looked:
$75,000 to $99,999 – up 5.2%
$100,000 to 149,999 – up 5.9%
$150,000 to $199,999 – up 12.1%
$200,000 or more – up 3.7%
That aligns with home price increases that have moved the region’s typical existing home sales price to the $250,000 price range. A couple of years back, the $200,000 and below market was dominant with a market share of 70% to 73% of sales. For the 12 months ending in mid-July, it had declined to 54%.
JERRY PETZOLDT
The increase has also been noted in the local commercial real estate market. Transactions are almost 14% better than last year’s first half, and the surge of interest and activity from investors and developers from outside the region has not let up. “We’ve never had that type of attention before,” according to Jerry Petzoldt, TCI Group CEO and president.
Ramon Sanchez-Vinas, a certified business broker and commercial real estate broker, is seeing it with his Value Source Business Advisors clients. He and TCI recently announced an affiliation. Sanchez-Vinas’ Johnson City local will continue while the new relationship with TCI will expand that firm’s growing range of services.
Some of the increase Sanchez-Vinas notes is from local business owners looking to exit for retirement or other reasons. But the hot ticket is his listings for local tourism industry business – especially if it’s an eco-tourism business. “Anytime I use the tag ‘eco-tourism,’ I get a lot of inquiries from people out West who want to move here,” he said. An example is his $1.1 million listing for a 76-acre multi-activity adventure park in Elizabethton.
RAMON SANCHEZ-VINAS
Sanchez-Vinas, a Carter Co. resident, has a special interest in the tourism segment since it’s a leading economic development focus in his home county. He says the region’s tourism and eco-tourism potential is a winning ticket because it can land major industries that don’t require extensive workforce or infrastructure changes. “For example, rafting and kayaking don’t change a river, but it brings more and more people to the area. And that attracts other support businesses like restaurants and accommodations. The growth potential is substantial because domestic leisure travel has already surpassed inflation-adjusted 2019 figures.
The region’s tourism industry isn’t restricted to Carter Co. There are plans to expand water resources and high-end resorts in Unicoi Co. Kingsport is in the early stages of development at its Riverbend Park on the Holston. The region already has an extensive network of hiking and biking trails that continues expanding. And short-term rentals in local cities, around the lakes and rivers, and in the mountains are also flourishing.
The Bristol Casino and Hard Rock enhancements are expected to magnify the region’s outdoor recreations and tourism appeal.
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