By DON FENLEY
TRI-CITIES, Tenn. – Demographics is a significant factor in growing the economy. Early signs show the local population is restructuring with higher household incomes and education levels than before the pandemic. That was driven by a combination of early post-pandemic wage increases to entice workers to a labor-starved market and the surge of new residents from other states. That sets the stage for retail growth in the commercial sector expansion.
Important considerations to tracking and positioning to capitalize on the restructuring begin with who’s looking at the region and what they see? The who is easily tracked for residential growth with Realtor.com‘s cross-market and market hotness analytics. Both the Johnson City and Kingsport-Bristol metro areas were recently ranked in the top 20 U.S. hot markets index. The index is based on the average views per local property listing compared to the U.S. average per listing view and the listing prices of homes compared to the U.S. median. Expect this to expand as the news cycle shifts from hurricane Ian’s destruction to the real-world implications of housing infrastructure and residents’ reactions to the disaster. A natural response will be an increase in Florida residents seeking a safe haven for such events and those who plan to relocate but are having second thoughts about moving to disaster-prone areas. Florida has traditionally been a top donor state to the Tri-Cities’ relocation market. That will likely increase.
Out-of-state residents accounted for 58% of Kingsport-Bristol property listings views and 60% of Johnson City’s views in the most current cross-market analysis. Washington, D.C., Atlanta, and New York are the origin points for that traffic. The commonality is most of those areas are high-tax, congested areas. But when actual relocations are counted, most new residents are from within the state and region despite media attention to the out-of-state relocation market.
Tracking commercial real estate investors are not as easy. There are no commercial cross-market or hotness indexes. Local listings on the Northeast Tennessee Association of Realtors (NETAR) Commercial Multiple Listing Service (CMLS) primarily serve the regional interest. Almost all the traffic comes from Tennessee and Virginia. There’s also interest from Georgia, South Carolina, Florida, North Carolina, and Texas investors. So far this year, most of the international CMLS traffic came from China, then the Netherlands.
TCI Group is one of the firms that has joined the growing CREXI commercial listing network. CREXI is to commercial listings what Realtor.com is to local residential listings. Analytics show that most of the traffic is from within the U.S. The bulk of international views come from the Netherlands, Germany, China, India, France, the U.K., and Canada. TCI Affiliate Broker Ryan Ketron said most of the investors he’s talked to are looking for tax incentives and the low barrier to entry compared to other markets. Where were those investors based? California, New York, or Florida.
“Currently, a combination of factors are working in the Tri-Cities’ favor,” according to TCI CEO and Principal Broker Jerry Petzoldt. “Growing that and taking advantage of the opportunities it presents is a matter of sustaining current levels of new residents with expanded and coordinated regional campaigns and sharpening the local areas with the biggest growth opportunities. Areas like an aviation cluster for the Aero Space Park, tourism, and expansions of services to the region’s most underserved demographic sector – the 65-and-over community.”
NEXT – What do they see?
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