Foreclosure deep dive will be shallow; some local landlords can still hang out the ‘no vacancy’ sign


TRI-CITIES, Tenn. – Eavesdropping on housing market conversations is a reality of the business for anyone who toils in the real estate vineyards. You can glean a lot from it. And more often than not, there’s a flood of misinformed.

For instance, this week I had to grit my teeth listening to one guy who was going to take a deep dive in the foreclosure market and save a bundle. It’s going to be a shallow dive.

There will always be a foreclosure market. But these days it’s on rock bottom. There are a about 250,000 residential properties in the Tri-Cities and 29 of them have a pre-foreclosure status. Add them to the 37 filings in July and you have pretty good picture of the region’s foreclosure status.

Foreclosures and delinquent mortgages are increasing. But homeowners have gained so much equity that it’s going to be quite a while before there’s a robust local foreclosure market.

The information on pre-foreclosures is part of a ATTOM Data Solution’s third quarter housing analysis that also has data on housing and rental vacancies.

Region wide, there’s 1,924 (0.9%) vacant residential properties, according to ATTOM. During the 2021 Census count, the vacancy rate was estimated at 12.8% (31,570 properties). It’s a pretty good snapshot of market conditions.

ATTOM’S report also put the count of local single-family rentals at 58,893. Of that total 1,403 (2.4%) are vacant. By all standards, that means landlords can hang out the no vacancy sign. But there are vacancies. “There is evidence that the ultra-tight inventory environment in some red-hot markets is beginning to ease just a bit” according the ATTOM Senior Vice President Daren Bloomquist.

He wasn’t talking about the Tri-Cities. Still, a local drill-down by zip code shows a 12.2% (89 properties) vacancy rate in Kingsport’s 37665 area. That area has lived with the issue in several reports.

There are some signs of things loosening in some parts of the region’s multi-family market. The latest count from the Tri-Cities Apartment Association list the vacancy rate of its members at 98%. Again, that’s full occupancy, so investors and developers are pushing to increase the stock.

Data from the National Association of Realtors (NAR) Research Department are a little different. The current NAR commercial market insights for the region’s multi-family market, which includes all multi-family properties, so it sweeps in the smaller apartment, duplex, etc. offer a different perspective. The difference is vacancy rates are declining.

Combined with the larger apartment communities that number rounds out the local multi-family inventory at a little over 13,000 units.

According to NAR, The Johnson City metro region’s vacancy rate is 3.8% down from 1.8% last year.

The rate in the Kingsport-Bristol metro area is 6.1%, down from 2.6% last year.

NAR’s outlook for the multi-family sector is it will remain strong when compared to other commercial real estate sectors thanks to “favorable demographics, a strong job market and lower housing affordability due to higher mortgage rates.”

Categories: REAL ESTATE