By DON FENLEY
Higher mortgage rates, lack of inventory, and inflation continue driving a whipsawed performance for existing home sales in the Tri-Cities region. September’s annualized sales declined 1.7 percent from those during the 12-months ending in August, according to the TCI Group’s Appalachian Highland Home Sales Tracker.
Add seasonality to those dynamics and the stage is set for a lackluster fourth quarter. What isn’t lackluster is the region’s appeal to new residents and investor interest in business opportunities from the migration surge to the East Tennessee. It’s an area where residential and commercial real estate interests converge.
One person who sees that and interprets it on a granular level is Ramon Sanchez-Vinas. He’s the principal at ValueSource Business Advisors and a vice-president of Business Marketing and Sales at the TCI Group.
Currently, tourism is a top business categories seeing increasing interest.
The 2022 Economic Impact of Travel on Tennessee reported all eight Northeast Tennessee had an $841 million impact from visitor spending. That’s $68 million more than the previous year. According to the report, Carter, Greene, Hancock, Hawkins, Johnson, Sullivan, Unicoi, and Washington counties saw significant increases in visitor spending, wages paid to employees and employment.
Statewide, Tennessee had $29 billion in visitor spending and 141 visitors.
Sanchez knows firsthand the attraction. Anytime he puts the tag eco-tourism on a listing, the responses increase. “I get a lot of inquires from people out west who want to move here.”
Tourism in some ways is an easy get for the Tri-Cities region. Despite the attention and taxpayer wealth spend on economic development, the odds of attracting major industrial firms are a challenge. The region has a workforce issue that turns off some potential clients and many potentials shop tax incentives just as hard as they do as location.
On the other hand, tourism can be more accommodating to businesses that actually grow the economy. And it has a lower impact on the environment. For example, “Rafting doesn’t change the river, the more it’s used, the more people it brings to the area,” Sanchez said.
There’s also anecdotal evidence that one of the better ways to attract new residents is giving them the opportunity to visit the area. Once exposed to the region, they can and do develop their own plans for a second or primary home. Locals tend to fixate on why new residents move to which town, but in many cases those residents don’t care if they move the Bristol, Greeneville, Johnson City or Kingsport. The relocate for what the region has to offer not specific attractions of a city or town.
The existing home market continued struggling with affordability and lack of inventory during the 12 months ending in mid-September. Inventory is slowly increasing; however, each time it increases, so do sales, so the small gains are subdued. An area that is growing in both popularity and sales is the new home sector. According to the Northeast Tennessee Association of Realtors Home Sales Report, almost one-half of the new homes listed were at the same price range and much of the existing new home move-up market. That dynamic, and the number of local with mortgages at or below 3 percent, have put builders in the driver’s seat. It’s a situation that should continue well into 2024.