By DON FENLEY 

Want a quick comparison of how the Tri-Cities regional single-family rental sales market is doing compared to the sales in the overall market?

• The overall market sales were down 13% from last year.
• Single-family investment property sales were up 16%, according to ATTOM.
• Single-family rentals accounted for a third of all properties in the zip codes analyzed by ATTOM, up from 28% last year.

ATTOM’s Second Quarter Zombie Foreclosure Report, which also lists the number of single-family investment properties and vacancy rates for 40 Tri-Cities area zip codes, shows 66,111 single family investment properties compered to 57,045 this time last year.

That’s consistent with the softening of the local for sales market due to higher interest rates, a tight inventory, the gap in local wage growth rate compared to home prices and a growing trend by consumer’s preference for renting. Bottom-line: Some renters would prefer ownership but can’t break into the market for one reason or another.

There were no local zombies in the current report. A zombie is a foreclosure property that has been abandoned. The report identified 93 pre-foreclosure properties, down from 100 last year.

Markets with the most pre-fourscore properties are:

• Greeneville (37734) – 8.
• Elizabethton (37643) – 8.
• Bristol (37620) – 8.
• Kingsport (37660) – 9.

This year’s regional single-family rental vacancy rate is 2%, unchanged from last year. That does not include data for multifamily properties.

Vacancy rates range widely by zip code. This year’s highest is 8.5% in Kingsport’s 37665 zip to 0% in others.

Zip codes with softening vacancy rates this year include:

• Chuckey – 37641.
• Greeneville – 37443.
• Greeneville – 37745.
• Johnson City – 37601.
• Kingsport – 37660.

A higher vacancy doesn’t mean a decline in the rental market. Other factors are involved. For instance, in Kingsport’s 37660 area increase to a 3.9% vacancy rate while the number of investment properties increased 3%. It’s also the most active townhome build to rent market where some consumers and gravitating to other markets on the misconception that most Kingsport townhomes are investment properties.

A safe overall conclusion is the rental market is hotter than the rest of the market.

Single-family investment returns are expected to increase for the rest of the year. Nation-wide the average annual gross yield for a three-bedroom home is estimated top be 7.6%, up 7.4% from last year, according to ATTOM.

“The U.S. home-sales cooled off a good bit last year, with some of the weakest gains over the past decade,” Rob Barber, CEO at ATTOM, said in a news release. “But that wasn’t enough to make home prices affordable for most workers, which likely fed enough demand to push up rents and yields for investors who lease out single-family properties.”

That’s an accurate picture for the Tri-Cities area market where the number of renters has and continues top increase, and renters are spending a higher percentage of income on housing than most owners.

ATTOM, a leading curator of land, property, and real estate data, analyzed county tax assessor data for 102.3 million residential properties for vacancy, broken down by foreclosure status and owner-occupancy status in the second quarter of 2024. Only metropolitan statistical areas with at least 100,000 residential properties, and counties with at least 50,000 residential properties were included in the analysis.

Categories: REAL ESTATE