By DON FENLEY

If you look at the Tri-Cities new home permits through the third quarter of this year, it looks like a slowdown. Permits are down 7.1% from last year. But that headline is misleading

An analysis of permits from 2021 through the 2025 Q3 year-to-date data shows the local new home market hasn’t just slowed down – it has split in two. A deep dive into the Market Edge’s latest report points to a decoupling of the region’s Johnson City and Kingsport urban cores and the developing periphery of Greene and Carter counties and Southwest Virginia.

The Market Edge is a building permit compilation service based in Knoxville. The company compiles data from the 23 Tri-Cities code enforcement offices in the region’s seven counties. Bill Fox, the Boyd Distinguished Professor Emertius at the University of Tennessee, once said the Market Edge was the best permit data resource in East Tennessee.

Based on the 2021 – Q3 2025 permit performance, here’s what the next 12 months look like:

• The region will probably finish 2025 with around 1,750 permits. While lower than in 2024, this confirms that the Tri-Cities has graduated to a higher tier of activity.
• Growth will be decentralized. Expect the ‘percentage growth’ headlines to continue coming from Greene Co. and Virginia. The Core will remain the volume leader, but the explosive growth phase is muted for now.

County-Level Performance

 The Volatile Core: Washington Co., TN

Washington County remains the volume leader, but it is currently in a digestive phase. After an explosive 2024 (where permits hit a record 760), activity has dropped 18.9% in the third quarter of this year.

 The Stabilizer: Sullivan Co. (Kingsport-Bristol)

Sullivan County peaked early (in 2022) and has been gradually tapering ever since. Permits are down 11.3% in the yearly performance through, continuing a three-year slide from the 2022 highs.

 The Star Performer: Greene Co.

Greene County is the exception to the rule, defying the regional slowdown entirely. While permit pulls in the core have slowed, Greene County permits grew by 9.2%. It has become the 2025 ‘entry-level’ engine for the region, offering the flat, developable land necessary for high-volume single-family construction.

The Sleeper Hit: Southwest Virginia

The biggest percentage surprise comes from across the state line. Washington County, VA permit pulls are up 34.7% through the third quarter, and Scott County, VA has jumped 50% (albeit on smaller volume). Development is finally spilling over from NE Tenn.

The Lifestyle Niche: Carter Co.

Carter County continues to quietly outperform, ignoring interest rate volatility. Permits are up 5.8%, continuing a multi-year growth streak. This is probably driven by the ‘amenity migration.’ These permits are largely for lifestyle-driven mountain homes and destinations near Watauga Lake, a sector that remains resilient even when the broader economy wavers.

Of course, there is always an opportunity for future development to change the picture of what the analysis of past permit forecasts looks like. The region’s demographics, influx of new residents and the ongoing wealth transfer from Boomers to their children and grandchildren will be players in future outcomes and trends.

There are currently thousands of new residential units in the pipeline, according to city and county officials. Their effect will become clear when the move to the part of the pipeline when building permits are pulled.

Categories: TRENDS