ValCap new apartment complex on University Blvd. in Kingsport

By DON FENLEY

The Tri-Cities multifamily market posted a mixed fourth quarter in 2025, with rent growth decelerating sharply and vacancy rates rising in both metro areas tracked by the National Association of Realtors® (NAR). Even so, the region’s fundamentals continued to compare favorably to national benchmarks.

The Q4 2025 data presents a market in transition. At the metro level, rent growth has decelerated materially in both Johnson City and Kingsport-Bristol, and vacancy is climbing as new supply has entered the market faster than demand has absorbed it. Both metros are absorbing multifamily space more slowly than the national average. However, both continue to outperform the nation on rent growth and vacancy rates. It’s a reminder that the Tri-Cities market operates from a position of relative strength even in a softening cycle.

At the property level, the ATTOM data is more encouraging. Vacant investment properties declined 27.9% in raw count and fell from 0.90% to 0.65% as a share of total residential housing stock. The geographic reach of vacancy also shrank, from 20 to 15 ZIP codes. The stress that remains is concentrated in specific urban corridors, particularly in the two Bristols and central Kingsport.

Cap rates holding in the 7.1%–7.4% range suggest investors have not yet repriced the market significantly. Whether that stability persists into 2026 will depend on how quickly new Johnson City supply is absorbed and whether Kingsport-Bristol rents recover from their Q4 plateau.

According to the NAR Research Department, demand for multifamily space in both the Johnson City and Kingsport-Bristol metro areas was weaker than the national average in Q4, reflecting a slower pace of multifamily space absorption compared with the broader U.S. market. Despite that weaker demand environment, rent prices in both metros rose faster than the national rate, and vacancy rates remained lower than the national average.

In the Johnson City metro, asking rent growth dropped from 5.9% a year earlier to 2.7%. Asking rents edged up to $1,173 from $1,143, while effective rents rose to $1,161 from $1,135. Vacancy jumped from 3.5% to 6.6% as the market absorbed new supply across a market that grew to 8,564 units. Cap rates held largely steady at 7.4%, down a tick from 7.6%.

The Kingsport-Bristol metro told a harder story. Rent growth fell to just 0.7% from 2.8%, and asking rents slipped from $1,130 to $1,113. That flattened effective rents at $1,113 for both periods. Vacancy climbed from 5.0% to 6.2%, and cap rates held flat at 7.1%. With only 15 new units added to reach 6,195, the Kingsport-Bristol market is showing signs of saturation at current rent levels.

Taken together, both metros saw vacancy climb and rent momentum fade in Q4. The broader national narrative of oversupply and moderating rents is present locally. But the region’s relative performance on vacancy and rent growth suggests the Tri-Cities

Source: National Association of Realtors, Q4 2024 and Q4 2025.

INVESTMENT PROPERTY VACANCIES: ATTOM DATA SOLUTIONS

ATTOM property data across 40 Tri-Cities ZIP codes shows a meaningful decline in overall vacancy on a comparable basis. Measured as a share of the region’s 203,325 total residential properties, Q4 2025 vacant investment properties represented 0.65% of the housing stock, down from an overall vacant property rate of 0.90% in Q4 2024.

The region had 1,319 vacant investment properties with enough data to be included in Q4 v. 1,830 total vacant properties a year earlier. Averaged across all 40 ZIP codes, showed 33.0 vacant properties per zone at an average rate of 0.41%, compared with 45.8 vacancies per zone at an average rate of 0.56% in Q4 2024.

The geographic footprint of vacancy also contracted. Fifteen ZIP codes reported at least one vacant investment property in Q4 2025, down from 20 zones in Q4 2024. That consolidation suggests improvement was not evenly spread.

Both periods measured as share of total residential properties (203,325). Q4 2025 tracks vacant investment properties; Q4 2024 tracks total vacant properties as reported by ATTOM. Source: ATTOM Data Solutions.

VACANCY CONCENTRATION: WHERE PRESSURE IS HIGHEST

Despite region-wide improvement, six ZIP codes accounted for the bulk of remaining vacant investment properties in Q4 2025. Bristol, VA (ZIP 24201) led the region with 247 vacant investment properties – 3.63% of its 6,800 total residential units. That was down from an overall vacant rate of 4.53% in Q4 2024 but still the region’s highest-stress zone by a wide margin.

The 37665 Kingsport zone posted the second-highest share at 2.63% of total residential. It had 56 vacancies against 74 a year earlier. Greeneville’s 37745 ZIP showed 109 vacant investment properties at 1.60% of its residential base, compared with 1.88% in Q4 2024. Bristol, TN (37620) recorded 210 vacancies, 1.48% of its 14,189-unit residential base, down from 2.10%. Central Kingsport (37660) logged 146 vacancies at 1.04% v. 1.65% prior year, and Johnson City’s 37601 zone posted 111 vacancies at 0.99% against 1.47% a year earlier.

In every high-concentration zone, Q4 2025 vacancy as a share of total residential improved compared with Q4 2024. The pattern points to urban cores and older residential corridors as the focal points of remaining stress.

This report is a combination of human and AI research and analysis.

Categories: REAL ESTATE