KINGSPORT, Tenn. (WJHL) — With the likes of national builders D.R. Horton building homes as quickly as they can, the Kingsport housing market is blowing past home starts and construction values of previous years.

“In Kingsport, the national builders have provided entry level housing options at a rate that has met the demand presented in our market,” City Manager Chris McCartt told News Channel 11.

“At the same time we are seeing local home builders invest in infill developments and in remodeling/repurposing space in our downtown for lofts.”

Data from the city show single-family residential construction numbers for the first seven months of 2022 running at roughly double the levels of 2021, which was itself a strong year. The January through July 2022 value for new single-family, $45.7 million, was quadruple the amounts through the same period of 2019 and 2020.

Kingsport’s housing market has seen rapid growth in 2022, with more than 200 single-family housing permits pulled in just the first seven months of the year. (WJHL photo)

The numbers suggest continued strength for a while, area consultant Don Fenley said. Fenley, who provides communications and data analysis for the Northeast Tennessee Association of Realtors, said D.R. Horton has become the area’s dominant builder in the space of just a couple of years.

“Their economists begin looking nationwide in a way to expand their markets and they saw big demand that was not being met here,” Fenley said.

McCartt agreed. He said the reasons for more than 2,000 relocations to Kingsport since March 2020 vary and include work relocation, retirement, working remotely and just the “great reshuffling” that’s seen people leave big cities for smaller ones.

“When you factor in this data with the reality that many of our large employers have experienced a number of retirements over the last two years, and those retirees have elected to remain in our market, you can begin to see why demand has outweighed supply,” McCartt said.

Fenley said there’s been talk about other national builders entering the market here, but added that so far that hasn’t materialized.

“They see a need for about another 3,000-5,000 homes in the Tri-Cities during the next three to five years and its their goal to dominate that market.”

Fenley said two locally grown builders, Orth and Patterson, have both increased production of units as well.

For Kingsport, the property tax revenue from those 209 new homes permitted from Jan. 1-July 31 could be around a quarter million dollars annually, if not more once they are assessed for tax purposes.

National builder D.R. Horton is building dozens of houses in Kingsport since moving into the market in the past year or so. (WJHL photo)

McCartt said those revenues will be needed for infrastructure to keep pace with population gains. He said the city’s water and wastewater capacity is good, but the city’s leadership closely monitors school and transportation capacity to make sure it doesn’t fall behind.

“If you see an increase in residential development you will see an increase in not only property taxes but sales tax as well,” McCartt said. “The challenge for any city is to make sure the revenue generated can cover the cost to provide services and that proactive steps are being taken through the budget process and short and long range capital project planning.”

Fenley said three counties in the region are equal to or above the state growth rate over the past 18 months, while Sullivan County grew as much from 2020 to 2021 (by more than 1,100) than it did the entire previous decade. That contrasts with the 2010-2020 period when several Northeast Tennessee counties lost population and only Washington County showed moderate growth.

“We have recovered from that lost decade, but regionwide our growth rate is still about 4/10 to 1/2 of a percent,” Fenley said. 5% to 10% in a decade is a good slow growth rate.”

McCartt said commercial developers follow residential growth and he expects more new commercial growth in the Model City soon.

“The strong growth numbers in Kingsport over the last few years have caught the attention of many national site selectors,” he said.