KINGSPORT, Tenn. (WJHL) – Increasing home prices might be a pain for house hunters, but in the Tri-Cities, it’s a sign of a healthy housing market.
A new study by Middle Tennessee State University found home prices in Kingsport and Bristol are up almost 10 percent from 2018. That’s the largest home price increase rate in all of Tennessee.
But why is the Kingsport-Bristol real estate market doing so well? Experts say it comes down to supply and demand, cost of living, and affordability.
“We’re one of the best kept secrets in Tennessee,” said Don Fenley, a data analyst for the Northeast Tennessee Association of Realtors. His numbers tell a story of home sale totals that brought in nearly $2 billion dollars to the local economy last year.
“That accounts for about 15 percent of the entire economy here,” Fenley said. “You know it’s a great story, when your growth rate is slowing, but you’re still setting records.”
Fenley says surrounding areas like Johnson City, Elizabethton, and Erwin also show healthy market growth. But last year the Tennessee Housing Development Agency especially helped the Kingsport-Bristol market boom. A special loan program for the 37660 zip code led to significant growth.
“You could get a $15,000 forgivable loan if you buy a house in that area. That really accelerated growth,” Fenley said.
However, an aging and shrinking population in the Tri-Cities may challenge this growth in the future.
“Until we start seeing population growth, we might start to see some of our markets plateau,” he said.
Higher housing prices also mean less disposable income for buyers and renters.
“Housing and rents are increasing at a faster rate than salaries,” said Fenley. “So it’s beginning to squeeze affordability.”
But Fenley has no doubt – higher home prices mean higher consumer trust when it comes to buying that new home.
“People have confidence, and want to build their wealth through their housing here,” Fenley said.