NETAR has been providing professional real estate services to the region for over 50 years.
NETAR has been providing professional real estate services to the region for over 50 years.
The mid-year growth rate for the local commercial real estate market is up 13.4% from the previous year.
While June’s transactions were lower than May’s total, the market is still showing a 50% improvement of year-over-year and six-month trend gains.
“Despite the potential for continued interest rate hikes, commercial real estate in the region monitored by the Northeast Tennessee Association of Realtors (NETAR) remains positive heading into the last half of the year,” NETAR President Rick Chantry said in a press release. “There were only two year-to-date commercial sectors with lower completed deals than last year, and one — industrial — is more a lack-of-inventory situation than dwindling demand. Shopping center deals were the other down sector, and it was only by one transaction.”
The continued improvement of the local labor market is part of the reason for growth. June’s labor market data was unavailable at the time of NETAR’s report, but May was the region’s best month for job creation so far this year despite a continued labor shortage.
“The strong labor market has helped power consumer spending,” Chantry said. “At the same time, slowing economic conditions will likely start weighing more on some sectors during the last half of the year.”
These sectors will likely be lower-paying fields such as health care services, accommodations, food services and retail as the labor shortage has prevented growth in these areas, according to NETAR. This issue saw employers add an average of 42 jobs a month for the first five months of this year.
Office transactions were another reason behind commercial real estate market growth as they made up almost half of the first half of the year-to-date sales and leases. Multi-family properties also made a six-month solid contribution due to limited inventory of homes for sale and higher mortgage rates helping fuel an increase in rental activity.
Overall, commercial inventory is down 20.3% from last year, and new listings are down by 2.9%.
The multi-family sector is the only one with fewer listings at the mid-year point compared to last year, and the listing sectors with the most absorption include vacant land, retail-commercial and office.
For more information on the real estate market in Northeast Tennessee, visit https://netar.us.
NETAR compared CMLS transactions for the first half of this year to last year in their press release. Here’s the breakdown:
Office – 55, up 11
Retail-commercial – 46, up 4
Vacant land – 25, up 1
Industrial – 22, down 2
Shopping center – 16, down 1
Multi-family 11, up 9
Combined CMLS and Flex total – 288, up 34.
Sarah Owens is a recent graduate of Milligan University and a native of Alabaster, Ala.. She earned a bachelors degree in communications. She has a passion for traveling and animals and an interest in international cultures.
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