The Tri-Cities new home market delivered a mixed signal in July. Buyers purchased fewer newly built homes than they did a year earlier, but those who entered the market paid more for larger properties.
According to the Northeast Tennessee Association of Realtors® (NETAR), 56 new homes closed during July. That was down 17.6% from 68 sales in July 2025. Meanwhile, the median sale price increased 3.8% to $365,588, and the average rose 3.9% to $403,651.
Falling sales and rising prices may appear contradictory, but they measure different aspects of the market. The sales count reflects activity, while prices depend on the types of homes being purchased. When buyers select larger homes or properties in more expensive locations, prices can rise even as fewer transactions occur.
Both the median and average price increased in July, indicating that the market moved higher overall—not only at the top. The median represents the midpoint, meaning half of the homes sold for more than $365,588 and half sold for less. The higher average of $403,651 reflects the influence of more expensive sales.
Market activity also shifted geographically. Blountville led the region with 13 new home sales, followed by Johnson City with 11, Jonesborough with eight and Kingsport with seven.
That represents a significant change from last year, when Johnson City led with 22 sales—twice its July 2026 total and more than any community recorded this year. Sullivan County, including Blountville and Kingsport, absorbed much of that activity.
Only communities with at least five sales are included in the ranking. Results from smaller markets can be distorted because a single transaction may cause a large monthly swing.
Seller pricing behavior also changed. Twenty-four of July’s 56 new home sales received a price reduction—the same number as last year, but from a smaller pool of transactions. The average reduction from the original asking price increased from $15,523 to $19,012.
However, buyers secured smaller discounts at closing. Thirty-four homes sold below their final asking price, with an average gap of $5,520. In July 2025, 32 of 68 homes closed below list, and the average discount was higher at $7,717.
Together, these numbers suggest sellers initially aimed high, made larger corrections during the listing period and then held closer to their revised prices at closing.
The homes purchased were also larger. The average new home contained 1,989 square feet of finished space, up from 1,930 square feet last year. Buyers paid an average of $207.38 per square foot, compared with $203.12 in July 2025. Paying more per square foot while purchasing more space pushed final prices higher.
Homeowners associations remained common. Thirty-seven of July’s 56 new homes were located in an HOA, with an average fee of $337. Last year, 50 of 68 sales included an HOA, with an average fee of $335.
July looks less like a market slump than a reset. New construction is producing fewer transactions, but the homes selling are larger, more expensive and increasingly concentrated in fewer communities.
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