WISE — Increasing housing stock and making it affordable for a regional workforce are issues facing Southwest Virginia and East Tennessee, according to a Federal Reserve Bank official.
Attendees at the 10th annual Southwest Virginia Economic Forum on Friday got that news in the form of a few income and housing cost charts by Federal Reserve Bank of Richmond Community Development and Regional Manager Jarrod Elwell.
Elwell, featured speaker at the forum’s Regional Housing Symposium, told the audience that the region’s housing market is looking at imbalances between available housing, prices, homeowner age demographics and the share of income to afford a house.
The Federal Reserve Bank is mandated by Congress to achieve maximum employment, price stability and moderate long-term interest rates by influencing interest rates, Elwell said. That balancing includes working toward a stable growth in the housing market.
Demographics in the Kingsport-Bristol Metropolitan statistical Area Elwell said, the average age of a home buyer in the region has climbed from the early 20s to 53 today, he added.
When income of home buyers is considered, Elwell said, the largest income demographic of buyers is in the $50,000-$100,000 range.
Federal Housing and Urban Development guidelines for housing affordability recommend housing expenditure not exceed 30% of income. Since 2022, Elwell said, the region’s typical housing cost share of income has risen from 46% in 2022 to 48% in 2024.
Looking at regional trends in median housing costs, construction cost and household income, Elwell said income has not kept pace with housing prices. Median income has risen by approximately 50%, to $60,000 since 2010, he said, while median housing sales prices have more than doubled to the $240,000 range. Construction costs have also seen a doubling in the same 15-year period.
“We have not seen a strong buyer’s market in about seven years,” Elwell said of housing trends. “That means a strong sellers’ market and also a need for more housing.”
A panel discussion featuring Mount Rogers Planning District Executive Director Aaron Sizemore, Landstar Development workforce housing director Justin Gonzalez and UVA Wise enrollment Vice Chancellor Jeff Baylor pointed to more direct factors making home buying more expensive and supply tight.
Baylor said he started looking for a house when recruited to work at the college. He found a large number of buyers for available homes, which meant bids drove up prices. The homes Baylor looked at also tended to be larger and older than he planned to buy.
Sizemore said a general American trend in home construction leans toward larger square footage – 1,200 square feet or more on larger lots sizes. He said zoning in the U.S. has shifted from protection from certain land uses to protection of a preference for larger homes and lots.
“It’s realizing what the people want versus what you’ve always wanted,” Sizemore said of shifting zoning priorities to allow more homes on the same land areas.
Gonzales said developing partnerships between developers, builders and municipalities could help streamline the process of building more affordable homes.