New home sales got off to a robust start in January. The average Tri-Cities area home sold was a tad bit larger than it was this time last year while the price was up a little over 9% ($30,082).

There were 66 sales last month, up from 38 last year.

The median sales price was $355,082, up from $325,000.

One way builders made their product more affordable last year was they reduced the size of their products. That’s still evident since the average total finished sq. ft. last month was 1,803, up from 1,776 sq. ft. last year.

Like last year, Jonesborough was the new home hot spot. Last month, there were 15 sales in Jonesborough. Johnson City was a close runner-up with 10 sales.

The outlook for new home sales this year suggests a modest improvement. More inventory and stabilized mortgage rates are expected to tweak buyer demand and contribute to the positive trend.

New home construction is notably higher than it was last year and barring a hit from tariffs and supply chain issues are expected to continue at a brisker pace.

 John Rose, executive director of the Bridge – formally The Hub – told the Republicans of Kingsport last week that he had just gotten off the phone from a half hour conversation with a builder interested in doing a 300-home development in the area. He said it was one of many builders that have requested information from The Bridge about the local economy and housing market. Rose and other officials say there’s currently 1,000 homes in the works for the region.

The increase in home prices that have burdened the new home industry in recent years is projected to slow this year. The National Association of Realtors (NAR) forecasts a modest 2% rise.

The local new home industry – like the national market – is expected to see a more favorable environed for new home sales in 2025, but the improvements are likely to be gradual. One change is builders have moved some of their focus to the Bristol TN and VA and Washington Co. VA markets.

Stabilized mortgage rates, increased housing inventory and a modest home price increase contribute to the market’s cautiously optimistic outlook.