The Tri-Cities new construction market is showing an interesting mix of higher prices and slower sales.

According to the Northeast Tennessee Association of Realtors® (NETAR), 56 new homes sold across the Tri-Cities in July, down 17.6% from the same month last year. At the same time, prices continued to move higher, with the median price reaching $365,588 — up 3.8% from last year.

That combination tells us something important: buyers are still purchasing new construction, but the pace has slowed while prices continue to rise.

New Home Prices Continue to Climb

The median sales price for a new home in the Tri-Cities reached $365,588 in July. The average sales price was even higher at $403,651, representing a 3.9% increase from a year ago.

For buyers, the median price is often the more useful number because it represents the middle of all sales. In other words, half of the homes sold for more than $365,588 and half sold for less.

While prices have increased, today's new construction buyer is also getting a little more house.

The average new home sold in July contained approximately 1,989 square feet of finished living space, compared with 1,930 square feet a year earlier.

However, buyers are paying slightly more for that space. The average price per square foot increased from $203.12 to $207.38.

So while homes are getting a little larger, the cost of new construction continues to creep upward.

Where Are Buyers Purchasing New Construction?

The slowdown wasn't evenly distributed throughout the region.

Blountville led the Tri-Cities with 13 new-home sales in July, followed by:

• Johnson City: 11 sales
• Jonesborough: 8 sales
• Kingsport: 7 sales

That's a noticeable change from last year.

In July 2025, Johnson City was the clear leader with 22 new-home sales. Greeneville and Jonesborough followed with 11 sales each.

It's a good reminder that the new construction market can vary significantly from one community to another. Builder activity, available lots, price points, school zones, amenities and buyer demand can all influence where new homes are selling.

Buyers Are Getting More Room to Negotiate

One of the more interesting pieces of the July data is what happened with price reductions.

There were 24 new homes that sold after receiving a price reduction, exactly the same number as last year.

But the size of those reductions increased.

The average price reduction was $19,012, compared with $15,523 a year earlier.

That suggests that while builders and sellers aren't necessarily cutting prices on more homes, the ones that do require a reduction may be seeing larger adjustments to attract buyers.

Buyers also negotiated more successfully at the closing table.

Of the 56 new homes that sold in July, 34 sold for less than their final asking price. The average difference was $5,520.

Last year, 32 of 68 homes sold below their final asking price, with an average discount of $7,717.

For buyers, that's an encouraging sign. The new construction market isn't necessarily a situation where you have to accept the advertised price without negotiation.

Depending on the builder, community and individual property, there may be opportunities to negotiate the price, upgrades, closing costs, interest-rate incentives or other concessions.

HOA Fees Remain Fairly Consistent

Homeowners associations continue to be common with new construction.

Of the 56 new homes sold in July, 37 were located in communities with an HOA.

The average HOA fee was approximately $337.

That's remarkably close to last year's average of $335, despite the overall increase in home prices.

For buyers considering new construction, the HOA is something that should be evaluated alongside the purchase price. A lower-priced home isn't necessarily the better deal if it comes with significant monthly or annual fees, restrictions or future assessments.

What Does This Mean for Tri-Cities Buyers?

The July numbers paint a picture of a market that's becoming a little more balanced.

Prices are still increasing, but sales are slowing.

That's an important distinction.

Buyers may have more opportunities to negotiate than they did during the extremely competitive market of a few years ago. Price reductions are still occurring, and more than half of July's new-home sales closed below the final asking price.

At the same time, buyers shouldn't necessarily expect new construction prices to suddenly fall. Builders are still dealing with the costs of land, labor, materials, financing and development.

For buyers, the opportunity may be less about finding a dramatically cheaper new home and more about finding the right home and negotiating the best overall deal.

That could mean looking beyond the list price and asking about builder incentives, closing-cost assistance, rate buy-downs, upgrades and other concessions.

What Does This Mean for Sellers and Builders?

For builders and sellers, the July numbers are a reminder that buyers have choices.

Homes that are priced correctly and offer desirable features can still sell, but properties that sit on the market may need a stronger strategy.

With the average price reduction increasing to more than $19,000, pricing the home correctly from the beginning can be especially important.

The Tri-Cities new construction market isn't collapsing — it's simply slowing down while prices continue to move higher.

And that's a market worth watching as we move into the second half of 2026.

Market data provided by the Northeast Tennessee Association of Realtors® (NETAR) MARKET PULSE: New Home Prices Up, Sales Down - Northeast Tennessee Association of REALTORS®. NETAR represents more than 1,800 members and 100 business partners involved in residential and commercial real estate throughout Northeast Tennessee and Southwest Virginia.