By DON FENLEY
TRI-CITIES, TENN. – NE Tennessee’s multi-family housing sector has equaled and, in some cases, exceeded demand in the single-family market. Some research by the Wall Street Journal adds some context to renting – especially the top end of the single-family and multi-family markets.
A deep dive into some Census data by the WSJ found that three million U.S. households marking over $150,000 and up still renting. Interviews with some of those renters found they plan to continue renting instead of becoming homeowners. Some pundits have long argued that renting and investing in the market has better long-term financial returns than homeownership. Those arguments are gaining favor in today’s market.
According to research, high earners are more likely to rent than in the past. The number of renter households making $150,000 or more a year rose by 87 percent between 2016 and 2021.
Locally the number of households in the Tri-Cities Combined Statistical Area $150,000 income range is up 4.4 percent. And the top end ($200,000 and up) has increased by 4.7 percent. The number of renters in those households paying $1,500 to $3,000 a month or more is up 61 percent.
Those numbers explain some of the commitment to expand the region’s Class A apartment communities. The most recent was the purchase of The Retreat in Kingsport. The new owners plan to add another 48 to 60 units to the luxury apartment home complex.
The shift toward renting has perked up all segments of the local rental market. Currently, there are about 8,000 apartment units and 64,000 single-family rentals in the region. The number of single-family rentals is down from last year according to ATTOM Data Solutions, a property data provider.
The most current Census data says almost one in three of the region’s residents rent and the region’s vacancy rates have dropped from 4 percent to 3 percent or better in the apartment communities and a little over 2 percent in the single-family sector.
Categories: REAL ESTATE