By DON FENLEY

TRI-CITIES, Tenn. – Waiting lists may on the decline in the Appalachian Highlands apartment market, and some complexes are offering move-in incentives. But demand remains strong, and landlords are still increasing rents while scrambling to maintain occupancy rates and cut costs.

At the end of May, year-over-year rent increases for one-bedroom apartments ranged from lows of 6% for one-bedroom apartments in Johnson City, Bristol TN and Elizabethton to 15% in Greeneville. Two-bedroom year-over-year increased were highest in Bristol TN, up 36%. The three-bedroom annual cost increase was up 76% in Kingsport and 62% in Elizabethton

Here is how the median rents in late May looked, according to Zumper’s research department.

ONE-BEDROOM

Kingsport – $800, up 14%. Lease renewals at some of the larger complexes are coming in at 7%.

Johnson City – $800, up 6%

Greeneville – $750, up 15%

Bristol TN – $700, up 6%

Elizabethton – $585, up 6%

TWO-BEDROOM

Bristol, TN – $1,494, up 36%

Johnson City – $1,119, up 15%

Kingsport – $950, up 17%

Greeneville – $850, up 21%

Elizabethton – $635, up 23%

THREE-BEDROOM

Johnson City – $1,910, up 59%

Kingsport – $1,757, up 76%

Greeneville – $1,700, up 13%

Elizabethton – $1,700, up 62%

Bristol, TN – $1,400, up 27%

Zumper is an apartment listing service and research firm. Its data is based on company listings and is not inclusive of the broader market.

According to the Tri-Cities Apartment Association, the local occupancy rate is 96.33% and the average rent is $1,100. That’s not quite as strong as the occupancy rate for single-family rentals. During the second quarter it was 97.2%. A recent study by the National Association of Realtors (NAR) found the Tri-City’s rental market was the second tightest in East Tennessee. Only Knoxville had higher occupancy rates.

While some developments are being slow walked until investors get a better handle on the local market, others are charging ahead. Of course, plans are just that until building permits are pulled and construction is underway. The luxury apartment communities have excelled in both occupancy and rents and that has whetted investors’ appetite.

Although there is a lot of city hall and chamber of commerce talk about the lack of affordable and workforce housing, many multi-family communities – like the single-family market – have kept rents and prices above the affordable benchmarks.

The affordable housing benchmark is no more than 30% of gross income spent on housing. The latest regional Census count for renters is 7.6% (4,121) spent from 30 to 39% on housing while 20,167 (37.2%) spend over 35%. That count of housing stressed individuals will be updated later this year with more current data that most market watchers think will increase.

Local rents and home prices have increased dramatically during and after the pandemic as economic condition pushed the region’s traditional low-priced home prices to new highs. At the same time, landlords seized the increasing demand opportunity to adjust their rents to market prices.

The annual median sales price on existing home sales increased 61.4% from 2018 to 2022.

Here’s how the median rent increase during May 2018 until last month looked, according to Zumper’s data:

ONE-BEDROOM

Greeneville – up 59.9%

Elizabethton – up 37.6%

Johnson City – up 29.1%

Kingsport – up 32.7%

TWO-BEDROOM

Bristol, TN – up 130%

Greeneville – up 59.8%

Kingsport – up 51.3%

Johnson City – up 44.3%

Elizabethton – up 21%

THREE-BEDROOM

Greeneville – up 113.8%

Bristol TN – up 85.4%

Johnson City – up 74.7%

Kingsport – up 42.8%

Both rents and single-family home prices have increased faster than wages so much of the rental and single-family market has become much less affordable. The most recent Homeownership Affordability Tracker from the Atlanta Federal Reserve Bank rated Greeneville as the only affordable existing home sales market in the region. Still, for those who can arrange financing and can find housing they can afford ownership outweighs renting during this era when much of the public prefers to rent.

Categories: REAL ESTATE