By DON FENLEY

TRI-CITIES, Tenn. – Rents may be coming down in urban and metro areas, but’s there is not much local relief.

There are some move-in and lease renewal incentives knocking the edge off local rent hikes, but landlords have not backed off the base rents and higher fees. They continue increasing faster than inflation. Metro and urban rents are coming down and some predict they will drop to pre-pandemic prices. That’s not likely locally. The region’s traditional low rents have risen to market value with the lack of housing in the area.

Compared against pre-pandemic averages, local one-bedroom rents are up:

• 27% in Kingsport.
• 29% in Johnson City.
• 28% in Bristol, TN.
• 60% in Greeneville.
• 38% in Elizabethton

Since the pandemic, two-bedroom rent increases have soared:

• Kingsport – 61%
• Johnson City – 44%
• Bristol TN – 98%
• Greeneville 65%
• Elizabethton 49%

Last month the avg. going non-incentive rent for one-bedroom units was $800 and up across the region. Some were going for almost $900 a month in Kingsport, and that wasn’t the Class A units. Two-bedroom apartment rents varied by community from about $1,300 on the high side to $800 on the low end.

Those rents are averages from apartment listing service Zumper and reflect the rents of units listed with their site only.

Several of the major apartment listing services took a public stand on apartment add-on fees and vowed to disclose them in listings. One example of how fees affect rents can be found in Kingsport’s Allendale community. The one-bedroom base rent is $720 a month. Fees that include damage water program, technology fee, water and sewer flat rate, renter’s insurance, pest control and trash service boost the total to $875 a month.

While much of the rent focus has been on apartments, the number of build-to-rend townhome projects is increasing. They compete with apartments for renters who don’t like someone living above or next to them and also want a little personal outside space.

At last count, there were a little over 8,000 apartment units and 59,000 single-family and townhome rentals in the Tri-Cities region.

From a commercial real estate transactions perspective, multi-family has outperformed the other sectors with 42 sales so far this year this year, down from 46 last year. According to a National Association of Realtors (NAR) insights analysis, multi-family performance is divided along metro area lines.

Demand in the three-county Johnson City metro market has been stronger than it is nationwide. “As a result, rents rose faster, and the vacancy rate (5.9%) is lower than it was last year (6.1%).

Demand in the four-county Kingsport-Bristol metro area is weaker than it is nationwide, with a slower absorption rate. Despite weaker conditions, rents have risen faster than they did nationwide, and the vacancy rate is lower. The current local vacancy rate is 5.5% compared to 2.3% this time last year.

The latest report from the Tri-Cities Apartment Association cities a vacancy rate of 3.7%.

The Johnson City cap rate is 5.9%, down from 6.1% last year. In the Kingsport-Bristol metro area it’s 6%, down from 6.4% last year.

Categories: REAL ESTATE