TRI-CITIES, Tenn. Realtor.com’s Current Rental Affordability Report shows that many spend more than a quarter of their monthly budgets (26.4 percent) on rent. This is what happens in large metro areas. Some conditions are similar in smaller metro areas such as Tri-Cities. Others are much different.
“Rents are much higher than in previous years and take up a large portion of income, which is growing at a slower rate than inflation,” said Danielle Hill, chief economist at Realtor.com. “Still, there are some bright spots for renters. Based on the general rule of keeping housing costs below 30 percent of your salary, renters in large metro areas were able to follow best practices in August. Additionally, rental growth continued to slow. If Continued with these trends and typical seasonal cooling, tenants may be able to keep housing costs a manageable portion of their budgets in the coming months.”
There are some signs that local rent increases are beginning to subside. More inventory is available in the market to provide additional competition in the three-bedroom cottage category. According to Rent.com, The Villas at North Park in Kingsport is putting its first three-bedroom units on the market. Rentals are in the $1,850 per month range. As the developer is working on construction, more units will be put on the market.
In Kingsport, average rent for one-bedroom units has fallen to $790 a month, according to Zumper. Older condominiums dominated by the Texas Investor Group (ValCap) are still advertising $1,000 a month for one-bedroom units, but less expensive options are beginning to emerge for those willing to shop and get on a waiting list. Compared to last year, rents for one-bedroom units are up 30 percent based on an average of $790. The median rent for a two-bedroom unit this month is $999. This is a 43% increase over last year. The median rent for three-bedroom units is $1,350, up 28 percent from last year.
The average price for a one-bedroom room in Johnson City is $895 per month, a 38 percent increase from last year. Average rent for two-bedroom units is $1,092, up 29 percent from last year. The typical rent for a three-bedroom condo is $1,637 a month, up 38% from last year.
Zumper lists the typical rent for one-bedroom apartments in Bristol at $899, up 35 percent from last year. The average price for a two-bedroom unit is $1,027, up 28 percent from last year. The average price for three-bedroom units is $1,400, up 38% from last year.
Apartment rents in the US rose 18 percent in 2021 and have continued to increase this year. According to a new analysis of apartment listings, prices are rising faster in cities that were previously considered “low cost.” This is the situation in Tri-Cities. The construction of new apartments and more competition from single family units and apartment buildings built for rent are also beginning to emerge in the local market. “We are seeing a complete reversal of market conditions in just 12 months, as we go from demand that significantly outpaces available units to new deliveries that outpace lackluster demand,” said Jay Libeck, national director of multifamily analytics, CoStar Group, in prepared notes. Another report from Yardi Matrix shows that average apartment rental demand recently fell for the first time in 2022, and that’s starting to show up in the local market.
So far, the demand for apartments and rents has been high. One thing domestic market watchers are focusing on is higher interest rates. They tend to put a downward pressure on mobility over time. If that happens, it will take a long time from the rush of new residents to the area.
Although 25 percent of income on housing is the generally accepted norm, 30 percent is a number that puts tenants in a stressful housing situation. When applied to current domestic household incomes, here’s the 30% affordability target for the city’s total. The first number is the monthly target for median household income. The second is the household mediator.
- Bristol – $1,052, $1,438
- Elizabethton – $950, $1142
- Greenville – $1,026, $1,243
- Johnson City – $1,054, $1,628
- Kingsport – $1,052, $1,467
© 2022 donfenley.com
Categories: real estate