Image Credit: Nathan C. Fortner / CC
The Tennessee Conservative Staff –
According to a new report from the East Tennessee Realtors group, the cost to live is continually increasing in the Knoxville area.
When compared to the previous year, the price of rent for Knoxville apartments increased by 9.6%. During the same time period, there was a 2.3% rent growth at the national level. This indicates that Knoxville’s rent grew by more than four times the national rate.
Rent for new leases rose by 11.4% during the previous year, showing an increased price for individuals in the market for an apartment. According to the report, renewal leases also rose by 9.4%.
The city’s occupancy rate was down 2.2% from last year, bringing it to 96.3%. Nationally, the occupancy rate was 94.7%. Knoxville had 3,214 units under construction during the second quarter of the year which is a record high for the city.
According to the report, “East Tennessee’s apartment market is poised to soften over the next year as a wealth of new inventory becomes available in close proximity. New supply is likely to outpace demand, slowing the rate of rent increases and leading to lease-up challenges, especially for high-end Class A units in more urban areas.”
Despite some signs the rental market was predicted to soften, the demand for multifamily units would be maintained over time.
Fewer homes were sold in June in East Tennessee. It was down by 6.2% compared to May and down by 16.2% compared to last year. The median home sales price was $350,000 in June. This was an increase of 7.3% compared to last year.
There was little to no change in the number of homes available for sale compared to last year. However, half of the homes sold were only on the market for a week at most. According to the East Tennessee Realtors group, around 30% of those homes sold for more than the asking price, with 15% selling for at least $10,000 more than the asking price.
“Buyer and seller activity has normalized to a degree but overall housing market conditions are still far from normal. The lock-in effect, whereby homeowners are locked in with low mortgage rates and are reluctant to list their homes for sale, is likely to persist – keeping inventory low and competition high,” the report said.
Mortgage rates are estimated to hover between 6.5% and 7% through the end of the year.
