Rents skyrocket – apartments a hot commercial property asset
Local rents are increasing at a rate almost four times the inflation rate in Elizabethton to 2.5 times inflation in Kingsport, Greeneville, and Bristol. The Johnson City rate is slightly less. All are increasing faster than wages.
Increasing mortgage rate trend to shift demand toward rentals making apartments a hot commercial real estate asset.
The latest check found 1 BR apartments rents in some of the Kingsport class B and C complexes are at/or slightly over $1,000 a month. That’s higher than the average – slightly under $700 a month – but as one manager said, new renters, snap them up every time one is open. As with the home sales market, many of those new renters are fresh to the area.
Whether it’s rent or mortgage payments, the general rule of thumb is to keep monthly housing costs to less than 30% of income. “And with rents surging nationwide, many renters’ budgets may be stretched beyond the affordability limit,” said Realtor.com® Chief Economist Danielle Hale. “With rents up by nearly 20% over the past two years, rental prices are likely to remain high, but we do expect some cooling from the recent accelerated pace.”
Applied to the current local household incomes, here’s the 30% affordability target for local cities. The first figure is the 30% target for median household incomes. The second is the target based on median family household income.
- Bristol – $1,052, $1,438
- Elizabethton – $950, $1,142
- Greeneville – $1,026, $1,243
- Johnson City – $1,054, $1,628
- Kingsport – $1,052, $1,467
NETAR is the voice for real estate in Northeast Tennessee. It is the largest trade association in the Northeast Tennessee, Southwest Virginia region, representing over 1,800+ members and 100+ business partners involved in all aspects of the residential and commercial real estate industries. Weekly market reports and information for both consumers and members are available on the NETAR website at https://netar.us