One- and two-bedroom rentals in Memphis are among the cheapest in the 100 largest cities in the country, according to a new National Rent Report by Zumper, a rental home search engine.
Memphis is tied at No. 84 with Augusta, Georgia, and Oklahoma City. The median price for a one-bedroom rental in Memphis this month is $750. A two-bedroom rental costs $810, data from the San Francisco-based company shows.
That’s despite a 13.6 percent increase for one-bedroom units and a 14.1 percent increase for two-bedroom units since January 2018.
According to Crystal Chen of Zumper, the increase in rent, especially at the end of the year when rent prices tend to fall because of a slowdown in moving, is a symbol of Memphis’ desirability.
“On a larger scale, people look at Memphis for larger-city amenities, like sports teams and great health care options, but at a much more affordable cost of living overall,” Chen said, adding that although prices rose, a one-bedroom apartment in Memphis is still about $500 cheaper than the national median.
“There is great job opportunity, like with FedEx, who’s also modernizing the Memphis SuperHub, and other large giants like Mitsubishi opening manufacturing plants in the city,” Chen added. “All of these factors make Memphis an appealing place to move, creating an increased influx of renters who drive up prices for apartments.”
Chen said the prices in growing neighborhoods like Downtown Memphis will likely continue to rise until more apartments are built to ease the demand.
Several apartment buildings are in various stages of development all over Downtown. One project near the corner of Dr. Martin Luther King Jr. Avenue and Danny Thomas Boulevard and another near the National Civil Rights Museum will add more than 250 new units to Downtown.
Those projects are small compared with the 793 apartments planned for Union Row, the massive $950 million development planned to transform Downtown, adding apartments, office space, retail and a grocery to a stretch of Union Avenue.
When Union Row was announced in November, Jennifer Oswalt, president of the Downtown Memphis Commission, said the occupancy rate for Downtown apartments was already above 95 percent.
Those new units could help satisfy the housing demand and ease the cost of living Downtown, Chen said.
Prices rise slower in other Tennessee cities
While prices in Memphis continue to inch upward, the cost of one- and two-bedroom rentals in Nashville, Knoxville and Chattanooga rose at slower rates in the past year.
In Nashville, the most expensive city for renters in Tennessee and the 26th most expensive in the country, a one-bedroom rental costs $1,330, while two-bedroom rentals cost slightly more at $1,380. That is only about 3 percent more than one year ago.
Chen said that may be a sign that there are finally enough apartments available in Nashville to keep up with the housing demand. Since 2015, the cost of one-bedroom rentals has spiked by 31 percent.
“A lot of construction has been developed to meet this high demand the last few years, and it seems the available supply is meeting the demand enough to finally relax the spiking prices in this city,” Chen said.
In Knoxville and Chattanooga, the 76th and 78th most expensive cities, respectively, the cost of one-bedroom rentals grew a bit faster. In Knoxville, where a one-bedroom costs $800, prices are up 9.6 percent. In Chattanooga, where a one-bedroom costs $780, prices rose 5.4 percent.
Prices of two-bedroom rentals in both cities rose between 13.9 and 14.1 percent.
According to Chen, the spike in Knoxville is a sign of a cultural shift.
“There seems to be a shift in perspective away from wanting to just own a single-family home,” Chen said. “This is illustrated by the increase in demand for apartments in downtown Knoxville, where many of the new rentals are located.”
*This article was originally posted on Commercial Appeal by Desiree Stennett. To view the original article visit: https://bit.ly/2FbaOHF
Reach Desiree Stennett at [email protected] or 901-529-2738 and on Twitter @desi_stennett.