July 28 – Boosted by an influx of new residents and steadily rising house prices, rental rates in Chattanooga jumped more than double the national average and far outpaced worker wage growth over the past year. past year.
Chattanooga has ranked among the top U.S. markets for apartment rent increases over the past 12 months, according to new research from housing website Zumper released Tuesday.
The price of a typical one-bedroom apartment in Chattanooga has increased 16% since July 2020 to an average of $1,160 per month, Zumper said. Two-bedroom units, on average, have grown even more than 17.5% over the past year to $1,210 per month in the Chattanooga area.
Chattanooga rental rate increases more than doubled from the 7% nationwide gain for one-bedroom units and the 8.7% increase in average U.S. rates for two-bedroom units bedrooms.
“Across the country, rents are rising — and fast,” said Jeff Andrews, a data reporter at Zumper who helped compile the report. “The first year of the COVID-19 pandemic saw home prices rise at an unprecedented rate as homeowners and would-be buyers flooded local real estate markets hoping to adapt to quarantines, working from home and other pandemic-related lifestyle changes. second year of the pandemic, the same seems to be happening in rental markets. »
Despite the overall increase in average rates over the past year, Zumper found that rents have fallen by more than 10% over the past year in some major high-cost cities like San Francisco, New York, and Oakland, in California, some workers having left these cities and moved. to more affordable markets to do their work remotely.
The influx of these workers into Chattanooga, combined with land restrictions and rising home prices in Hamilton County, has kept many tenants from becoming buyers. The median price of homes sold by real estate agents in Chattanooga last month rose more than 22% from a year earlier and it also appears to be boosting rental rates in Chattanooga as a greater share of residents choose to rent rather than buy their home.
Outside investors lured by cheaper real estate prices in Chattanooga than neighboring Atlanta and Nashville have also pushed up apartment prices, with these investors spending nearly $500 million over the past five years to acquire facilities. existing multifamily homes in Hamilton County.
Zumper noted that many Atlanta suburbs have seen a steady influx of people over the past decade, and as a result two-bedroom unit rents have jumped 20% in Marietta and Duluth over the past year. .
“Atlanta may not have been considered a pandemic destination, but that hasn’t stopped it from posting some of the largest year-over-year rent gains in median rent in the nation,” Andrews said. “While the city of Atlanta itself saw relatively modest gains of 0.8 to 10.1 percent, the suburban area surrounding it saw tremendous growth.”
But Zumper said the boom in the apartment market could quickly change if the delta variant of the coronavirus spreads and brings back the pandemic and its economic downturn.
“If the pandemic spins out of control again, what will happen next in rental markets is anyone’s guess,” Andrews said.
Contact Dave Flessner at [email protected] or 423-757-6340.