Migration and the Rental Market: A Knoxville Snapshot

Inbound Searches for Knoxville Apartments (From Apartmentlist.com)
Inbound Searches for Knoxville Apartments (From Apartmentlist.com)
Apartment List published its newest Renter Migration Report, which showed that migration between cities and states has slowed since its blistering pace in 2020 and 2021. While the general migration patterns remain the same — people are leaving the east and west coasts, particularly California and New York, for mostly Sunbelt or Mountain West states — each year the trend continues downward.
Over half of the people looking for an apartment in Knoxville (and using the Apartment List site) are from out of town and the majority of interest is from the Nashville area, followed by Charlotte and Atlanta. Interest extends, however, to many portions of the country, from Los Angeles, to Miami, and Boston. At the same time, about 25% of the people currently in Knoxville and looking for an apartment are searching in another metro area, with the largest group looking toward — wait for it . . . Nashville. So, even as people look to move in, others are exiting, often to and from the same places.
The trend of movement from more-expensive to less-expensive markets is expected to continue and the result is, unfortunately, putting upward pressure on rental (and purchase) prices in the more affordable areas.
Tennessee gained a net of .9% in population over the last year from migration. New York lost the most, with a net loss of 1.1%. Florida and Texas posted the largest net population gains from migration, while Tennessee ranked fifth.
And for price?
Apartment List’s most recent National Rental Data latest report on rent prices nationwide indicates that they continue a five month trend of decline. Here’s what they had to say about the current state of rent in the U.S.

. . . The rental market closed out 2023 with a fifth straight month of negative rent growth, as the nationwide median rent fell by 0.8 percent to $1,379.1 The recent declines are in line with the rental market’s typical seasonal pattern, as fewer renters are looking to move at this time of year, although this year’s dip has been a bit sharper than what we normally see.

Year-over-year rent growth has bottomed out but remains in negative territory at -1 percent, meaning that on average, apartments across the country are slightly cheaper today than they were one year ago. This stands in sharp contrast to the prevailing conditions of 2021 and 2022, when rent prices were surging and year-over-year growth peaked at 18 percent nationally. But despite this cooldown, the national median rent is still nearly $250 per month higher than it was just three years ago.

Average U.S. Rent Prices (From Apartmentlist.com)

The group notes that the vacancy rate of 6.5% reflects a continuing easing of the market, partially because of an unprecedented rate of apartment construction. Additionally, while some of the decline is expected with the season, they note that the steepness of the decline is higher than typical. Year-over-year rent growth offers a wider-angle view and that fell to zero this past June for the first time since early 2020 and has “now been in negative territory for seven consecutive months.” December rents were 1% lower than those a year earlier.

But while there is good news, the group recently reported that 48% of Knoxville renters are “cost burdened,” meaning they spend over 30% of their income on rent. This is now the case for 21.8 million households nationwide, the most ever. Further, nearly a quarter of Knoxville residents spend over half their income on rent. That said, rent increases in Knoxville and income increases from 2019 through 2022 were level at 18% for each.
Their most recent research on Knoxville rent (from October) showed rent falling 1.7% in that month and at 1.1% year-over-year growth vs 12.1% year-over-year growth a year earlier. The damage, however, was done in 2021 and 2022, “Since the start of the COVID-19 pandemic in March 2020, citywide rents have risen a total of 57.9%.” The group reported that (as of October 2023), “median rent in Knoxville is $1,153 for a one-bedroom unit and $1,449 for a two-bedroom unit. And the citywide apartment vacancy rate stands at 4.9%, up 1.3 percentage points from this time last year.”
Of course, some of these numbers reference the metro area and none of them are specific to downtown rent prices. There are certainly glimmers of hope in the data, but still plenty to cause concern. Here’s hoping that 2024 continues the slowing or decline in housing prices so that not so many of our neighbors struggle.

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