Rental Rates Drop But Home Prices Continue to Rise in Chattanooga
Despite a drop in rental rates, home prices in Chattanooga continue to rise, according to a recent study by Zumper, a rental rate service. Over the past year, the average price of apartment leases has fallen by 5.4%, with a one-bedroom apartment now costing an average of $1,220 a month and a two-bedroom apartment priced at $1,400.
Interestingly, despite the drop in rental rates, Chattanooga sits at the 65th position for the highest average rent among the top 100 U.S. cities. The rent rates for a one-bedroom and two-bedroom apartment in Chattanooga are $306 and $500 respectively below the national average.
Contrasting Trend in the Home Market
While the rental market is experiencing a downward price adjustment, the home market tells a different story. Listed home prices in Chattanooga have hit record levels, as indicated by the Greater Chattanooga Realtors’ multiple listing service. The median price of sold homes in May hit an all-time high of $344,000. This price increase marks a 6.5% increase from the previous year and a significant jump when compared to the median price of homes sold seven years ago.
Kadi Brown, the president of the Greater Chattanooga Realtors association, attributes this continued rise to Chattanooga’s robust real estate market resilience and attractiveness. She points out that despite broader national trends showing a slight cooling due to higher interest rates and escalating prices, Chattanooga’s property market is proving resistant.
An Increase in Housing Inventory
The inventory of homes for sale has also increased, reflecting a bid by builders to keep pace with the demand for housing in Chattanooga. The surplus of rental units on the market is not a reflection of a lack of demand, but the result of an increase in the number of available apartments. According to a study by commercial real estate firm CoStar, over the past year, the demand for apartments has tripled.
Are Chattanooga’s Renters Benefiting?
In the light of the current situation, Chattanooga’s renters stand to gain from the rental price drop. However, the lower rental rates seen over the past year follow several years of inflation in rental rates that saw prices rise significantly. While this saw rents drop slightly over the past 12 months, they still remain well above pre-pandemic levels.
In contrast, the city is experiencing an influx of new development, with an estimated 2,200 more apartment units currently under development or construction. While high borrowing costs have limited new development in other parts of the country, Chattanooga seems to be bucking the trend.
For further queries, please contact HERE News at herenews@network.com or on 1-800-123-4567.
