Apartment rental rates rose nearly five times faster than worker wages in Chattanooga last year as demand for rental housing continued to grow, even as more properties were added to the market.
A survey of apartment rental rates by Zumper found that the typical one-bedroom apartment in Chattanooga is now renting for $760 a month, or 15.2 percent more than a year ago. Chattanooga ranked among the top 10 major cities in America for the rate of increase in such apartment rental rates, although local apartments still rent, on average, for a third less than the $1,198-a-month average rent for a one-bedroom apartment among all of the top 100 U.S. cities.
Top cities for apartment rate increases
The average one-bedroom apartment rental rate rose in most of the top cities in America in the past year. The fastest growing cities for monthly rental rates for such apartments were:1. Cleveland, Ohio, up 15.9 percent to $8802. Durham, N.C., up 15.8 percent to $1,2703. Norfolk, Va., up 15.7 percent to $9704. Denver up 15.7 percent to $1,9805. Minneapolis up 15.6 percent to $1,8506. Orlando, Fla., up 15.5 percent to $1.4607. Tallahassee, Fla., up 15.4 percent to $7508. Long Beach, Calif., up 15.3 percent to $1,5809. Chattanooga up 15.2 percent to $7609. Winston Salem, N.C., up 15.2 percent to $7609. Augusta, Ga., up 15.2 percent to $760Source: Zumper survey of rates for one-bedroom apartments in the 100 biggest U.S. cities.
"We have a lot of people relocating here and with the shortage of available housing now, we're seeing a lot of people moving into apartments while they are looking to buy a home," said Geoff Ramsey, president of the Chattanooga Association of Realtors and a Re-Max Realtor who owns a number of local rental housing units. "The low inventory of homes for sale is forcing more people to rent and then a lot of people coming to town want to rent first to get to know the market before they buy a house."
Even with 3,000 additional apartment units being added to the downtown area within a 2-year period, Ramsey said he thinks there is still demand for more apartments in the entire market area.
The U.S. Bureau of Census estimated last week that Chattanooga added nearly 2,000 more residents in the city last year - the most of any year since 2010.
Ramsey said he personally rents a one-bedroom downtown apartment for $950, in addition to his East Brainerd home.
"That was hard to imagine a few years ago, but the market has really changed," he said.
The increases in rental rates were far above the 3 percent average increase in wages and benefits for the typical work in Chattanooga in the past year.
But even with the higher costs for apartments, Chattanooga rental rates for one-bedroom apartments were still 37 percent lower than the U.S. average and only about one-fifth of the $3,490 average for San Francisco - the most expensive apartment market in the country where one-bedroom units average $3,490 a month.
Among Tennessee's major cities, apartment rates were highest in Nashville, where one-bedroom apartments are renting for an average $1,390 a month. Knoxville' rates for a one-bedroom unit average $780 a month while Memphis is the cheapest of the state's biggest cities at $710 a month.
The Zumper National Rent Report analyses rental data from over 1 million active listings across the United States. Data is aggregated on a monthly basis to calculate median asking rents for the top 100 metro areas by population, providing a comprehensive view of the current state of the market.
Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.