Average monthly rents increased to $790 recently in Middle Tennessee, their highest first-quarter average since the economic downturn began.
The Greater Nashville Apartment Association attributes this rise largely to an occupancy rate of nearly 95 percent. Local investors and industry stakeholders say this may continue, noting the region has seen little construction in recent years. While developers are picking up the pace of their activities now, it will take some time for the new projects to be completed.
Still, builders were working on 3,700 new units at the end of March. That doubles construction during the same period last year, according to the Tennessean, so the impact on the market is likely to be substantial once these units begin coming online.
In the meantime, the GNAA noted that household incomes in the region are declining, forcing many residents to spend a greater percentage of their incomes on rent even in submarkets which have not experienced rent growth. This pressure may counter the impact of high demand, to an extent, forcing landlords and rental property management professionals to hold rents stable to avoid forcing tenants out.