Occupancy Slides, But Rental Market Still Tight
The metro’s multifamily market had a steady year in 2023, with healthy demand that kept rents up and occupancy well above the U.S. average, while 2024 also got off to a steady start, according to the latest Yardi Matrix Knoxville multifamily market report. The average rent increased 0.1% on a trailing three-month basis through February to $1,459, outperforming the U.S. rate, which was down 0.1%, to $1,713, as noted in the national multifamily market report. The occupancy rate in stabilized properties declined 40 basis points year-over-year through February, to 96.5%.
In the 12 months ending in December, Knoxville’s employment market added 11,400 jobs, up 3.1% and outperforming the 2.0% national growth rate. The metro has been outpacing the U.S. since August 2022. The unemployment rate stood at 3.3% in January, surpassing the U.S. (3.7%) and the state (3.5%), and trailing Nashville (2.8%). In 2023, information (-400 jobs) and leisure and hospitality (-100 jobs) contracted, while financial activities remained flat. Job gains were led by education and health services (4,700 jobs), government (2,800 jobs) and professional and business services (2,200 jobs).
The market had 3,573 units under construction in February, while last year just 517 units were delivered. The volume of new construction increased last year, favoring Lifestyle properties. Meanwhile, transaction activity picked up in the second half of 2023, climbing to $303 million in what was a solid year. In 2024 through February, only one asset changed hands.
Read the full Yardi Matrix Knoxville Multifamily Market Report: April 2024
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