MEMPHIS, Tenn. — Memphis rents are hitting their highest level according to Realtor.com. One reason for the price hike according to economists and realtors, the shortage of affordable housing is forcing more homebuyers into the rental market.
Stephen Ford, with the Carter Group in Memphis isn't surprised to see the numbers are climbing.
According to Realtor.com, the median rent in Memphis is $1,150, up 23% from June 2020. The Realtor.com data also found the median price of a studio in Memphis is $995, $1,125 for a one bedroom and $1210 for a two bedroom.
"It doesn't surprise me but it's disappointing because there is a lot you can do with $1200 on the purchase side, if there is anything to buy, but there is nothing to buy so everyone is being shoved into the rental market, " said Stephen Ford, realtor.
Ford operates The Carter Group, a Memphis based real estate company that also manages rentals. Ford agreed, a lack on inventory for buyers is a contributing factor to rising rents. Ford also said, Memphis is a heavy investor town so thousands of properties are owned by in-and-out-of-state investors. Large companies are more prone to raise rates Ford said compared to "mom and pop" landlords.
Ford said he rarely raises rent on a tenant unless there is a reason to do so such as an increase property taxes or when a unit is vacated. "When you have a long term tenant its counter productive to raise the rent because if you have a good tenant you don't want to run them off," said Ford.
According to Realtor.com, the U.S. median rental price grew 8.1% year-over-year in June to a new high of $1,575. Also, according to the company's news release, rents in 44 of the 50 largest U.S. markets reached the highest levels in two years.
According to the Realtor.com data, only Riverside, California saw a higher rent increase year to year at 24%. The median rent there is $2112. Nashville/Davidson County saw a 7.3 % increase according to the data, the median rent is $1416.
Nashville has seen home prices and rents increase in the community for several years according to experts, while Ford said Memphis has had a low cost of living over the years compared to other cities, and he added that could be one reason for the sharp increase.
"On the face it may seem like it would be a pretty stiff increase. Historically, Memphis rents have been a little depressed so it might be that some of the increases are connected to catching up with a normal market," said Ford.
"It is really hard to find a place right now, prices are sky rocketing, " said Austin Smith, renter. Smith lives near the University of Memphis had said he has been looking for an affordable place to live for months.
"The markets that are seeing the biggest rent increases tend to be the most affordable, so rent in Memphis is up substantially compared to last year bunt its still more affordable that the U.S. overall," said Danielle Hale, Realtor.com Economist. Hale added, " We're seeing rental vacancies remain historically low and what that means is there are not a lot of empty units sitting available so landlords aren't feeling like they have to bargain."