Knoxville Fights for Position
The city is in the midst of a rental housing revival, spurred by trend-defying economic development.
Knoxville rent evolution, click to enlarge
Knoxville is in the midst of a rental housing revival, spurred by the metro’s trend-defying economic development. The market registered limited inventory growth, while both home prices and rents continued their upward path. With occupancy in stabilized assets staying above 95.5 percent in both the Renter-by-Necessity and Lifestyle segments, demand continues to be strong across asset classes.
While employment growth has tapered, key sectors such as manufacturing and construction are driving record-low unemployment rates. A burgeoning hospitality pipeline has resulted in strong job growth, as the sector added 2,400 positions in the 12 months ending in February. Meanwhile, manufacturing continued to expand against type. The latest projects to boost the sector are manufacturer Protomet’s $30 million investment in Maremont’s former plant in Loudon County and Scapa Tapes North America’s expansion project in Knox County, which is worth an estimated $40 million.
Knoxville’s multifamily pipeline remains limited, with 1,439 units underway as of April and an estimated 700 units in this year’s pipeline. Modest inventory expansion and strong occupancy will likely result in further improvement, leading Yardi Matrix to forecast around 3.0 percent growth in 2018.
