KNOXVILLE, Tenn. — New data shows the number of apartments available is increasing in parts of Knox County. However, real estate experts say the cost of renting is what is keeping some people from living in them.
Knoxville's 37932 ZIP code was the ninth-trending ZIP code in the nation for apartment construction growth, according to RENTCafé.
The website says in 2017, there were 680 apartments in the area, and in 2022 there were 1,848 apartments, marking a 171.8% change.
David Landes, a real estate appraiser, says while there are new apartments being built the affordability of the apartment is limiting who is able to rent in the area.
"Affordable apartments and new apartments are two different stories," said Landes. "The rent increase in Knoxville has been upwards of 50% in some areas over the past two years. And what that's done is it's priced people out of the market. So the same people that are looking for apartments and places live houses, rent and whatnot, they can't afford what is being built."
The 37932 ZIP code is near the Hardin Valley area. Landes says it's the "epitome" of new construction in the city over the past ten years. He also says that the ZIP code is one of the most expensive ZIP codes in Knox County, and residential areas in that area can be pricey.
"I don't think it's going to be a blight on our economy so much as just pushing affordable housing, people looking for affordable housing further and further out," said Landes. "I don't think that those units will sit vacant very much. I don't think we've had a problem with vacancy. Really, in the past ten years, our vacancy has not been an issue. So I believe they will be filled. It's just they won't be filled by the people that are looking."
He says the high costs won't keep all renters away.
"They're being filled because people are being priced out of the housing market," said Landes. "So people that can't afford houses are looking towards some of the apartment rentals that are available. But what's happening as far as the people being displaced there, the sprawl is pushing them out to outlying areas — different counties, different ZIP codes, you know, further away from schools, employment, places of worship, and so forth."
As for a solution, he says it won't be simple.
"Short of legislation? I don't know of one," said Landes. "Again, like I said, I've been (in this work for) 25 years. Real estate is cyclical. Demand will go up, prices will go up. Demand will go down, prices will cool. Do I think we're in for another crash, like 2008? No. As long as inventory is low, we're not gonna see very much of a contraction of prices at all. We're gonna see a contraction of overall volume, but not necessarily prices."