The recession pushed many out of homes into rentals, or forced potential buyers to postpone real estate purchases. As a result, demand for rentals is higher than ever, with the monthly rents to match. The Wall Street Journal recently reported that "Apartment Rents Continue to Rise As Vacancies Fall" and "The average nationwide monthly apartment rent was $1,048 in the fourth quarter, up 0.6% from the third quarter and up 3.8% from a year earlier. The year-over-year increase was the largest since 2007 and a sign that landlords still have the upper hand they regained in 2010."
This is frustrating for many in cities with already pinched rental markets, like Chattanooga. Here the small number of rental developments left the city unprepared for the high demand created by both the economy and student growth at UTC outgrowing available dorm space. There was increased media discussion throughout 2012 about the state of Chattanooga's rental market. In September Nooga.com reported both high demand and new developments in the works to meet it, writing "Hundreds of units are in the works downtown, and demand for apartments in the area is high. But the market will have to become more saturated to drive rent prices down." In August Sean Phipps wrote a column on the many dives he's rented in Chattanooga, alluding to the common complaint that there is major disparity between the quality of rentals and their price.
The good news for those feeling the rental market pinch is that now is the time to buy. The recession pushed many to rent, but it also created a buyer's market. Job prospects and incomes are growing, especially in Chattanooga where the recession did not hit as hard. Yet this economic power is coming back before housing prices have gone back up. 2013 is the time to buy before housing prices bounce back with job growth and economic recovery, while the market is still in this sweet spot that can give many frustrated renters the upper hand in housing.
Chattanooga has not only the advantage of job growth, but also of many incentive programs to encourage home buyers to look at up and coming neighborhoods like Orchard Knob, Highland Park, and other downtown areas. These neighborhoods offer homes at low prices with the potential for grants and other buyer assistance from local foundations, and there are still many forclosures and short sales coming off the shadow market. It's a dream for first time buyers or those with smaller down payments who want a lot of bang for their buck.