Of the top 10 most expensive American cities to be a renter, only one of them is in the Southeast – Miami (around $1,900 US for a one-bedroom rental in 2016/2017). This part of the country has been one of the most affordable and genuinely profitable real estate hubs in the U.S.
What’s Happening in the Southeast?
Because there are no market manias a la Silicon Valley and San Francisco, rental properties in the southeastern United States maintain a much more affordable rate. Cities are generally less crowded and polluted than the American coastlines, although there is still an international, big city feel to places such as Atlanta, Charlotte, Memphis, and Orlando. The big question that renters and homeowners want to know – will the Southeast ever experience the huge upswing in starts or in prices that other parts of the country get?
Rental vacancy is usually driven by industrial vacancy in the Southeast and the South. Industrial vacancy is at an all-time low in the Southeast’s major cities, meaning there are plenty of jobs for skilled labor and university educated administrator types. This is the best type of job market to have for rent – the entry-level salaries here are just enough to sustain renting a property without undergirding too much property ownership.
Nashville alone is expected to build over 3.5 million additional square feet of office space this year. As a result of this new business growth, every market in the Southeast experienced an average 10% rise in rental asking prices. 48% of the new immigration in the United States is coming to the Southeast. Although much of this attention is focused on family and multifamily residences, you can bet that rising home prices will turn these new prospects towards renting quite soon.
Looking Ahead in the Southeast
In addition to immigration and new business bringing prospects to the area, there is a revamped interest in tourism as well. Tourists need places to stay, and short hotel visits can soon turn into extended rentals and even new property ownership. As housing starts have not yet overtaken total interest in residency, real estate professionals do not expect the move to rentals in the Southeast to occur within the next few months. However, as room on the coastlines dries up, the next big thing might be the international cities of the Southeast.
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