A recent Forbes article addressed millennials and how they are affecting the rental market. The article says that “86.4% of 18-34 year olds rent instead of own. That’s a record”.
In Charleston, this is very evident. Rising home costs influence the all-time high rental rate. For example the median home price in the Charleston area grew from $217,000 to $250,000 in the past year. The job market remains high and is continuing that way with many of the high paying jobs aimed at the millennial labor force. In the past, these young people would purchase a home as they relocated here or entered a new career. But not so much anymore. Rentals are what they prefer!
Why is a rental so much more attractive to this age group? Amenities!! Fitness Centers, Coffee Bars, Social Events, Pools/Outdoor Living Space, Electric Car Chargers, Boat Storage…..the list goes on and on! They like the flexibility of leaving for any reason including career. They also love the convenience of avoiding maintenance costs of home ownership and the typical “honey-do” lists.
Charleston area has felt the effects that companies like Boeing, Volvo, and Mercedes-Benz has had on our economy…….these 3 alone account for more than 3,400 jobs produced!
According to the Real Data Apartment Market Research, the Charleston area has a rental inventory of over 32,904 units. The average lease rate is around $976 per apartment home. The rental rate is rising a $1/sqft; the 3rd highest in the Southeast. These numbers reflect the apartment rental market and doesn’t even include single family homes. That’s another impressive statistic! Charleston had the fifth-highest rental rate increase nationwide for single-family residences for the July-September period compared to the same quarter last year, according to Rent Range, a rental market information provider. The average single-family rate in Charleston jumped 16.5 percent during the period while landlords earned 9 percent profit on their investments.
I would speculate that this wave isn’t about to recede anytime soon!