Knoxville Multifamily Market Report
Market Overview
Similar to other Sun Belt metros, Knoxville has recorded a strong influx of residents to boost its population. It has grown by 13,000 people over the past three years, which is double pre-pandemic norms in the metro. The average household income here is $55,000, with 6,730 households.
One factor impacting the population is the University of Tennessee. Enrollment here is around 32,000 students, leading to an increase in demand for off-campus housing. The largest employer here is Oak Ridge National Laboratory, which belongs to the U.S. Department of Energy and employs over 13,000 residents.
Residents in the metro can also look forward to baseball returning to Knoxville. The city’s baseball field in East Knoxville will be redeveloped to host the Smokies, which is an AA team of the Chicago Cubs. Upon opening in 2025, the stadium will also host concerts, festivals, and new facilities that can be used for meetings or conferences. The multi-million dollar redevelopment is expected to bring in $116 million and create approximately 3,000 jobs.
The University of Tennessee’s Top Five Fields of Study
- Business, Management, Marketing & Related Support Services
- Engineering
- Social Sciences
- Biological & Biomedical Sciences
- Psychology
Top Five Employers in Knoxville
- Oak Ridge National Laboratory
- Covenant Health
- The University of Tennessee, Knoxville
- Knox County Schools
- Walmart, Inc.
Knoxville Multifamily Market Trends
Knoxville has been experiencing its largest supply wave in the last 15 years. In the past year, 1,900 units were delivered. This surpassed the previous high for deliveries—1,600 units—that was set in 2021. As more supply has been added to the market, the vacancy rate has shifted up. This metric is currently at 6.8%, which is the highest level in about 10 years.
Rents in the sector are also feeling the effects of the current high vacancy rate. By 2Q24, asking rents grew around 2.0%. However, this rent growth is still a low level from the double-digit rents that occurred in the metro during 2021-2022. The average asking rents of around $1,430 per month here are still far below the rates seen in nearby Nashville.
Downtown Knoxville—home to the University of Tennessee—has been heavily impacted by the new supply. However, the school’s proximity will help decrease vacancies as students search to secure leases near campus. Church & Henley was delivered in the area last year. The facility is made up of 237 units and is Class A. Students on the hunt for a higher-tier apartment may find this property attractive because of its walkability to other locations, as well as proximity to the university.
The development of Lone Tree Pass in Downtown Knoxville will also attract residents here. This will be a mixed-use facility, with one building offering space for restaurants, retailers and offices; meanwhile, the other building is made up of condominiums that will begin going on sale in spring 2025. In total, Lone Tree Pass will be an investment of $30 million upon completion.
Over the past year, Knoxville saw 32 deals take place. The majority of these deals were for Class B and C properties, which often sell between $50,000 to $150,000 per unit. One example of these deals is the Greenbrier Ridge complex, marking the largest sale so far in 2024. The Class C property sold for $37 million in February, with a per-unit price of $145,099. The Summit, a 120-unit Class B property, has also aided in increasing sales volume here. This complex was sold right at the beginning of 2024 with a sale price of $32 million. Both properties are located in the outlying submarkets of Knoxville, aiding demand for multifamily housing in these suburban areas.
