Greenville rental rates see small decline as number of apartments increases

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As more apartments are going up in Greenville, rents are going down — at least for now.

Greenville rents declined 1 percent in November, the fifth straight month that the city has seen a decrease, according to Apartment List’s National Rent Report. Rent in Greenville is down a modest 1.1 percent compared with a year ago. South Carolina saw a 2.3 percent increase in year-over-year rent growth. Nationally, rent increased 2.7 percent.

“Greenville is following a more extreme version of the national seasonal trends — with rent growth in the spring and rent decreases in the fall,” said Sydney Bennet, senior research associate at Apartment List. “The new supply of apartments is likely driving the decrease in rent prices, a trend seen in many national markets as well.”

Greenville ranked as the fourth-fastest-growing city in the country in a U.S. Census Bureau report, growing by 5.8 percent in 2016.

And the city’s number of apartments has been growing faster than the population. According to Real Data, there are 1,993 units under construction and 3,093 units proposed in the overall Greenville area, with developers most active in the downtown submarket.

High demand over the past six months brought the Greenville-Spartanburg area’s apartment occupancy rate to 92.1 percent, the December Real Data report said. Real Data said the occupancy rate would likely remain unchanged in 2018 as demand comes in-line with supply growth. It also expects rental rates to increase 1 percent to 2 percent over the next year.

“New construction causing rent decreases doesn’t necessarily mean apartments are overbuilt,” Bennet said. “It could just be a market correction for pent-up demand and rent increase in previous years.”

“New construction causing rent decreases doesn’t necessarily mean apartments are overbuilt,” Bennet said. “It could just be a market correction for pent-up demand and rent increase in previous years.”

Greenville rent prices are up 12.8 percent since the start of 2014, she added.

Greenville has seen a 5.7 percent increase in its share of high-income renters, defined as those earning more than $100,000 per year, and a 5.1 percent decrease in its share of low-income renters.

“The increase in high-income renters and decrease in low-income renters can indicate gentrification, especially in pricey areas, but gentrification isn’t the only cause,” Bennet said. “One major reason for the increase in high-income renters is the tight market for starter homes and falling homeownership rate. Wealthier renters may still find homeownership out of reach, thus remaining in the rental market longer.”

 

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