Memphis, the second largest city in the U.S. state of Tennessee, is fast becoming one of the top choices for individuals looking to move and settle in another city. Easy rent prices, relatively lower cost of living, great job opportunities at diverse industries, suitable environment for business startups, great outdoor living and recreational opportunities are some of the factors contributing to the influx of new residents in the city.
Moreover, the largest of the moving demographics in the city comprises of young professionals (with or without families) aged under 35. This is little surprise considering that Memphis ranks as the 4th happiest US city vis-à-vis professional life and workplace satisfaction. However, older adults as well as ’empty nesters’ also make up a large percentage of the migrating population in the city and in 2022, this extremely family-friendly city in Tennessee (great schools, quality entertainment and recreational activities, quick outdoor getaways) actually ranked as the 9th happiest US city to live in.
Why Are Renters Moving to Memphis
I. Job Opportunities in Memphis
When it comes to job opportunities, Indeed has ranked Memphis as the 10th best city in the US for job seekers. The city fares favorably especially in areas like job security and growth, salary percentile, diverse and favorable job markets, and more. The average annual salary for all Memphis jobs clocks at the north of $52,000 and according to a recent declaration made by Greater Memphis Chamber, the city currently has 16,000 well-paying vacancies and more than half of these positions pay between $60,000 and $75,000 a year.
And one of the best things about Memphis’ strong economic infrastructure and growth is that the city doesn’t rely primarily on one or two verticals. On the contrary, many different sectors such as logistics, healthcare, manufacturing, leisure & hospitality, education, legal & business services, and more make up the diverse business landscape of the city.
Similarly, Memphis is home to both large corporations as well as thousands of small businesses. While Fortune 500 companies life FedEx, International Paper Co. and AutoZone have their headquarters in Memphis, the city is also ranked as the 7th best US city for business start-ups. Attractive corporate taxes, easy office space affordability, availability of resources, diverse verticals, reasonable labor costs—these are some of the factors that have made Memphis a hotbed for small- to mid-sized businesses. And all this has meant that in terms of job creation, Memphis has far outpaced similar-sized cities such as Raleigh, St. Louis, New Orleans, and others.
And as can be expected, a steady job market has led to a new influx of professionals and entrepreneurs, thereby driving up the demand for rentals.
II. Affordability Factors Attracting Renters
Compared to other major cities like Atlanta or Los Angeles, Memphis residents enjoy a significantly lower cost of living and this (as we’ll see later) without having to compromise on the quality of life. Cost of living in Memphis, TN is 24% lower than the national average. By comparison, cost of living in Atlanta, GA and Los Angeles, CA are 2% and 51% (!) higher than the national average, respectively. And add to this the more or less comparable median household income in these three cities and we can see that Memphis residents enjoy much higher potentials for savings while maintaining a good standard of living.
And since housing costs act as one of the most significant metrics in the cost-of-living calculation, it is no surprise that the rent prices in Memphis are significantly lower than the national average. According to the latest data, average price of a Memphis rental unit is $820 compared to the national average of $1,460.
Here’s a little breakdown of the prices of different types of rental units and homes:
• Studio apartment: average price, $680; national average, $820
• 1-bedroom apartment/home: average price, $760; national average, $920
• 2-bedroom apartment/home: average price, $890; national average, $1,160
• 3-bedroom apartment/home: average price, $1,250; national average, $1,560
III. Quality of Life in Memphis
Memphis also excels when it comes to accessibility to quality education for children of all ages. In fact, this is one of the reasons why families with kids make up a significant percentage of new Memphis residents. Some of the best middle and high school options in Memphis, TN include Memphis Rise Academy, Middle College High School, Central High School and White Station High School. For elementary education, some of the most favorite (and quality) options are Bon Lin Middle School, Rivercrest Elementary School, White Station Elementary School and Campus School.
And as we’ve mentioned already, Memphis is also a great place for outdoor living and adventures. No matter the season, you’ll always have a number of choices—whether we are talking family attractions, going on a bike ride, hitting the links and trails, etc. Some of the most favorite family go-to spots include Shelby Farms Park and Forest, Elvis’ Graceland, and Beale Street Entertainment District. Kayaking or canoeing on the Mississippi, shopping at various Farmer’s Markets, taking mural and public art tours rank among other popular outdoor options.
And finally, Memphis is also quite famous for its year-round festivals that span from food feasts to music feasts and everything in between.
IV. Rental Market Trends in Memphis
Memphis has a current population of about 634,000 and the number of residents living in the metro area stands at 1.3 million. The influx of new residents in the city has driven up the demand for rental properties and renters occupy close to 54% of all housing units in the city. In fact, according to a Realtor.com report, Memphis, TN has become the #1 market in the US where investors are in a constant battle with homebuyers for single-family homes.
This fierce demand and competition has also led to many new housing developments in the Memphis metropolitan area. These new housing developments comprise mostly of single-family homes, but also luxury apartments and townhouses—the latter primarily in up-market neighborhoods like River Oaks, Eads-Fisherville, and others.
V. Conclusion
Easier rent prices, relatively lower cost of living, a burgeoning job market, good quality of life with excellent amenities and opportunities for entertainment & recreation—all these have meant that more and more people are moving to Memphis, TN and making the city their permanent home. And, by the way, did we mention that there is no state income tax in Tennessee, meaning that all Memphis (and Tennessee) residents pay lower taxes on their earnings than people living in other states? (Note however, the state does levy a 7% sales tax as well as a 6% tax on dividends and interest.)
Implications for the city’s growth and development in the future
First of all, we’ve already discussed the healthy and competitive rental market of Memphis—a city where renters or tenants already make up close to 42% of the population. Memphis rental market is also characterized by high tenant occupancy and accordingly, low tenant churn.
Further, it is predicted that the Memphis job market will grow by nearly 35% in the next 10 years. And the increase in jobs will drive up the population and subsequently, the demand for quality rentals. In a year-over-year basis, rents in the city have reportedly increased by 11% and the trend is expected to continue in the future, thus making Memphis a lucrative market for rental investors.
On the other hand, for all new (and potentially new) residents of Memphis, the predicted growth and development of the city means that they can expect the already high quality of life in the city to go up a few notches. This will mean a higher standard of living and possibly, a slight increase in the cost of living. That said, the high income jobs (characteristics of a stable job market) will certainly compensate for that and more.
Call Today: 901-716-8034
