Writer: Jerrica DuBois
2 min read October 2023 — The current ‘housing crunch’ is a conversation being had in metro areas across the country. A lack of available residential inventory has led to skyrocketing prices leaving many living far beyond the recommended 30% of salary being spent on rent. However, Nashville seems to have avoided the brunt of the challenge, as recent numbers tell a different story for the region.
For renters, Nashville’s vacancy rate is the highest it has been in 20 years, hitting double digits at 10.8%. For Downtown Nashville, the vacancy rate skyrockets to 17.5%. Additionally, data from Matthews Real Estate Investment Services indicates the number will continue to rise, as 22,000 units are currently under construction.
“Absolutely they overbuilt for what the need was,” Ethan Flynn, a real estate agent with Recurve said in a statement. “The vacancy is just building and building and building and building, so every single month, there’s more and more vacancy.”
With increased inventory options for renters, owners are now tasked with making their units as attractive as possible. Incentives are the most common methods, with an increased number of apartments offering up to two or three months in free rent. “There’s a lot of opportunity for people to capture deals, and even push back on what they’re being offered, negotiate,” said Flynn.
But where does all of this leave the homebuyer? According to a report released by the Greater Nashville Realtors, the demand for housing is still strong. The inventory challenges seems to have leveled off, as it now sits at 3.4 months. While not quite yet at the 5 month mark that is considered a healthy market, it is a stark improvement from the .5 to 1 month levels reported by some cities in the greater Nashville area back in July 2022. Overall, there was also an increase in active listings at the end of September compared to the same time period last year.
The Greater Nashville Realtors report took a deeper look at a number of housing stats and compared numbers for the third quarter/year to date for 2019, 2022 and 2023. Many of the statistics followed the general pattern of a decrease with a slight bump up in 2022, there were a few variations of note. Overall sales closings for the region went from 31,900 to 31,938 to 25,886 for 2019, 2022, and 2023, respectively. Both condominium and multi-family sales followed that trajectory, reporting an increase between 2019 and 2022 before dropping back down in 2023. Residential and farm/land/lots, however, reported consistent decline throughout the reported time periods.
Although the report cited declines on the inventory side, also with a few exceptions, the real key for the consumer is affordability. The median price for a single-family home at the end of September was $468,410 and $344,995 for a condominium. When compared to the 2019 figures of $318,000 for single family and $236,000 for a condominium, the difference seems quite drastic. However, adding last year’s numbers into the mix adds a bit more perspective. In 2022, the median price for a single family was $475,000 and $335,000. That is only a slight decrease and increase, respectively, from 2022, showing more stability for the homebuyer in today’s market.
“Now is a good opportunity for buyers to take advantage of the current markets to negotiate rate buy-downs from sellers,” Brad Copeland, president of Greater Nashville Realtors said in a statement. “With rising interest rates, some lenders are even offering low-cost to no-cost refinancing options to help buyers get into their future.”
