The Nashville housing market is one of the most impressive in the U.S. right now. Tight supply, record-high prices, and a strong rental market have home buyers, real estate agents, and investors turning their ears toward Music City.
Let's take a closer look at what’s happening in Nashville, Tennessee, as well as how you can capitalize on these unique opportunities.
High Demand, Low Inventory, and Record Prices
High demand is causing home prices in Nashville to rise at a rapid pace. Not only that, but Nashville is the nation's top city for fastest-selling houses. This can be attributed to three key elements: low interest rates, low inventory, and shifting demographics in larger cities.
In November 2021, the median price for a single-family home in Nashville was $425,000, which is an increase of 21.4% compared to 2020. Likewise, the median cost of a condominium was up 21.7% from 2020 prices.
Experts don’t see these record prices dwindling any time soon, particularly due to low inventory. At the end of 2021, there were 4,732 units for sale, representing a decrease of 23.6% year over year. A healthy, balanced real estate market contains a six-month supply of residential properties. Currently, Nashville has just over a month’s supply of inventory, spelling high competition and bidding wars for buyers.
While the news for buyers may sound dire, the news couldn’t be better for homeowners looking to sell right now. Nashville is the quintessential seller’s market in 2022, with experts expecting this trend to last throughout the year.
Affordability When Compared to Other Major Metro Areas
Thankfully, there’s a silver lining for buyers when it comes to the Nashville housing market. While residential properties are displaying record high prices, the median home price in Nashville remains affordable when compared to other major metropolitan areas. A condominium in Nashville, for example, will set you back just $298,050 on average. This is in comparison to the average condominium prices of $412,000 in California and $876,250 in New York — not to mention the national average condominium price of $305,000.
Unbeatable for Long-Term Real Estate Investments
While Nashville home prices have risen dramatically over the past 12 months, they’re only expected to continue on this trajectory. Property values within the entire Nashville metro area have risen 24.9% over the past year. It's predicted they'll rise a further 19.8% in the next 12 months, too.
Of course, competition is fierce, but investors shouldn’t let that stop them from capitalizing on a great market. PropStream can help you identify off-market properties with motivated sellers so you have a leg up on the competition. In a record-breaking market like Nashville, that advantage is invaluable!
Strong Rental Market
Investors will also be pleased to hear that Music City boasts a strong rental market. Almost half (47%) of the households in Nashville are renter-occupied. At the end of 2021, the median rent for a one-bedroom apartment in Nashville was $1,533. That's a 23% increase compared to the previous year. The monthly average rental price in Nashville is $200 more than the average across the whole of Tennessee.
Investors will want to focus on the following top neighborhoods, which boast the highest average rent in Nashville:
- 8th Avenue South
- Demonbreun Hill
- Elliston Place
- Marathon Village
- The Gulch
- Watkins Park
- Wedgewood - Houston
- West End Park
PropStream’s heat map and estimated value features also identify suburbs or other areas that are up and coming. This allows you to pinpoint the best opportunities within Nashville so you can take advantage of this great market in 2022!
