OVERVIEW

The Nashville real estate market continues to be one of the most aggressive and hottest markets in the U.S. Based from WalletHub, Nashville ranks 4th in the list of best real estate markets in the U.S. The ranking considers local economic strength, Real estate market activity and property value growth. With the expected influx of out of state buyers and investors, real estate analysts have deemed that Nashville will continue to grow this 2021.

NO STATE INCOME TAX

Tennessee is also one of the states that does not impose income taxes and does not collect tax on earned income. This particular reason increases the demand on Nashville homes and is a huge factor on why most out of state buyers move to Tennessee.

COMPANIES MOVING TO NASHVILLE

With so many companies creating headquarters as well in Nashville, this provided the area with growth in terms of job security as well as low unemployment rates. This has marked Nashville as one of the top markets last year and with rent growth anticipated to look the same; this solidifies that the area is healthy in terms of investing.

With Nashville in the center of Tennessee and the most populous, it’s no wonder that the convergence of jobs and a healthy pool of workers made the area fit for rentals. Also known as the “Music City”, it is the center of the music industry which boosts tourism and transportation. Financial services, healthcare and education also play a key role in attracting not only out of state investors but young families as well.

One of the key factors of the growing real estate market of Nashville is the continuous surge of people flocking in. Whether it is for job purposes or just simply having a peaceful lifestyle, it is most likely going to increase the population count by roughly 50% by 2045 if this trend continues.

Stats:

• Nashville is the capital of Tennessee and is the most populated city in the state

• Nashville’s total population as per areavibes.com is around 643,771

• It is expected that the Nashville population is going to grow by over 500k in 20 years.

• Its median age is averaging at 34 while the entire Tennessee state is at 38.5

• 83% of the populace speaks English

• Median household income is at $70,262. Per capita is $37,696

Employment growth in Nashville is 0.65% year over year. Being the capital of Tennessee, Nashville has always been its growth center; with Amazon adding up to 5000 new jobs at their Nashville hub. Construction, transportation, professional, business and financial services are some of the most active and fastest growing sectors in terms of job in Nashville.

• According to the Federal Reserve Bank of St. Louis, the GDP of Nashville-

Davidson-Murfreesboro-Franklin MSA is nearly $138 billion and has grown 71% over the past ten years.

• Nashville Post reports the area GDP grew by more than 6% in 2018, more than double the growth rate of the entire U.S.

• Nashville has also seen growth in jobs at 26% over the last 10 years

• Unemployment rate in Nashville is 6.1% as of October 2020, according to the BLS.

• Target industries in Nashville include health care, music and entertainment, advanced manufacturing, corporate operations, and supply chain management.

• Some of the companies with corporate headquarters in Nashville are Bridgestone Americas, HCA Healthcare, Ryman Hospitality Properties and Dollar General.

• Some of the top employers in the Nashville area are Nissan North America,

Vanderbilt University Medical Center, Trane Company and Amazon.

• 90% of the population in Nashville holds a high school degree or higher and 38% hold a bachelor’s or advanced degree.

With key points on population and jobs mentioned above, there is no surprise that Nashville is one of the hottest markets in Real Estate in the US. We have noted that Nashville ranks as the 4th best real estate market above. The report was based from the same criteria real estate market investors are looking for using 300 cities with the same metrics.

Forecast 2021

Based on Zillow, Nashville is held in high regard in terms of being one of the best places for long term real estate investments in the U.S. Nashville home values have appreciated from $155,000 to $298,0339; a 92% increase.

Based on low inventories and high demand, buyers tend to outbid themselves which results in a higher price for the homes they are competing for. This leads to either decrease of inventory and quicker days of selling which can be considered as a “seller’s market”. In Neighborhoodscout.com, their study shows that Nashville real estate appreciated at 85% over the past 10 years. The annual appreciation rate is averaging close to 6% making

Nashville in the top 10% in real estate appreciation in the nation.

Just comparing January of last year to 2021, we would see based on actual sales prices on Realtracs on all single family homes that the average sales price was $330,301 while this year, January finished with an average sales price of $361,280. That is a 9% increase in sales price within just one year. There are lots of land for development in Nashville that are beside new developments too which will further increase the price, may it be land or built property.

Nashville MSA Real Estate Appreciation Trends

Nashville has one of the longest track records when it comes to long term real estate investments in the U.S. for the past 10 years. Please see the table below for historical change in home prices in Nashville.

The Nashville home price index has increased for the last 25 consecutive quarters according to LittleBigHomes up to the 3rd Quarter in 2018. The highest annual change in home value in the Nashville market was 13% in the twelve months ended in the 1st Quarter of 1982.

The worst annual change in home value however was during 2010 when it was in the all-time low -5%. The Highest growth over a three year period was 33% in three years ended in 2018, 2nd Quarter. Over the three year period that ended with the 2nd Quarter of 2011, the Nashville market was -9% in terms of performance over a three year period.

Live music is performed throughout the city every night. Nashville has more than 200 recording studios and 5,000 musicians solidifying its moniker as the “Music City”. Access to goods and recreation is out of the question as Nashville also has sports teams, lots of restaurants as well as parks and sights like the Parthenon.

Key Stats:

• Nashville has been ranked by Forbes as the 15th best place for business and careers and 14th for the best place in terms of job growth. Education has also been mentioned as top-notch.

• As it is known for having lots of art and entertainment, it has been deemed as one of the most desirable cities to live in as per U.S News and World Report.

• Young people are attracted in moving to Nashville not just because of the entertainment but job security as well.

• Vanderbilt University Medical Center and St. Thomas West Hospital are ranked as two of the best healthcare facilities in Nashville.

• Pro sports teams in Nashville include the NFL Tennessee Titans, NHL Nashville Predators, and Nashville FC MLS Soccer team.

Here are more things to consider in investing in Nashville:

Strong Economy and Job Opportunities

Nashville had the lowest unemployment rate in 2018 of any metropolitan area with only just over a million people. This is one of Nashville’s strengths as the market will remain strong since the demand for homes due to people wanting to work in the area are both high.There has been lots of development in Nashville concerning technology, education, health and manufacturing sectors. Because of these as well as continuous building of well known industries and corporations in the area, jobs and careers in these fields require manpower and attract even out of state personnel hoping to land the jobs they want. Though the west side of the city’s average income is somewhat higher than the east side, most jobs presented in Nashville are good-paying jobs and anyone, even with minimal skill sets can still get work here.

Nashville’s solid demographic trends

The national age average is 40 years old wherein Nashville residents are around 33. This means that most families in Nashville are young and with a strong market for jobs, the housing demand will only rise as these young adults will contribute to its growth.

Great life quality attracts people from all age brackets

The strong points of Nashville is its desirability and value. With so many job opportunities, young people tend to move in and due to the great quality of life, older people enjoy the city. U.S. News ranked Nashville as the 17th best place to live in America in 2020-2021 while 12th on the best places to retire and 23rd in fastest growing places. Nashville offers a lot of recreation as well being the music city and all also lots of architecture, events and unique museums to see.

Known Redevelopment Opportunities

Though knowing for a fact if an area for redevelopment will go up or down in value, there are a lot of areas in Nashville that have recorded good ROIs.

Large Student Population

Nashville, being the capital of the state provides lots of opportunities for investors who would like to cater to students. There are lots of educational institutions and universities in Nashville like Tennessee State University, Belmont University, Aquinas College, etc…

Rentals for Tourists

We have stated earlier that many tourists gather to see Nashville for the sights and the culture. Jobs on tourism also are on the rise and they need to have lodging in order to stay close to their work. May it be a large family or a few people that are looking for a place to stay mid-long term, investing for this reason is not a bad idea.

Affordability

Nashville is one of the top cities to be in when it comes to affordability. Prices for homes are not too high however, the low inventory is a factor you need to consider. In comparison, cheap units in California and New York most likely will let you buy at least 2 single family homes in Nashville. There is also news that starting Jan of 2021, the Hall income tax will be eliminated in the state of Tennessee. If this is the case, the state is on its way to become a no income tax state.

Stability

Going back to the rental market stability, Nashville has high employment rates with low inventory in the housing market though there was never a shortage of available units or homes that a person can rent or purchase. The metro Davidson permitting process is also helping in a way of studying and making sure that permits do not just fly out the counter ensuring no overdevelopment of new construction homes keeping the prices and the supply stable.

Hassle Free for Landlords and Owners

Landlords in Nashville do not need written leases unless the rental of the apartment or unit is more than three years. It is safer to have written lease agreements, though. Receipts aren’t also required for deposits and payments but it is still better to have it. You need to have a rental license to be a landlord, however.

Awesome Return of Investment

According to Payscale.com, the average annual salary is around $60,000. This is the reason why people are more comfortable renting instead of buying. 46% of households in Nashville are rented while 53% are owner occupied as of RENTCafe. Most single family homes that are bought by developers have been converted into rental units since 2010.

The average rent in Nashville is also $200 higher than the whole of Tennessee which proves that it is a good place to invest in. Rentals for even larger properties like condos are around $1500. The average rent collectively for Nashville is $1396 which shows a 4% decrease from rates last year. Amerikey Realty deals with most neighborhoods in Nashville and can guide you to the best deals Nashville has to offer. Some of the neighborhoods we cater to are Bellevue, Sylvan Heights and Park, The Nations, 12 South, East Nashville and more.