Nashville is one of the hottest real estate markets in the country today. The Nashville real estate boom began about 10 years ago and the investors expect these trends to continue in 2020 and foreseeable future, making Nashville one of the most desirable housing markets in the country. The Nashville real estate market is currently warm because of high demand, but that isn’t quite reason enough to invest in this market.
There are a number of long term trends that make the Nashville market a good place to invest in real estate without any fear of boom and bust like what hit Arizona during the Great Recession. This year, Nashville comes in at No. 4 in the country for expected activity and price appreciation, in comparison to 25 large markets around the country, according to a survey published by Zillow.
In fact, Nashville was the only market analyzed in which no panelists said they expected home values to fall in 2020. The home values (nationally) are expected to grow by 2.8% in 2020. 59% of panelists expect Nashville home values to appreciate faster than their expected national rate of 2.8%. 31% of panelists expect Nashville home prices to appreciate slower than they do nationally while 10% of panelists expect them to grow about the same as they do nationally.
Nashville, Tennessee is famous for the Grand Ole Opry, the recreation of the Parthenon, and country music. It is best known as a tourist attraction in middle America. Nashville itself is home to just over six hundred thousand people. That alone makes it the 24th most populous city in the country. If you count semi-independent parts of Davidson County , then the Nashville real estate market is home to about 700,000 people. The Nashville metropolitan area contains more than two million people. Many of those live in Davidson and Murfreesboro.
The Nashville housing market has been good for sellers in the past years due to the rising prices, and it is considered one of the hottest housing markets in the U.S. One of the goals of investing in real estate is to get a positive return on the investment when the investor decides to sell the property in the future. If the appreciation rate is high enough, the extra value of the house in a few years will offset the upfront costs of buying.
If the appreciation rate is too low then it won’t. The home prices are expected to flatten nationwide, increasing by just 0.8%, according to Realtor.com. Nashville properties have a track record of being one of the best long term real estate investments in the U.S. In Nashville, the real estate appreciation rate in the latest quarter was around 1.2% which equates to an annual appreciation rate of roughly between 4.5% to 5%. Even small changes in the appreciation rate can change the long-term value of buying considerably. For sellers, a nice profit is on the horizon.
If you’re thinking about selling your property in Nashville, now is a great time to make your move. You’ll likely earn the greatest return on your investment by selling now before the prices may start to normalize next year. In 2020, it is expected that the Nashville real estate market will continue in favor of sellers as the inventory has started to decrease slowly. The property appreciation rate in Nashville, which was quite high for the past few years, is continuing to favor sellers. Let’s learn more about the factors that make Nashville a good place to invest if you’re considering real estate investment.
Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control. Please note that there are many variables that can potentially impact the value of a home in Nashville (or any other market) and some of these variables are impossible to predict in advance. In this article, our focus will be on the current state of the Nashville real estate market and how it can affect the investors and home buyers.
Nashville Real Estate Market Forecast 2020 – 2021
What are the Nashville real estate market predictions for 2020? Let us look at the price trends recorded by Zillow over the past few years. Nashville has a record of being one of the best long term real estate investments in the U.S. Since 2015, the median home prices in Nashville have appreciated by roughly 54.34% from $186,000 to $287,076, according to Zillow’s index.
In the past year, the Nashville real estate appreciated by 4.5%. The latest Nashville real estate market forecast is that the home prices will continue to increase by 5.8% – in the next twelve months. The latest real estate data from Zillow shows that the current median home value in Nashville is $287,076. Nashville is currently a warm seller’s real estate market. The demand is exceeding the supply, giving sellers an advantage over buyers in price negotiations. In other words, there are less homes for sale than there are buyers in the marketplace. Zillow reports that 10.3% of the listings in Nashville had a price cut in Jan 2020.
Here is the Nashville, TN real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 5.8% till Feb 2021.
Nashville Housing Market Forecast 2021
Here is a short and crisp Nashville housing market forecast for the 3 years ending with the 3rd Quarter of 2021. The accuracy of this forecast for Nashville is 83% and it is predicting a positive trend. The LittleBigHomes.com estimates that the probability for rising home prices in Nashville is 83% during this period. If this price forecast is correct, the Nashville home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the Nashville Housing Market Forecast.
Nashville Real Estate Market Trends
Analyzing real estate data from multiple sources gives us a much broader perspective of the direction in which a market is moving. We shall now discuss some of the most recent housing trends in the Nashville area from multiple sources and compare it with past couple of years. We shall mainly discuss about median home prices, inventory, economy, growth and neighborhoods, which will help you understand the way the local real estate market moves in this region.
Nashville is a minimally walkable city in Davidson County with a population of approximately 601,201 people. In the past ten years, the annual real estate appreciation rate has amounted to 5.84% in Nashville, according to NeighborhoodScout.com. High demand and low inventory is leading to the rise in home prices in Nashville. Currently, the inventory remains low and the prices will continue to rise for the next twelve months.
On average, homes in Nashville, TN sell after 52 days on the market. The trend for median days on market in Nashville has gone down since last month, and slightly down since last year. In a healthy, balanced market, it would take about six months for the supply to dwindle to zero. In terms of months of supply, the Nashville market can tip to favor buyers if the supply increases to more than six months of inventory. However, looking at the current trends, we don’t see things stopping anytime soon. The inventory will decrease further and there may be an increase of 4 to 5 percent in home prices.
Following the housing market decline in 2007, single family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate. Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units. With 2020 being, theoretically, in the middle of a boom, there’s still 4 years for residential construction to surge. Most likely, a housing shortage will remain in 2020, keeping home prices high.
According to Neighborhoodscout.com, a real estate data provider, one and two bedroom Single-family detached homes the most common housing units in Nashville. Other types of housing that are prevalent in Nashville include large apartment complexes, duplexes, row houses and homes converted to apartments. The median house price in Nashville is $246,321, which indicates that home prices in Nashville are above the national average for all cities and towns in the United States.
Here is a snapshot that shows the median home values in the some of the popular neighborhoods in or around Nashville.
Nashville Real Estate Inventory And Sales Data
Nashville has a mixture of owner-occupied and renter-occupied housing units. In the past month, 1008 homes have been sold in Nashville on Redfin.com, a national real estate brokerage. Additionally, there were also 422 condos, 532 townhouses, and 8 multi-family units for sale in Nashville last month. The median listing price is around $350,000. The average sale price of a home in Nashville was $314,000 last month, up 12.3% since last year. The average sale price per square foot in Nashville is $190, up 9.2% since last year.
According their statistics, the Nashville housing market is moderately competitive. Homes sell for about 2% below list price and go pending in around 56 days. A hot listing in the market can sell for around list price and go pending in around 29 days.
Trulia has currently 3049 resale and new homes for sale in Nashville, TN, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The median sales price of homes in Nashville is $329,998 and homes are selling for about $216/sqft.
Currently, there are 1996 homes for sale in Nashville on Zillow, an online real estate database company. Additionally, there are 499 homes for rent. Under potential listings, there are about 1 Foreclosed and 267 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
- The median list price per square foot in Nashville is $192, which is higher than the Nashville-Davidson-Murfreesboro-Franklin Metro average of $161.
- The median price of current listings in Nashville is $329,000 while the median price of homes that have been sold is $296,000.
- The median rent price in Nashville is $1,700, which is higher than the Nashville-Davidson-Murfreesboro-Franklin Metro median of $1,650.
There are currently 3021 homes for sale and 1186 homes for rent in Nashville on Realtor.com, a real estate listings website. According to their statistics, the median list price of homes in Nashville, TN was $339,900 in February 2020, trending up 10% year-over-year.
- The median listing price was $339,900.
- The median listing price per square foot was $222.
- The median rent price was $1,790.
The asking price of single family homes in Nashville can start from $129,000 and can go up to $10.9M for a luxury property located in Forest Hills neighborhood. Belle Meade has a median listing price of $998,800, making it the most expensive neighborhood in Nashville. Glencliff is the most affordable neighborhood, with a median listing price of $287,500.
|Homes For Sale||3021|
|Homes For Rent||1186|
|Median Listing Price||$379,900|
|Median Sale Price||–|
|Sale to Asking Price Ratio||–|
|New Construction Houses||527|
|Median Listing Home Price/Sq Ft||$222|
|Home Price Range||$105K to $10.9M|
|Most Expensive Neighborhood||Belle Meade|
|Most Affordable Neighborhood||Glencliff|
Nashville Foreclosures And Bank Owned Homes Statistics 2020
As per the Nashville foreclosure data by Zillow, in Nashville 0.1 homes are foreclosed (per 10,000). This is lower than the Nashville-Davidson–Murfreesboro–Franklin Metro value of 0.2 and also lower than the national value of 1.2. The percent of delinquent mortgages in Nashville is 0.6%, which is lower than the national value of 1.1%. The percent of Nashville homeowners underwater on their mortgage is 5.4%, which is higher than Nashville-Davidson–Murfreesboro–Franklin Metro at 5.1%.
There are currently 66 properties in Nashville, TN that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 1,464. In January 2020, the number of properties that received a foreclosure filing in Nashville, TN was 3% higher than the previous month and 29% higher than the same time last year.
|No. of Foreclosures in Nashville||66 (RealtyTrac)|
|Homes for Sale in Nashville||1464|
|Median List Price||$340,000 (3% drop vs Dec 2018)|
In Nashville, the zip code with the highest foreclosure rate is 37218, where 1 in every 1012 housing units is foreclosed. 37207 zip code has the lowest foreclosure rate, where 1 in every 3874 housing units becomes delinquent.
Should You Invest In The Nashville Real Estate?
Now that you know where Nashville is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Is Nashville a Good Place For Real Estate Investment? Many real estate investors have asked themselves if buying a property in Nashville is good investment? You need to drill deeper into local trends if you want to know what the market holds for the real estate investors and buyers in 2020.
If you are looking to make a profit, you don’t want to buy the most expensive property on the Nashville real estate market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, an investment property in Nashville that you might move into or sell at retirement in the future. Either way, knowing your profit potential and purpose is the first thing to consider.
Let’s take a look at the number of positive things going on in the Nashville real estate market which can help investors who are keen to buy an investment property in this city.
1. A Strong Economy And Job Opportunities
In early 2018, a Quartz article joked that Nashville could give up the nickname Music City and be called Job City. Nashville’s claim to the title was having the lowest unemployment rate of any metropolitan area with more than a million people. Nashville real estate market demand will remain strong as long as people want to move here for work, and unlike some areas, they can actually find it here. The Nashville area economy includes thriving technology, service, education, health, and manufacturing sectors.
Financial enterprises have also discovered the benefits of doing business in Nashville, giving abundant employment prospects to bankers, accountants, and budget analysts. While the tourism industry is thriving, white collar jobs are expanding rapidly, too. Almost anyone with a marketable skill can find a good-paying job in Nashville. This trend is expected to continue for at least the next 10 years, with opportunities especially robust for healthcare, IT, and design/media specialists. Average incomes on the city’s west side are higher than in areas east of downtown.
2. Strong Demographic Trends In Nashville
The average age of Nashville residents is around 33, much younger than the national average of 40. This means the Nashville real estate market contains a larger than average number of young families, and given the strong job market, these adults and their children will contribute to housing demand for years to come.
3. Quality of Life in Nashville Attracts People of All Ages
Nashville was ranked the fastest growing large metropolitan area in the United States in 2017. This is in no small part due to its high rankings in various quality of life surveys such as U.S. News and World Report. That publication ranked Nashville the eleventh best place to live in the country, giving it high marks on desirability and value. It was also ranked 35th in their list of best places to retire.
This means many are choosing to move here because of quality of life whether or not they’re coming for work. Today, Nashville is a hot relocation destination with a thriving economy, continuous population growth, and a diverse, ever-growing services base. Consumers who act aggressively to break into the local real estate market should enjoy both a high quality of life and rising home values for the foreseeable future.
4. Known Redevelopment Opportunities
Redevelopment can be hit and miss, since you can’t be sure a waterfront area or community slated for revitalization actually goes up in value. One benefit of the Nashville housing market is that there is known areas of redevelopment where returns are nearly certain. The area around the future professional sports stadium comes to mind. East Nashville is gentrifying, as well.
5. A Large Student Population
The Nashville housing market presents a prime opportunity for real estate investors who would like to cater to students. This is partially due to the fact it is the capital of the state, and it is partially due to the fact that it is simply the largest city in the state. Local universities include but are not limited to Tennessee State University, Lipscomb University, Belmont University, Aquinas College, Fisk University, and Vanderbilt University.
American Baptist College, Trevecca Nazarene University, Meharry College, Welch College and Nashville State Community College are also located here. If you want to invest in the suburban Nashville housing market, Middle Tennessee State University is located in Murfreesboro. The presence of several colleges and universities, along with both private and public secondary schools, presents rich possibilities to academic professionals.
6. The Tourism Related Rental Market
The Nashville housing market provides two different tourism-related rental markets. One is, of course, renting homes to tourists who are more likely to be families and retired couples than swinging singles. Another possibility is renting to young adults who work in the tourism industry themselves. Just over a third of the market rents, a figure similar to the national average. This means that a sudden decline in tourism isn’t going to hurt the Nashville housing market much. The city is currently arguing over limits for AirBnB rentals for non-residents, but no restriction on this are in place yet or the foreseeable future.
7. Affordable Nashville Real Estate
The median home price in Nashville is around $240,000. You can buy two moderately large single family homes here for the price of a cheap condo in California, and you can buy half a dozen rental properties in the Nashville real estate market for the price of one good house in New York City. Nor will the area see a building boom that causes real estate to go down dramatically in value, since rentals had a vacancy rate of around 4% in 2016. Some new housing stock may come onto the market, but not enough to hurt the value of existing homes.
We’ve touched on the subject of rental market stability. Nashville has high employment rates and low vacancy rates, but none of those numbers are enough to throw the market into overdrive, whether it leads to a glut of supply to meet high demand or a boom-bust cycle. The Nashville Business Journal ranked Nashville the most stable housing market in the state in 2018. The city’s relatively slow permitting process actually slows down construction of new units, keeping home prices stable and high.
9. It Is Landlord Friendly
Tennessee like much of the south is landlord friendly. Landlords in the Nashville real estate market don’t have to have a written lease unless the rental agreement is longer than three years, though that’s always recommended. There is a limited payment grace period. Receipts aren’t required for rent and deposit payments, though again, that would be wise. Interest isn’t due on deposits. You can charge late fees but have to specify them in the lease. The only minor issue is that you have to have a rental license before you can be a landlord.
10. The Good Return on the Investment
Interestingly, the average annual salary is about $46,000, leading many here to rent instead of buy. However, the rental market isn’t so hot that it is guaranteed to collapse. That is why median rent hovers around $900-$1000 a month, providing decent returns to landlords who don’t over leverage but without worrying about a condo boom to cash in on rental demand diminishing profits over the long-term. The fact that rents in the Nashville real estate market are almost $200 per month greater than the Tennessee average is a strong reason to buy real estate here than elsewhere in the state. And know that rental rates for large apartments and condos are even higher – commanding rents in the $1500-2000 range.
Investing in Nashville Real Estate: Advice For New Buyers
Maybe you have done a bit of real estate investing in Nashville, TN but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. Don’t let the country-western touristy image dissuade you from investing in Nashville, TN. There are a number of points in favor of the Nashville real estate market if you are looking for a solid opportunity. One of the best features of the Nashville real estate market is the median property price in the city, which is considered more affordable than most of the other top markets for investing in real estate in the U.S.
Although the Nashville real estate market is expected to move a little more slowly in 2020, which would make things better for buyers, the inventory will remain limited, which means that Nashville will remain among the fastest-moving housing markets in the U.S. Also, as the mortgage rates in Nashville remain at record lows, it makes buying a property more affordable now than it was in the previous years.
A good cash flow from Nashville investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding a good Nashville real estate investment opportunity would be a key to your success. If you invest wisely in the Nashville real estate, you could secure your future.
The three most important factors when buying a real estate anywhere are location, location, and location. Location creates desirability. Desirability brings demand. There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your Nashville investment real estate and you should be able flip it for a lump sum profit.
The neighborhoods in Nashville must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools and shopping malls. Some of the best neighborhoods in Nashville, Tennessee are Green Hills, Inglewood, Urbandale Nations, Nolensville, Joelton, Downtown Nashville, Crieve Hall, Hermitage Estates, Hermitage Hills, Donelson-Hermitage-Old Hickory, Madison, Sylvan Park, Antioch-Priest Lake, Old Hickory Village, West Nashville, Green Hills, East Nashville and Antioch Park.
As with any real estate purchase, act wisely. Evaluate the specifics of the Nashville housing market at the time you intend to purchase. Hiring a local property management company can help in finding tenants for your investment property in Nashville. If it is your first time to invest in Nashville real estate, then you would have to be aware of common beginner’s mistakes. Beginners would usually follow the media, buy a property and wait for its value to increase. This could be risky. Real estate investing requires research. We recommend doing your own research or hiring a real estate investment specialist for guidance.
Other Good Markets To Invest in Real Estate in 2020
Another housing market to go for diversifying your investments is the Austin real estate market. The Austin housing market may be one of the more expensive ones in the state of Texas, but it stands out for its large rental market and high rental rates. It is an excellent place to invest in real estate in the Lone Star State. Homes in Austin are 23% cheaper than the national average. It may be the second most expensive housing market in the state with a median home price of around $350,000, but it is still far cheaper than California or New York. Buy up condos or townhomes, and you’ll be able to see a sizable return on the investment.
Similarly, the Salt Lake City is another great market for investing in real estate for your retirement. The Salt Lake City real estate market is booming because of an ideal combination of business growth triggering in-migration and strong native population growth. Downtown Salt Lake City properties near the Mormon Temple command a premium, but that isn’t the only upscale market in the area. Park City and the northern side of Oakley, too, have properties that cost on average well over a million dollars. As you move up Highway 80 toward Hoytsville and Wanship, properties routinely cost more than a million dollars despite the hour commute to Salt Lake City.
Let Us Help You In Buying Your First Investment Property
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing and interest rates.
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*Remember, caveat emptor still applies when buying a property anywhere. The aim of this article was to educate investors who are keen to invest in Nashville real estate in 2020. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
- Stadium / redevelopment
- Landlord friendly
- Quality of life
- Housing Market Data, Trends & Statistics