Cranes, apartments and tall-and-skinnies, oh my!
It’s no surprise that Nashville’s housing market has blown up along with the city’s meteoric rise in popularity. In fact, the Nashville Area Metropolitan Planning Organization estimates that another 1 million people will call Nashville home by 2035.
Recently, Music City topped the charts in a Zillow report as the hottest housing market for 2017, beating out cities like Denver, Portland and Seattle. But will the housing market continue to heat up?
According to local real estate guru Erin Krueger, who leads a team at Synergy Realty Network, January and February are generating the same amount of activity as the traditionally hotter spring and summer months – and that means 2017 could be the busiest year yet.
“Nashville is definitely one of the strongest markets in the country," Krueger said. "Looking from our fourth quarter that we had in 2016 going into 2017, Nashville itself had the strongest fourth quarter it's ever had. Normally in real estate we see some seasonality slowdown. But because it was so strong over previous years, that just shows that 2017 is going to be an extremely productive year for Nashville and surrounding areas.”
Krueger, one of the state's most active real estate agents, says she began to see the market warm up about three years ago. But she has always seen Nashville as an extremely healthy market. Even through the recession, she remembers that Nashville held steadier than many other cities.
And it’s the first-time buyers who will continue to keep Nashville’s market steady on the top of the charts. Krueger says that the sweet spot is that price point sub $300,000 that will drive the market and remain the most competitive for those looking to buy anywhere in the Nashville area.
“Just about any area is pretty hot right now," Wilson said. "If you're in an area that's $300,000 or lower, there's such a high demand because that's really the first-time homebuyer price point and there's just not a lot of it.”
Buyers encounter challenges
First-time homebuyer Melisa Grove experienced the difficulty in finding something in this starting home price-point. She told Crain's Nashville it was rising rent prices that caused her to pull the trigger and buy.
"Our mortgage will be a few hundred dollars less than what we were paying in rent for a one-bedroom apartment," she admitted.
After losing three houses in bidding wars, however, Grove became discouraged before finally snagging a house in Crieve Hall
One challenge has become lack of inventory as so many seek to grab a slice of Nashville’s real estate pie. This leads to the bidding wars Grove experienced. However, Wilson remains hopeful that warmer spring weather will boost inventory – but even that won’t be enough to keep up with everyone relocation activity.
“This [inventory problem] will continue to probably happen throughout 2017, and it's just because the amount of people moving to Nashville on a daily basis is huge.”
While Krueger confirms the short supply, she says the appraisal process has been the biggest challenge for one of the nation’s hottest market.
“Buyers want to put their best foot forward because there are multiple offers," she said. "The appraisal then comes back lower, and the buyer and seller have to make a decision.”
And for those who can’t land a house or wish to live in the city, there are thousands of new apartments to consider.
“It's going to be interesting to watch all of these thousands of apartments that have been built over the past three years and see how those absorb into the marketplace, and what that does to rent prices,” Wilson said.