When you think of Nashville, you generally think of Music City, Broadway, and honkey-tonks. Unless you’ve been paying close attention over the past few years, you probably wouldn’t think of Nashville as one of the top real estate markets in the US. Believe it or not, Nashville experienced the 6th largest increase in median home price out of the top 100 metros over the past year. It’s also leading the nation in wage growth over the past 5-10 years.
Despite last year’s price surge, Nashville’s median sale price remains reasonable at $468,000, making it one of the best places to buy a home in the US. Here are 4 reasons why:
Nashville’s 23.28% median sales price increase was the 6th largest increase last year among the top 100 metropolitan areas. Now Nashville’s median price of $468,800 ranks 24th highest out of those 100 after hovering between $350K-$360 from 2016-2019.
|Top 10 Metros - YOY Median Price Growth||2020-12-31||2021-12-31||1 YR. % Change|
|Las Vegas, NV||$346,963||$477,667||37.67%|
|Miami-Fort Lauderdale, FL||$401,322||$495,000||23.34%|
|Daytona Beach, FL||$291,577||$357,330||22.55%|
|Boise City, ID||$454,230||$554,933||22.17%|
So what caused such a dramatic price acceleration over the past 2 years in Nashville? According to Brian Copeland, president of the Nashville Association of Realtors, low supply is partially to blame: “Until we can get more new construction units coming out of the ground and a stable flow of sellers listing their existing homes, we will continue in this shortage.”
Music City’s housing market growth can be attributed at least partially to recent population growth in the Volunteer State. Over the past few years, Tennessee has absorbed a wealth of new residents fleeing northeastern states like Massachusetts and New Jersey.
United Van Lines National Mover’s Study has shown that Tennessee tied for the 5th highest inbound move percentage last year out of the lower 48, with 62% of their relocations in Tennessee being inbound moves. That is up from 60% in their 2020 study, which ranked tied for 6th for that year.
|State||Inbound %||Inbound Shipments|
So why has Tennessee attracted so many new residents? Some of these new residents were fleeing the strict COVID lockdowns in northeastern states. Others were freed up by the remote work trend, and were able to take their high northern salaries to lower-priced regions and metros. Similar trends have been noted in Texas, South Carolina, and Florida.
As a result of all these high wage earners moving to Tennessee, Nashville ranks in the top 10 out of the top 100 Metros for wage growth over the past 5 years (+30.00%) and 10 years (+34.22%).
|San Francisco-Oakland-Berkeley, CA||$114,696||$81,552||40.64%|
|San Jose-Sunnyvale-Santa Clara, CA||$130,865||$95,405||37.17%|
|Charleston-North Charleston, SC||$70,505||$53,447||31.92%|
|San Diego-Chula Vista-Carlsbad, CA||$83,985||$64,309||30.60%|
|Boise City, ID||$66,466||$51,024||30.26%|
Considering the fact that wage growth over the past 5 years has kept pace with median home price trends over the same time period (+25.61% over the past 4 years in Nashville), it appears that Nashville’s price boom over the past few years is not a fluke, but is sustainable. If the state continues to attract new residents, there is plenty of room overhead for price growth in Nashville.
One quality of an area that is easy to recognize but hard to quantify is culture, and Nashville has a ton of it. Anyone who's been down Broadway on a Friday night will tell you, the city is a rockin’ good time. Nashville is also home of the Grand Ole Opry and the Country Music Hall of Fame. But beyond the music and barbecue, Nashville offers a ton of great entertainment and culinary options. You could opt for the romantic atmosphere at the Italian restaurant Moto or go with the more laid back vibe at Bakersfield, which serves up some of the best authentic Mexican cuisine in the city. Whether you're on vacation or a local, Nashville provides enough entertainment to keep you busy for a long time.
Zach Parker is the writer of The Real Estate Digital Age, Teaching Realtors the art of Digital Real Estate Marketing at Realty Biz News Real Estate Marketing & Beyond