Is Nashville overbuilding in Multi-Family?

Question

There are thousands of Multi Family units under construction in Nashville. While there is an increasing demand and many companies moving to TN, could there be a future decline in multifamily prices/rent? What about the surrounding areas? Thank you.

Jack Robinson · Answer

According to the Tennessean, over 40,000 people are expected to move to the Nashville area each year. With that much demand, and space being limited for single family homes, the development of multi family units is vital. People will always pay more to live closer to the city, which protects the value of nearly any property build in Davidson County.

Mike Smith · Answer

I'm a single family home builder.  I can guarantee that home prices on single family homes are rising much faster than wages nationwide.  As more and more buyers can't afford to purchase a single family home they will be forced into renting or purchasing multi-family.  We have been drastically under building since 2006.  I feel it will take a decade at least to catch up, and a big part of the catch up will be multifamily.

This graph only goes through 2016, but it shows the dramatic underbuilding:

https://www.trulia.com/researc...

Luka Milicevic · Answer

@Alex Hawk

While it may seem like there are thousands of cranes covering the Nashville skyline, it is not enough.

I can't even tell you how bad of a housing shortage we have here. We are in a full on crisis!

I do believe we will catch up with supply at some point, but honestly right now I feel no end in site.

Adam Wright · Answer

@Alex Hawk I have to concur with @Wayne Woodson. Metro Nashville aerial and density restrictions on floor-area-ratio(FAR) are hindering the immediate growth of downtown going 1-2 miles out. Coming from NYC I'm comparing it to the mecca, however, a ton of opportunity being wasted. Tony G only developer I see truly maximizing opportunity. There will be a decline in rents overall, with certain neighborhoods/pockets seeing increase. When the market corrects, although Nashville will see less impact than most of the country, rents will increase with interests rates rising and landlords seizing their opportunity to capitalize.

Luka Milicevic · Answer

@Mike Smith I've been telling people of the MASSIVE lack of building going on....especially in the single family arena. I don't think you can truly explain how much more housing is needed right now. We are in a full on housing crisis due to lack of new construction. The problem is the "fix" isn't quick by any means. It takes many years to catch up when it comes to new construction.

Wayne Woodson · Answer

Nah if anything I would say we are still underbuilding.

Anthony Phillips · Answer

From the demand for rentals so strong I don't think so but only the market will tell

Is Nashville overbuilding in Multi-Family?

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