So it appears that Middle Tennessee's residential real estate sector has purged from its system almost all the bad loans and foreclosures it could. New data from CoreLogic shows that the region's home loan delinquency and foreclosures rates — which were still dropping steadily this spring — have bottomed out. They're not moving back up yet — and given the steady growth of the region, that may not happen soon — but the positive momentum has clearly petered out.
Nashville-area homeowners took out almost 8,400 home equity lines of credit in the fiscal year ended June 30, according to research firm RealtyTrac. That was up 16 percent from the year before, a growth number that trails the national average by about four points. But that may change in the coming year: HELOCs accounted for 21.5 percent of all Middle Tennessee loan originations in the first half of 2014, six points more than the U.S. average. Here's RealtyTrac's release highlighting national stats, including one that shows we're still far, far from the froth of 2006.
About this time last year, a number of real estate research firms began saying Nashville-area homeowners should expect only small 2014 increases in the prices of their homes. Through early summer, the market stiff-armed those predictions, but the latest numbers from CoreLogic suggest the big gains could indeed be coming to an end soon. In August, CoreLogic's team says, area home prices rose 7.3 percent year over year when including distressed sales and 6.0 percent when distressed deals were not factored. Those numbers were down from 8.1 percent and 7.1 percent, respectively, from July.
Research firm Axiometrics says the Nashville apartment market continues to be among the best performers in the country, with a vacancy rate of just 4 percent and effective rent growth of 4.7 percent in the third quarter. That's down a bit from the numbers of the second quarter, but it's still well ahead of the national average. In addition, the seasonal drop was not as major as that of the U.S. market as a whole.
While effective rent growth for the third quarter was lower than the 2.7% rate measured in Q2, the decrease between the second (2.7%) and third quarters (1.6%) is typical for the seasons, Denton said. Axiometrics' historical data shows that the second quarter is usually the best of the year and that rent growth moderates after June.
Putting a lot of stock in a Freddie Mac index tracking the nation's housing markets would have you growing concerned about Middle Tennessee. In July, Nashville's MiMi score was 76.6, down from 78.2 in the month before that, primarily because its employment metrics were weakening this summer. The city now ranks 13th instead of ninth, and its three-month retreat is more than triple that of the country as a whole.
Middle Tennessee ranks ninth on Zillow's latest list of sellers’ housing markets. The Zillow team expects Nashville-area home prices to rise 2.6 percent over the next 12 months — double its forecast from this spring. The research firm also has broken down where within our market both buyers and sellers can find the best deals. Zillow identifies the top buyers’ markets as those where homes stay on the market longer, see more price cuts and are sold for less relative to their listing prices. The opposite is true for the best sellers' markets.
Much of the power behind Nashville's development boom these days — think apartments, restaurants and various maker ventures — is coming from the inflow of millennials, those eager-to-spend city-dwelling residents born between the early 1980s and mid-1990s. By now, we've all heard stories about young talent moving here without a job offer or other connections, eager to be a part of (and contribute to) the Music City buzz.
Now, researchers at RealtyTrac have assembled some numbers on the migration patterns of that coveted demographic segment, and it turns out Nashville is indeed one of the top destinations in the country. Between 2007 and 2013, the number of millennials in Davidson ballooned by 37 percent. (Clarksville's number grew even faster but we're thinking that has a lot to do with servicewomen and men returning from the Middle East.) Rutherford County also posted double-digit growth during the six years RealtyTrac researched, while Williamson County was the only one in the core, eight-county Nashville MSA to see a drop in the number of millennials.
Here is a map showing the millennial migration for all of Tennessee's counties.
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