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.
The construction of affordable housing units in Tennessee could be in for a major overhaul if a recent trend in the taxation of such properties takes hold. Developers say assessors have been increasingly adding in federal tax credits when figuring out tax bills, which has made for some nasty surprises and could lead to legislative action in 2015. Bobby Allyn at WPLN has more from a panel discussion last week.
“It’s only been a very, very recent situation,” said low-income property developer Phil Lawson, who sat in on a panel discussion Thursday organized by the Tennessee Advisory Commission on Intergovernmental Relations. “It’s not like people are gonna say ‘OK, I now understand this, so I guess I need to anticipate the fact that I’m creating a project that’s going to lose money every year.’ Developers won’t do it, and investors won’t buy into it and lenders won’t lend on it.”
Officials with home builder Jones Company say they have wrapped up their acquisition of more than 150 acres on which they and peers from Drees Homes will build almost 250 houses ranging from 1,800 to 4,000 square feet. Actual construction on the Summerlyn neighborhood is expected to start later this year.
Cassidy Turley's researchers have tallied the numbers and say Nashville's piping hot apartment market has almost 7,800 units under construction. That puts Music City fifth in the country in terms of the square footage being added as a percentage of total inventory. (See image below.) That's possible in part because the region's vacancy rate is almost two points below its historical 6 percent average. You can see those stats and more on Cassidy Turley's updated Construction Report page.
Nashville-area home prices held their own in July, according to the research team at CoreLogic. Year over year, home prices including distressed sales were up 8.1 percent from July 2013. Taking out distressed sales, prices rose 7.1 percent. Both of those numbers were up slightly from June.
The researchers at MetroStudy say it's a pretty simple case of supply and demand. Even though Nashville-area builders have started work on more new homes this year than in the first half of 2013, there are numerous local submarkets with lot supplies "as low as 14 months." That is pushing up land prices and it won't be long before homebuyers will see their tabs rising, too.
Was that the cyclical peak of our housing market?
An index developed by housing finance agency Freddie Mac says the Nashville metro residential real estate market weakened considerably in June, more than erasing the gains from April and May. (See the graphic below.) Freddie Mac's researchers say the main driver of the drop is the downward change in the ratio between payments and income. The relatively good news: Nashville still ranks ninth in the country and its year-over-year improvement still comfortably outpaces the national average.