Nashville real estate boom sends prices up, builders scrambling
Detached houses on a large housing development on the western side of Nashville, Tennessee.
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Nashville natives say they barely recognize the city’s skyline anymore, and they probably won’t anytime soon, as cranes still litter the picture.
The Nashville building boom is in full effect despite higher interest rates, higher home prices and a weaker national economy.
It began well before the pandemic-induced mass migration from big cities to smaller, more affordable ones. During the Great Recession after the 2008 financial crisis, workers were looking for an urban vibe but with cheaper housing. At the time, that was Nashville.
“We’ve had a big, big change coming out of 2008, 2009. We had this huge boom that kind of went through in Nashville that kind of phased in and maintained a steady momentum up to really the last three years,” said John Eldridge, CEO of E3 Construction Services, a homebuilding company that operates in the area.
Eldridge began building in Nashville in 2008, just as most national builders had gone underground, smarting from one of the worst housing crashes in history. In just a few years, the Nashville market suddenly took off due to an influx of buyers from the coasts looking for cheaper housing.
Single-family home construction permits jumped nearly 25% in 2015 from the year before, three times the growth rate nationally, according to John Burns Research and Consulting. Eldridge told CNBC he’s still just trying to keep up.
“We don’t currently have any houses that are built, completed, that are for sale, that haven’t been sold,” Eldridge said.
High-rises and high prices
Housing demand in Nashville pulled back some during the first years of the Covid-19 pandemic, but the city ranked in the top 10 for homebuyers looking to relocate to a new metro area in October, with people most commonly moving in from Los Angeles, according to a recent report from Redfin, a national real estate brokerage.
“It’s not just economics. It’s our climate here, it’s our four distinct seasons, it’s our culture here, it’s our location. I mean, we’re within 500 miles of about two-thirds of the population of the United States,” said Eldridge.
But growth has come with growing pains. After the gold rush, housing has become less and less affordable.
Special education teacher Madison Cartularo, a native New Yorker, moved to Nashville after graduating from college a few years ago.
“Even in the last two years, since I’ve moved here, rent is going up,” she said.
Cartularo was enticed by the strong public school system and the small city feel.
“I knew that after graduating that I wanted something bigger and something more livelier, especially being in my early 20s. I knew that I would want something with a lot of other younger people and a livelier nightlife scene, and I knew that Nashville would offer that to me,” she said.
On a teacher’s budget, she was also looking for something more affordable. That didn’t exactly happen.
After first living…
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