Nashville Real Estate Market Update - 2024

Over the past decade, Nashville has boomed, attracting businesses, families, and young professionals who want to take advantage of its vibrant culture, thriving job market, and—relative to other major US cities—affordable cost of living. That surge has been making waves, of course, in the real estate market. But what's happening in the Nashville TN real estate market in 2024? Let’s unpack some of the latest trends and what to expect as a buyer or seller, along with some real estate basics on how best to maneuver this dynamic Nashville market. 

Current Market Overview

• Median Sale Price: $480,000 (up 8.0% from the previous year)
• Median Sale Price Per Square Foot: $285 (up 4.4% from the previous year)
• Homes Sold in May 2024: 1,132 (compared to 1,124 in May 2023)
• Days on Market: 48 days on average (compared to 42 days last year)
• Sale-to-List Price Ratio: 98.0%
• Overall Cost of Living: 1% lower than the national average
• Median Home Price Comparison: 9% higher than the national average‍
• Redfin Compete Score: Somewhat competitive, varying by neighborhood
• Nearby Cities: Similar competitive scores, with some areas like Brentwood and Franklin also showing high demand.

The Nashville real estate prices show complex signals: some segments perform solidly, and others likely show a shift in momentum. Median house prices are volatile. The average listing price hit $575,000 as of October 2023, representing 15% year-over-year growth. With trends like this at their back, everyone in the business can readily understand why most think it's a seller's market. But location-specific disparities are critical to account for if a buyer or an investor has eyes on any given neighborhood.

This puts the Downtown Nashville average sale price currently at $450,000—a pretty dramatic drop of 31.8% over last year. Because of this downturn, one might not have to look any further than this highly sought-after area for a more affordable entry point for buyers.

On the other hand, the median sales price of a residence in the overall city indicates that it has been healthy, underpinned by robust demand. This is represented by the current $468,300 price point and further supported by a year-over-year growth rate in the median listing price of 24.9%.

Market Trends and Predictions for 2024

Underlying Market Strength: Most of the fundamentals are indicative of a continued upward trend in Nashville's real estate market. Having held up quite strongly—thanks to job creation and a constant flow of new residents moving into the city—these factors spell an excellent outlook for single-family homes and condos alike.

Price Trends: Some sources suggest it might inch up in 2024; others suggest a minor downslide. Irrespective of the exact direction, bear in mind that the market dynamics often vary significantly at the neighborhood level. So, buyers/investors have to do location-specific research themselves to get a more accurate feel of pricing trends.

Interest Rates and Buyer Behavior: Interest rate outcomes are one of the prominent variables that will affect affordability, and any fluctuations should be considered by buyers and investors alike. Fluctuations in interest rates have a strong impact on purchasing power, affecting market activities as a whole.

Opportunities for Buyers and Investors: The general outlook of the market is expected to remain healthy, notwithstanding the possibility of minor price corrections. Stable economic growth, coupled with population increase in Nashville, underpins the continued demand for housing. This means that astute buyers and investors who have a good eye for undervalued properties can diversify into opportunities.

Nashville housing market trends: Is Nashville in a housing bubble? Although modest in price adjustment, the single-family home and condominium demand should exhibit strong long-term performance. Growth in Nashville, coupled with a deleverage job market and demographic dictating different sets of housing needs, will sustain the demand across all segments.

Neighborhood Analysis

Downtown Nashville: In downtown, there was a big correction due to a plummeting average sale price by 31.8% to $450,000. It can be a saturation with too many high-rise condos or buyer tastes moving to more space and living area. Short-term growth has been muted, but for sure, there could be long-term potential. 

East Nashville: This remains an in-demand neighborhood, with consistent prices moving upwards and a very competitive market. Be prepared for multiple offers on listings and occasional bidding wars.

The Gulch: This has some of the most premium properties within the city, so listing premiums are high. The market is fairly stable here since it has been primarily targeted by high-net-worth buyers. Conversely, long-term appreciation is also likely due to the exclusivity of this neighborhood and barriers to new construction.

Real Estate Investment Opportunities

In today's dynamic market, understanding how to invest in real estate is crucial for making informed decisions and maximizing returns. These are the various investment options within Nashville's thriving real estate market.

Single-family homes: These are a timeless favorite for stable rental income and capital gain opportunities. Areas with strong job growth, combined with low levels of new construction, could be optimally yielding places to be invested in.

Multi-family homes: More specifically, multi-family homes—duplexes, triplexes—throw off a number of rental incomes, but they maintain much less than single-family homes. These make for an excellent investment strategy in real estate for investors who need economies of scale with a hands-off technique.

Fix-and-flip properties: Nashville's revamping in process offers scope for investors with renovation acumen. Locate undervalued homes in up-and-coming neighborhoods, strategize how to renovate them, and resell for a profit. But before jumping into the fray, do factor in renovation costs and market fluctuations.

Nashville-Focused REITs: While no publicly traded REIT operates strictly with a focus on Nashville real estate, some larger REITs have a fair number of the city's properties. You can look into a company with focuses that align most with property types that resonate with your goals for investment.

Infrastructure and Development Projects

The River North Development - It is a transformative project that will revitalize a 60-acre industrial district just north of downtown into a mixed-use space with office buildings, residential units, retail outlets, and green spaces.

Nashville International Airport Expansion - With the multi-billion-dollar expansion underway to increase passenger capacity and entice new airlines, it could be an opportunity for tourism and business travel, impacting hospitality and the short-term rental markets.

WeGo Public Transit Enhancements - Nashville's public transportation system is getting a facelift with new bus rapid transit lines. Improved connectivity can recharge currently underserved areas of the city and enhance values from associated development opportunities.

Music City Center Expansion - The expansion of this Convention Center is for netting conferences and events bigger than what the city currently hosts, which will make Nashville one of the greatest tourist destinations in the world. This simply translates to benefactors for the hotels, short-term rentals, and restaurants near the convention center.

Rental Market Trends

While a non-stop escalation in rental prices dominated Nashville, it reached a point where the market moderated. According to ApartmentData.com by MRI Software, the rental growth rate decreases across the board in the Nashville Metropolitan Statistical Area, which includes Franklin and Murfreesboro. This change in dynamics now gives renters further leverage with regard to negotiating their leases. Average rent pricing hovered around $1,549 late into 2023, and that more gradual upward trajectory would be expected to carry over in 2024.

Many landlords are giving concessions—rent discounts or free move-in specials—to attract tenants. According to ApartmentData, that works out to some kind of concession on about 60% of Class A units and 35% of all units, which comes out to an average discount of 8%. That can be big money to the renters who save it.

The adjustment in today's market can be attributed to a volume of new properties hitting the market, creating more balance between supply and demand. Industry experts believe this trend continues into 2024 across the Sunbelt region.

The Bottom Line

The real estate market in Nashville for 2024 is dynamic. Appreciation in other single-family homes will take the front seats in the developing suburbs, while price corrections are said to happen in areas like Downtown condos. All in all, it is a more balanced environment for buyers, investors, and renters.

The Nashville real estate market continues to evolve and provides phenomenal opportunities for those who are willing to do their due diligence and take calculated steps in the process. It's all about knowing and understanding what you want, the level of risk you will tolerate, and your goals regarding this investment.