Nashville’s Wave of New Residents Is Outpricing Locals
Americans moving to popular cities are willing to pay upwards of 30% more for homes than local residents, intensifying the issue of affordable housing in the competitive housing markets in the country. A Redfin report found that out-of-towners moving to cities like Nashville have bigger budgets and are driving home prices up — and out of the reach of the local population.
Let’s examine how inbound moves to the Birthplace of Country Music has long-time residents singing the blues:
Nashville Locals Need Help Navigating This Competitive Market
For Nashville residents looking for a home, it’s become difficult to afford the skyrocketing prices. The median price for a home in Nashville is $397,000, which is an 18.5% increase year-over-year (YoY). On top of the higher price per home, locals are finding it hard to compete against out-of-state buyers who are willing to pay over the asking price. According to Redfin, 42.1% of homes sold above the list price, an increase of 16 points YoY.
New Nashville residents had $736,868 on average to spend on homes in 2021, while local residents could scrounge up $573,382 on average, a difference of 28.5%.
Redfin’s Migrants versus Local Homebuyers report credits the rise of remote work as a reason why this gap continues to widen, though it’s also worth noting that many out-of-state buyers are willing to pay over asking price because Nashville home prices are often lower than prices in their state of origin.
“People moving from the West Coast will pay way over asking price without batting an eye. In their eyes, they’re getting a deal,” Hope Geyer, a Redfin agent in Nashville, said in an interview with Bloomberg.com.
“It’s really hard for locals to compete right now, and it can be devastating for first-time buyers who aren’t able to offset high prices by selling a home before they buy a new one.”
Are There Solutions for Nashville’s Affordable Housing Issues?
Sadly, local buyers in the greater Nashville area won’t see any relief soon. Rising mortgage rates will be a catalyst for more competition, as buyers rush to purchase homes and lock in a low rate before they increase. Currently, the median days on market is 34 days, a decrease of 16 days YoY.
While competition is at an all-time high, housing inventory is at an all-time low.
The only real solution to curb Nashville’s rising home prices is more inventory. The city desperately needs to develop more affordable housing, which is a trend throughout the country.
Thankfully, Nashville is working on this issue and plans to develop more apartments and homes. Back in June 2021, Nashville ranked sixth in the nation for fastest housing construction. More recently, developers in Nashville began constructing a new apartment complex that would begin to alleviate the city’s affordable housing crisis — but there’s plenty of progress to be made.
The CE Shop readers: Have you noticed an uptick of out-of-town buyers correlating with rising home prices? Tell us about it in the comments down below!