NASHVILLE, Tenn. (WKRN) – Rent prices are falling in the Metro Nashville area.
According to Zillow’s latest report, rents in Nashville fell a little over half a percent in the past couple of months. The average rent in Nashville is now about $1,879. Still the typical rent in Metro Nashville was up more than 8% from last year.
Zillow Senior Economist Jeff Tucker explained what’s happening now is a bit of reversion to the mean, after things got a little bit overheated about a year ago. That was the time when the economy was reopening in a big way and there was a lot of migration as well. Many people were moving around the country and a lot of them came to Nashville.
“Nashville stood out as one of the spots that was attracting a lot of people moving; one thing they were drawn to was the cost of living, but also just the high quality of life, and sort of a national reputation as a nice place to live. That made that quality of life, that cost of living look like such a bargain. So that bargain started to go away, you know, it got a little bit loved to death,” said Tucker. “So as rents rose, that helped kind of turn off that faucet of demand of people kind of moving in, rushing into the Nashville area. So what that means in practical terms is landlords started taking longer to fill units seeing more units sit vacant, and that finally took the rent growth off the boil.”
Tucker said this pace of rent decline has been faster in Nashville than the national average. It actually fits in more with some other expensive markets, like New York City or the Bay Area.
“I think it goes to show how Nashville over the last couple of years kind of leaped up to be in the running as one of these major cities that people are moving to and just becoming kind of part of the national conversation. And unfortunately, along with that, also having some affordability challenges that put it in the same league as some of these very large, expensive coastal cities,” said Tucker.
Zillow reported that typical rents in the U.S. fell 0.4% from October to November and it was the largest decline in at least seven years. The country’s typical rent was $2,008 in October, which was up 8.4% from last year. Zillow’s economists said this record decline decisively closed the door on a period of nearly two years of above-average monthly rent increases that began in November 2020.
Tucker explained there were a couple of factors when thinking of how long this decline might last, including the season.
“Just like the for sale housing market, there’s a lot more activity and kind of more competition from other tenants in the spring and summer. So I think by then, by May or June we will see rent growth resume,” said Tucker. “The other factor is that that’s also kind of a national factor is that there’s actually a ton of new multifamily homes under construction at the moment. It’s a record high number, in fact, of homes that have been started in, you know, buildings with five or more units in them.”
Rents are still rising in several U.S. cities on a monthly basis. That includes Louisville, Memphis, Buffalo, Birmingham and Miami.
Tucker said this price decline means it’s a great idea for renters in Nashville to look around at alternatives.
“It does look like for the first time in, you know, several months at least, maybe in about a year, it looks like renters have a bit more negotiating power when it comes to those renewal terms,” said Tucker.