Searching for an apartment in Middle Tennessee is not getting any easier. A new study says the Nashville area is the seventh hardest place in the country to find an apartment.
Landlord Sara Beth Geoghegan has recently ticked up rent on some properties she owns in the Woodbine neighborhood in South Nashville. When she has an opening, she’s overwhelmed by the response. Raising rents by $100 a month, she says, is just responding to the market.
“The demand is insane. I thought I would have two to three showings one morning, and I had probably 11 different people looking at one property in one day.”
A study by the Dallas-based firm Axiometrics shows that the Nashville area’s rental market is tighter than places like Portland, San Diego and San Francisco. And rents in Middle Tennessee are rising faster than the national average and more rapidly than places like Austin and Phoenix.
The simple explanation is that people are moving in Nashville faster than apartment builders can build.
And the rising rents are primarily fueled by people moving for new jobs in professional business services and construction. According to Kristine Sutherland with Axiometrics, the number of construction jobs in Middle Tennessee has jumped 11 percent from last year, and in business service sector, there was a 9 percent leap from the year-ago level. “These two sectors are driving job growth higher, making people move into the area, creating more demand,” Sutherland said.
For renters, relief is not expected any time soon. Sutherland said they should expect to pay more and more of their wages in rent.
“From the renters side, it could be concerning that rent growth keeps coming up,” she said. “It could make people concerned about whether they can afford rent in these new apartments. It might push people into lower, more affordable apartments, rather than these new units.”
The market now swings in favor of landlords, Sutherland said, which means renters won’t be as likely to get their way when it comes to negotiating their leases, or pushing for more apartment amenities.
Developers are now addressing the rising demand. According to the report, there are more than 4,800 new apartments expected to be added this year across Middle Tennessee — double the number of units added last year.
Steve Massey, an apartment broker with CBRE, said Nashville still lags behind peer cities like Charlotte and Austin when it comes to available apartments around the city’s core. So, he doesn’t think the new construction happening all over is creating a bubble.
As to whether the Nashville market can maintain this trajectory, Massey said he’s confident the market can handle it — at least for now.
“But a real question is how many more people can pay these rents,” Massey said. “It can’t go on forever.”