Nashville facing affordability crisis, real estate adviser warns

It wasn't long ago that Zillow referred to Nashville as having "the hottest housing market in America," with over 100 people moving in daily.

Yet, Music City's vacancy rate is suddenly the highest it's been in 20 years. 

"This is the first time that Nashville has been above the affordability index line," Nashville-based real estate adviser Andy Hunt told Fox News Digital. That, coupled with high prices and the high rates, is leading to what some call an affordability crisis. 

"I think it totally is an issue… It's definitely hard and tragic," Hunt said of the resultant increase in homelessness the city has recently seen.

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In a FOX Nashville survey from earlier this year, 78.7% said they'd noticed the homelessness crisis worsening. Last year, Nashville Mayor John Cooper announced a $50 million investment in combating Nashville’s homeless crisis. In the following months, however, FOX 17 News reported that more and more homeless encampments were popping up around the city.

This seems to be, Hunt explained, at least partly due to the lack of affordable housing pricing people out of the market. 

Despite what RE/MAX has reported as being an astounding 160% increase in Nashville home inventory this year, residents are finding it increasingly difficult to afford Music City's costs.

And many, Hunt says, are turning to Airbnb as a short-term rental alternative.

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"What's happened over the last year alone is there's been a 25% year-over-year increase in total Airbnbs in the area," Hunt told Fox News Digital. "And when you've got an Airbnb, typically, these are well-kept. They're well-maintained. Because the thing about the Airbnb, the short-term rental, is its checks and balance systems. It's like, ‘Hey, did you do a good job as a host and did you do a good job as a guest?’ There are reviews. So that house, that Airbnb house, is probably going to be in pretty good shape. So, when it hits the market as a rental, it can generate more rent revenue and be more desirable to renters, versus maybe a long-term landlord that's had his forever and is maybe not updated in a while."

Renters aren't the only ones finding it difficult to afford the Music City. In September, RE/MAX reported that homes are sitting on the market for 33 days on average, up from the 24-day tenure reported in September of the previous year.

According to Census data, Nashville's median household income in 2021 was $65,565. But according to real estate brokerage Redfin, the average cost of a home there is more than $450,000.

That means almost half of Nashville's population doesn't even clear ten percent of the median home price.

"I think Nashville is aware of the housing issue, which is why we're seeing so many new apartment starts, and hopefully this continues in a positive direction," Hunt said. "You're still seeing billions of dollars of investments [in Nashville]. The latest growth is the River North area where a Texas developer's come in and is really going to change the landscape. And that's going to bring in jobs, that's going to bring in revenue, it can bring in new places to live… And so I think there's growth like that."

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Hunt asserts the current vacancy rate has more to do with an overwhelming amount of inventory, possibly skewing the numbers, than it does with an actual exodus. Hunt went on to laud Nashville's "proximity" and "convenience" as reasons the Music City will continue to see people moving in daily.

"I think we often look at why people move or why people rent and where they go. Obviously, price is a big part of it, but it usually has to do with convenience, it has to do with amenities, and proximity is part of that convenience. So when you look at Nashville, 75% of the U.S. market is within a two-hour flight. Twelve million people live within a three-hour drive."

But some residents wish they didn't have to drive everywhere.

"This is definitely not a walkable city," said Nashville resident, Christina Giaquinto. "I will say if you live downtown, where I live… if you live downtown, you live in the Gulch and you work remotely, and you don't really need to get to other places, you can borderline do it. I mean, I didn't have a car for over a year and I somehow survived. So if you're going to confine yourself to downtown, and you're just going to work from home, you could walk to coffee shops and boutiques and things like that, restaurants, there are plenty of those cafés."

"But, why I got a car was because I started to feel very, very confined. Almost like a prison. There was no room to explore. So if you want to go to East Nashville, Germantown, you cannot walk that. You know, that's like an hour and a half walk, but it's only a five-minute drive. There are so many beautiful places to see. There's Franklin, there's Brentwood, that's about an hour away. There are beautiful waterfalls and hiking trails. There are all of these places to see and that you can't do without a car. So if you're a true homebody, and you're just going to stay there, you can make it work. But if you want to go anywhere else, I mean, you need a car."

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Giaquinto told Fox News Digital she's recently noticed an increase in homelessness in the areas surrounding her Broadway apartment building, echoing other residents' concerns - including some of her fellow tenants who she described as being "ready to leave" Nashville because of it. 

She also commented on the growing cost required to live in Nashville.

"I'm originally from [New] Jersey and people always say, ‘That must be great. It’s so much cheaper down there.' And I always look at them like, ‘Oh, you think so?’ In my opinion, it's more expensive here in Nashville than it is in New Jersey. And that's crazy."

"I mean, the rent is no different than in the Jersey tri-state area. If anything, it might be more down here, to be honest. And it just keeps going up and up, because there's just so many people that are moving here," Giaquinto explained. "The city is growing, but there is a part of me that kind of wonders if the infrastructure can support it. I've seen a huge difference from last year to this year. I've even noticed a difference in just the last two months. And that's no joke. In two months, I have seen the city, the traffic… People are comparing the traffic now to L.A."

In the end, both Hunt and Giaquinto are hopeful the city is working to combat the current issues plaguing Nashville, in no small part to "preserve" its "essence."

"The city will keep growing, and it keeps evolving. There was a moment when New York City became New York City – that is exactly the moment that is happening right here in Nashville," Giaquinto said, noting Nashville's growing pain as being necessary. "We are within - and I use that word strongly – we are within the precipice of growth as it's becoming what it was always meant to be. Nashville is becoming the true city of Nashville."

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"I think everybody, every city, every business has growing pains," Hunt said, echoing sentiments. "But I genuinely feel like Nashville is trying to do the right thing. The second-biggest industry [here] is tourism. It's like… let's be mindful of keeping our city clean, keeping our city fun, but also allowing people to get to the city, to have the fun and the experience and the clean air, and enjoy their time here."

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