average rent
average occupancy rate
ytd sales volume
YoY rent change
yoy occupancy change
individual transactions
QUARTERLY DEMAND
YTD: 4,816
QUARTERLY COMPLETIONS
YTD: 6,259
Average Monthly Mortgage Payment
Average Monthly Rent
With an overall occupancy rate of 94.3% in 2Q 2023, Nashville’s apartment market noted a decline of 250 basis points compared to the previous year. When looking at product classes, Class C assets were at the forefront, reaching 95.0% occupancy, with Class B and Class A following closely at 94.1% and 93.8%, respectively.
Examining the submarket level, Sumner County and Murfreesboro/Smyrna fared well, both posting 2nd quarter occupancy rates exceeding 95.0%. In contrast, East Nashville and Southeast Nashville reported the weakest rates, hovering at 93.0% and 93.1%. Looking forward, Nashville’s robust construction pipeline may cause some short-term shifts in occupancy. However, Nashville’s apartment market is anticipated to sustain an occupancy rate close to 94% in the coming year.
In the year-ending 2nd quarter of 2023, the Nashville multifamily market experienced modest overall rent growth of 1.1%, bolstered by a 0.9% increase from the previous quarter to recover from earlier quarterly rent reductions. Among submarkets, North Nashville led the way with strong 4.7% year-over-year growth, while Central Nashville and East Nashville lagged, with declines of -1.3% and -0.2%, respectively. Overall, average rents reached $1,852 per month.
Among the different product classes, Class C units exhibited the strongest rent growth with a 2.0% annual increase, followed by Class B units at 1.4%. Class A units, however, experienced a negligible change, showing a slight 0.1% annual decline. Despite this, there remains robust demand for luxury properties, as evidenced by a notable 0.8% quarterly increase in Class A rents during the 2nd quarter.
| Submarket | Average Occupancy | Annual Occupancy Change | Average Monthly Rent | Annual Rent Change |
|---|---|---|---|---|
| Central Nashville | 93.6% | -2.2% | $2,149 | -1.3% |
| East Nashville | 93.0% | -3.1% | $1,500 | -0.2% |
| Franklin/Brentwood | 94.7% | -1.8% | $1,862 | 0.2% |
| Hermitage/Mount Juliet/Lebanon | 94.9% | -2.3% | $1,542 | 1.0% |
| Murfreesboro/Smyrna | 95.1% | -2.4% | $1,506 | 2.7% |
| Nashville-Davidson--Murfreesboro--Franklin, TN | 94.3% | -2.5% | $1,653 | 1.1% |
| North Nashville | 94.7% | -2.6% | $1,462 | 4.7% |
| South Nashville | 93.9% | -2.7% | $1,493 | 00.0% |
| Southeast Nashville | 93.1% | -4.2% | $1,446 | 3.7% |
| Sumner County | 95.1% | -2.1% | $1,516 | 0.8% |
| West Nashville | 94.6% | -2.0% | $1,774 | 2.5% |
| Nashville-Davidson--Murfreesboro--Franklin, TN | 94.3% | -2.5% | $1,653 | 1.1% |
Units Under Construction
Units UC Delivering In the Next 4 Quarters
In the first half of 2023, Nashville’s apartment market experienced a contraction in transaction activity, with data from MSCI Real Capital Analytics revealing a total trade volume of $473.0 million across 14 properties. This represents a significant 71.1% decrease compared to the previous year, yet despite this decline, the transactions saw a notable 4.5% increase in the average price per unit, reaching $256,200, compared to the same period last year. Even with the lower transaction levels, Nashville continues to attract investors, thanks to its relative affordability and robust economic standing, underpinned by high-growth industries that draw a young adult population. The market’s future outlook remains bright, and Nashville’s resilience and growth potential are likely to keep investor interest alive and strong.
* Trailing 4Q average PPU
* Preliminary Data from RCA – Individual transaction $2.5M +
In May 2023, the Nashville area witnessed exceptional job growth, adding a staggering 44,400 jobs compared to the same period in 2022, reflecting a substantial 4.0% increase in employment. Consequently, the unemployment rate reached an impressive 2.7%, well below the national average of 3.4%. Among the various employment sectors, the professional and business services sector experienced the most significant job gains, with an impressive addition of 10,900 positions, representing a substantial 5.6% expansion. Additionally, the Education and health services sector also saw remarkable growth, with a 5.2% expansion and the addition of 8,500 jobs. These positive indicators underscore the region’s robust economic dynamics and promising employment prospects.
May Annual Jobs Created
May 23 Employment growth
May 23 Unemployment rate
3.4% us may rate
| Sector | Change from May 2022 to May 2023 | Percent Change |
|---|---|---|
| Professional and business services | 10,900 | 5.6% |
| Education and health services | 8,500 | 5.2% |
| Leisure and hospitality | 6,100 | 5.0% |
| Trade, transportation, and utilities | 6,000 | 2.7% |
| Government | 3,200 | 2.6% |
| Mining, logging, and construction | 2,800 | 4.9% |
| Manufacturing | 2,200 | 2.6% |
| Other services | 1,700 | 3.7% |
| Financial activities | 1,600 | 2.1% |
| Information | 1,400 | 4.5% |
Nashville’s near-future outlook hinges on its expansive construction activity, with the market’s growing population base has displaying remarkable capacity for absorption of apartment units. As of Q2 2023, a robust 29,200 apartment units were under construction, placing Nashville’s share of relative inventory at 16.3%, the third largest nationally behind Huntsville, AL, and Boise, ID. This surge in development raises questions about the depth of demand, especially at higher price points. Notably, Central Nashville, with 3,728 units slated for completion over the next four quarters, may see near-term supply and demand imbalance. However, the market’s sustained job and population growth in recent years lends confidence to the outlook. The one-year forecast paints an optimistic picture, with demand expected to stabilize fundamentals even amid supply pressures, though some submarkets may experience periodic fluctuations in performance.
