average rent
average occupancy rate
ytd sales volume
YoY rent change
yoy occupancy change
individual transactions
QUARTERLY DEMAND
YTD: 7,606
QUARTERLY COMPLETIONS
YTD: 9,147
Average Monthly Mortgage Payment
Average Monthly Rent
* The Average mortgage payment is based off a median home sales price of $403,100 as reported by the National Association of Realtors as of Aug 2023.
In Q3 2023, Nashville’s apartment market recorded an overall occupancy rate of 94.4%, a decline of 140 basis points compared to the same quarter last year. Class C units boasted the highest occupancy at 95.1%, trailed by Class B and Class A units with rates of 94.5% and 93.3%, respectively. At the submarket level, Sumner County and Murfreesboro/Smyrna excelled, each achieving occupancy rates above 95.5% for the quarter. In stark contrast, Southeast Nashville and Central Nashville lagged, with rates falling below 93.0%. While Nashville’s robust construction pipeline could introduce some volatility in occupancy rates in the short term, the market is anticipated to sustain a strong occupancy level, likely hovering around the 95% mark in the coming year.
In Q3 2023, Nashville’s multifamily rental market faced a mild deceleration, recording a -1.9% year-over-year decline in rent growth. Despite this slowdown, submarkets such as Murfreesboro/Smyrna and North Nashville showed resilience with annual growth rates of 1.4% and 0.7%, respectively. Conversely, Central Nashville and East Nashville encountered more significant rent decreases of -5.4% and -5.7%. When examining the market by product class, Class A units saw a notable drop in rents, declining by -3.6% from the previous year. Class B and C units also experienced minor reductions in rent, with changes of -1.2%. Nonetheless, the market retains a strong appetite for luxury units, suggesting a nuanced landscape where certain sectors continue to outperform despite broader market softening. Overall, the average monthly rent stood at $1,645.
| Submarket | Average Occupancy | Annual Occupancy Change | Average Monthly Rent | Annual Rent Change |
|---|---|---|---|---|
| Central Nashville | 94.4% | -1.3% | $2,092 | -5.4% |
| East Nashville | 92.9% | -1.1% | $1,466 | -5.7% |
| Franklin/Brentwood | 95.7% | -0.7% | $1,826 | -2.2% |
| Hermitage/Mount Juliet/Lebanon | 96.1% | -1.1% | $1,538 | -2.0% |
| Murfreesboro/Smyrna | 94.9% | -1.0% | $1,519 | 1.4% |
| North Nashville | 94.4% | -2.0% | $1,463 | 0.7% |
| South Nashville | 92.6% | -2.6% | $1,489 | -3.0% |
| Southeast Nashville | 93.8% | -3.4% | $1,458 | -0.8% |
| Sumner County | 94.6% | -0.4% | $1,553 | 0.3% |
| West Nashville | 93.2% | -1.4% | $1,756 | -0.7% |
| Nashville-Davidson--Murfreesboro--Franklin, TN | 94.4% | -1.4% | $1,645 | -1.9% |
Units Under Construction
Units UC Delivering In the Next 4 Quarters
During the first three quarters of 2023, Nashville’s apartment market witnessed a decline in transaction activity. According to data from MSCI Real Capital Analytics, there was a total trade volume of $726.3 million spread across 20 properties, marking a significant 65.7% decrease compared to the previous year. Despite this drop in transaction volume, there was a notable 3.2% increase in the average price per unit, which reached $259,900, as compared to the same period in the previous year. This data indicates that Nashville remains an attractive destination for investors due to its relative affordability and strong economic foundation, driven by high-growth industries that attract a youthful population. The market’s future prospects continue to be promising, and Nashville’s resilience and growth potential are expected to maintain robust investor interest.
*Most Active Buyers and Sellers are based on the sale volume of apartment units.
* Trailing 4Q average PPU
* Preliminary Data from RCA – Individual transaction $2.5M +
In August 2023, the Nashville area witnessed exceptional job growth, adding a staggering 34,600 jobs compared to the same period in 2022, reflecting a substantial 3.1% increase in employment. Consequently, the unemployment rate reached an impressive 2.7%, well below the national average of 3.9%. Among the various employment sectors, the professional and business services sector experienced the most significant job gains, with an impressive addition of 9,900 positions, representing a substantial 5.0% expansion. Additionally, the Education and health services sector also saw remarkable growth, with a 4.0% expansion and the addition of 6,600 jobs. These positive indicators underscore the region’s robust economic dynamics and promising employment prospects.
August Annual Jobs Created
August 2023 Employment growth
August 2023 Unemployment rate
3.9% us August rate
| Sector | Change from August 2022 to August 2023 | Percent Change |
|---|---|---|
| Professional and business services | 9,900 | 5.0% |
| Education and health services | 6,600 | 4.0% |
| Trade, transportation, and utilities | 6,400 | 2.9% |
| Government | 3,300 | 2.8% |
| Leisure and hospitality | 2,700 | 2.1% |
| Manufacturing | 2,600 | 3.0% |
| Financial activities | 1,600 | 2.1% |
| Other services | 1,300 | 2.8% |
| Mining, logging, and construction | 400 | 0.7% |
| Information | (200) | -0.6% |
Nashville, Tennessee, exudes the charm of a quintessential Southern city, offering a harmonious blend of diverse job prospects and a vibrant cultural atmosphere. With a cost-of-living index of 97.5, the ‘Music City’ stands out as an affordable destination, positioning itself below the national average. In comparison to a major city like Chicago, Illinois, Nashville takes the lead in providing more budget-friendly prices in crucial categories such as groceries (with an average savings of 5.4%) and transportation (boasting an impressive 19.9% cost advantage). Furthermore, Nashville’s housing sector adds to its economic appeal, with residents enjoying an average 25.8% reduction in housing costs compared to Chicago. Currently, the median home price in Nashville sits at $401,300, reflecting a 4.1% decrease from the previous year. Interestingly, while the average monthly mortgage in the city is $2,956, this exceeds the fixed average rent of $1,645, making renting a financially prudent choice for many. Without a doubt, Nashville emerges as an alluring destination in the heart of the American South.
98.6
$2,953
107.6
94.5
92.1
$401,300
The “Cost of Living” index score provides a comparative assessment of the relative expense involved in maintaining a standard of living in a specific area, benchmarked against a national index score of 100.
Nashville’s near-term future hinges on its booming construction sector, with a remarkable 25,648 apartment units under construction as of Q3 2023. This places Nashville third nationally in relative inventory share at 6.4%, following Huntsville, AL, and Boise, ID. However, concerns arise about demand, especially in higher-priced segments. The Central Nashville area, in particular, expects an influx of 3,528 new units over the next year, potentially creating a short-term supply-demand imbalance. Nevertheless, Nashville’s sustained job and population growth provide confidence in its overall outlook. The one-year forecast is optimistic, with demand expected to stabilize fundamentals despite supply pressures. Nevertheless, some submarkets may experience periodic performance fluctuations as the market adapts to changing conditions.
