A new report from Wisconsin-based ABODO is showing Nashville rent prices have seen one of the sharpest declines in the country, with the average price for a one-bedroom apartment in town dropping by 3.1% over the first half of 2017.
At first, it might seem hard to believe that any housing category in Nashville could be seeing a drop in price given it’s one of the hottest markets anywhere right now, but with more and more apartments being built all over the Nashville area, inventory has finally become saturated, and the 3.1% price decline now represents the third-largest in the U.S.
As pointed out by The Tennessean, a whopping 16,000 apartment units are currently under construction in the Nashville area, and an additional 10,000 more units are also somewhere in the planning or approval process. But even with Middle Tennessee’s strong job and population growth over the last year or so, increased vacancy rate and the delivery of units already being built could eventually shift developers’ focus to affordable condos, a product that’s still very much lacking in Nashville’s urban core.
According to data from the Greater Nashville Apartment Association, the occupancy rate in Nashville dropped by 2.76% to 92.69% during the first quarter of 2017, which can largely be attributed to 1,786 new units being delivered during that same timeframe. As mentioned, thousands of additional apartments are already under construction, which means occupancy rate should continue its downward trend and likely leaving many developers to ponder a new strategy moving forward.