The Nashville Downtown Partnership released their annual publication, The Residential Report: July 2015. It has a tremendous amount of data and insight on downtown living and downtown inhabitants. Every year I am thrilled to read this report because it confirms that our downtown area is thriving, that residents want to live downtown, and that there is a shortage of downtown living options. Through this report we gain exciting new insight into the downtown Nashville housing market.
Nashville’s downtown population has grown an astounding 300% from 2000 to 2014. However, Nashville falls behind peer cities such as Austin, Charlotte, Indianapolis, and Memphis in downtown urban residential development. This is mainly due to the lack of residential zoning in the downtown market since the mid-90’s. According to the report, we currently have 4,902 downtown residential units of which 47% are rentals, 49% are condo, and the remaining 4% are single-family homes. Of those units 95% go for market rate while only 5% are affordable units (a decline from last year).
There are 2,384 condos in 40 buildings in downtown Nashville. The only new units are in the Twelve|Twelve development in the Gulch that was the first condo project since Terrazzo in 2009. Twelve|Twelve is already 71% sold and expected to sell out by the end of the year. There is also a 1.2 month supply of re-sale condo inventory, which is the lowest level ever seen in the downtown market. With supply being so low and demand being high, condo price per square foot has not only recovered but also increased. This year alone, we have seen record-breaking sales prices, particularly in the luxury high-rise developments in the Gulch. Unless some of the new apartment buildings convert to condo, we will not have enough units on the market to fulfill demand. Currently, we only have two condo projects on the horizon. One is City Lights on Rutledge Hill that will consist of 71 luxury condos and is slated for 2017 completion. The other has not been fully confirmed but will sit at 505 Church Street and contain apartments and condos.
The Residential Report was also full of surprising facts about the demographics of downtown Nashville dwellers. Surprisingly downtown is not dominated by singles (41%), but by married couples . Forty-five percent of the residents are married and downtown continues to be a popular place for married couples with a 14% increase since 2012. Downtown has also become an attractive place to live for out-of-state buyers with 34% of all residents hailing from another state, 32% from outside of Nashville and 27% moving from within Nashville. Baby boomers (age 51-68) has the largest representation of downtown residents at 38% while Millenials (Generation Y, 34 and younger) had the second highest rate (30% ) with Generation X (age 35-50) at 28%. Downtown almost evenly attracts both males and females with percentages that continue to fluctuate from year-to-year. In 2015 the split was 52% male and 48% female.
The demand for downtown residential housing does not seem to be slowing down and it will be interesting to see how city officials and developers respond to this need.
(Originally published for 12th&Broad: 8/2015)