Nashville, Tenn., is becoming known for more than just its music scene. With housing prices well below the national average and a nearly 60 percent affordability rate, according to Hanley Wood Market Intelligence data, “Music City USA” offers potential buyers an excellent quality of life and job opportunities—plus there's no state income tax.
“We are problem-free right now. [Nashville's] sales are up 6 percent, while nationally, they are down 6 percent,” says Richard Courtney, president-elect of the Greater Nashville Association of Realtors (GNAR). “Four thousand homes per month are selling in Nashville.”
Not only that, a number of big builders are well established in Nashville, including Centex Corp.; Beazer Homes USA; Pulte Homes; NVR, which purchased local builder Fox Ridge; and Del Webb, which is building an active adult community about 30 miles south of the city.
“Homes are affordable. It's an attractive place to live, and there is low unemployment,” says Brian Laster, president of Infosource, a Tennessee market intelligence company. “There may be some tightening in the market, but it won't be a disaster.”
Nashville is faring better than its regional neighbors Atlanta and Florida, markets hard-hit by a downturn in the first six months of 2006. One reason may be that investors never found the Nashville market or drove up prices there, a phenomenon that occurred in other places.
“If you look at markets experiencing trouble right now, it's all been because of overspeculation by the investor community,” says Bernard Gliberman, president of Michigan-based Crosswinds Communities.
Another may be the lack of building restrictions that other cities and states impose on builders, according to Anne McKnight, president of the Home Builders Association of Middle Tennessee.
“The profitability is good [for builders],” McKnight says, even though plenty of locals think that housing is expensive. And in some places it is. A new 800-square-foot condo in downtown Nashville costs about $300,000, she says.
Based on HWMI data, there are about 15,000 homes currently for sale in Nashville. HWMI estimates that single-family permits will remain high throughout 2006–nearly 14,000.
NATIONAL RECOGNITION In June 2006, Kiplinger's Personal Finance ranked Nashville No. 1 on its “50 Smart Places to Live” list. The city also placed within the top 10 of Forbes magazine's “Best Places to Do Business,” and many businesses have taken notice.