The Nashville metropolitan area’s housing-lot inventory has hit an all-time low, and the city is now nearly tied with Portland, Oregon for the worst supply of home-building lots across large metro areas.
This lack of inventory means higher costs for builders when they buy from developers, and in turn higher costs for buyers in an already expensive market, according to The Tennessean’s Gehtan Ward. In Q2 of 2016, the average price of a new single-family home in the Nashville area rose to $381,000, up from $346,000 this time last year.
According to Metrostudy, the current supply of vacant lots would last Nashville 14 months, far below the 18-to-24 month supply that Metrostudy considers to be healthy. In order to ensure a healthy supply, MarketGraphics Research Group Inc. has estimated that 88,000 lots need to be developed across the Nashville region in the next five years.