[Note: Updated for 2015] Every year about this time I start getting inquiries about homes and condos near the local colleges: primarily Vanderbilt University and Belmont University. Students and their parents are increasingly finding that purchasing a home for their 3-6 year tenure in Nashville can be a smart investment. In general Nashville home values fared better than average during the economic downturn. Recently our real estate market has become so competitive you wouldn’t believe it.
Ultimately home ownership can offer a handsome tax write-offs, plus it can help build a student’s portfolio and credit. Alternately, even if you don’t show much appreciation during your short time in Music City – breaking even upon resale will result in a less costly experience than a lengthy dorm or rental stay.
Belmont and Vandy are both located just west of downtown near the 21st Avenue corridor at Hillsboro Village. Single family homes in the immediate area tend to be older with early-21st century architecture. Cottages, tudors, four squares, and bungalows line the streets of Hillsboro Village, but the high desirability of the area tends to drive prices up. The average home in zip 37212 is 2529 square feet and lists for $582,684 – this is not quite affordable to most college buyers. Likewise the average condo in 37212 is 1,241 square feet and lists for $387,500 (though there are several older complexes with units starting under 200k if you have cash… more on that later).
The other nearby zip code is 37203. This zip primarily occupies the areas north of West End, but also reaches across West End into The Gulch. There are very few single family homes in this area as most have been converted into the commercial spaces of Music Row, but the West End Circle area (31st Ave., Long Blvd., Parthenon Ave.) offers an abundance of condos and townhomes of varying ages and size. The median condo in 37203 is 1,266 square feet and lists for $497,800.
Other neighborhoods near Vanderbilt and Belmont
Sylvan Park. Sylvan Park and neighboring Sylvan Heights is a charming little area in 37209 filled primarily with post-WWII cottages and bungalows. The area has an extremely active neighborhood association as well as an historic overlay. Sylvan Park even has its own strip of boutiques and restaurants. These homes average 2566 square feet and list for and average of $569,900. .
12 South. 12 South/Belmont in 37204 is the little neighborhood that could. My father, was once a metro police officer on the 12 South beat. If he were alive today, he wouldn’t be able to believe the extent of renovation that has happened in the last decade. 12 South is now one of the trendiest districts in all of Nashville. Craftsman bungalows and historic replica homes are the norm here with an average price of $764,636.
Woodbine. If your budget doesn’t stretch quite as far, Woodbine in 37210 and 37211 might pique your interest. Small post-WWII cottages can be purchased in the 150k-range if unrenovated. Larger rehabbed properties regularly sell for less than 250k. This area is a bit farther out; I’d say perhaps five miles or a ten to twelve minute drive, but the area has become so popular with students that I’ve heard efforts to re-brand the area as “Vandybine”.
East Nashville. The east side is definitely farther out (about a 15-20 minute drive), but the area has become so popular with young native buyers that many grad students are now starting to make the leap across the river to 37206 and 37216. Filled with a variety of styles of historic homes, this area has slowly become the hip haven for the young and the young-at-heart. East Nashville has a college-town vibe without the college. There are numerous shops, boutiques, and restaurants – nearly 100% of them are independently owned. Homes here average between $150 to $250 a square foot depending on location and level of renovation.
Condos, Flats, and Townhomes near Vanderbilt and Belmont
Since the housing crash of 2008, the ability to finance some types of condominiums has become quite difficult. This is especially true in developments with higher-than-average rental to ownership ratios (like you tend to see in the high-rent areas near the universities). In 2009 FHA and Fannie Mae both tightened their guidelines on condo loans. In order to qualify for FHA a development couldn’t have more than 50% renters. For conventional financing the ratio can’t go over 30%. There are other items to consider such as the percentage of owners behind on HOA payments, the concentration of FHA loans in a development, the density of single investors in small complexes, and other regulations. These lender requirements are a perpetual moving target and they add an extra level of difficulty in researching and purchasing condos. As an agent who spends about 50% percent of my time representing buyers in the urban condo market, I can help navigate these choppy waters. The following developments represent WHAT I BELIEVE to be the best condo options for student buyers and their parents:
1. The Park at Melrose – The large, affordable development is probably just a tad farther away than you are hoping to go, but I’ve had more success placing Vandy and Belmont students here than any other development in Nashville. Located 2.5 miles or a 6.5 minute drive from the Vanderbilt University campus (Belmont is closer), this six year old development is a great value for newer construction and it’s filled to the brim with young twenty/thirty-something owners. Each unit offers upgraded granite countertops and en suite laundry. With HOA dues of just $135/month you get a pool and a gym which brings an extra level of value. The one bedroom homes typically sell in the low 200’s and the two bedroom homes start in the mid-200s. Count on spending a little over $200/ft.
2. The Adelicia is probably the finest example of urban living in Nashville. With residents like Taylor Swift and Simon Fuller in the penthouses, the highrise has developed a reputation for excellence that is unparalleled and relatively unfazed by this tough economic climate. But here is a secret that you may be unaware of: The Adelicia offers a fairly large number of small studio units in the lower portion of the building that wraps around the garage. These units range from 657 to 728 square feet any typically sell under 300k. The HOA might seem a tad high at .35 cents a foot, but that includes 24-hour security, the pool, gym as well as cable and internet which offers a real value when you break the numbers down. Did I mention that The Adelicia is walking distance to campus?
3. Most any development deeded as a Townhome, Planned Unit Development, or Horizontal Property Regime. If you hope to keep your home as an investment or rental beyond your tenure, take note here. Developments that are deeded this way don’t have the same lending restrictions as vertical condominiums. Banks tend to view them with the same eyes as a single family home so there usually aren’t restrictions on rentals and such. Examples include: The Row at Berry Hill, Waverly Place, 12 South Towers, and several small developments on west end circle. Upscale and established Green Hills also offers a good selection of townhomes in 37215 (Gerorgetown, Four Seasons, Adren Place, etc.). However, most townhomes in the area tend to be older. Developers learned that they could construct more units if they went vertical so that’s the way they’ve been going since the mid-1980s.
4. CORE Development PUDs: CORE is a construction group based in Nashville that has been a major player in rehabbing classic, urban properties like the Werthan Mills historic lofts in Germantown, as well as the Kress and Art Ave Lofts in the downtown core. A few years back they developed a small planned unit community of detached townhomes in the Sylvan Heights neighborhood called West End Station that sold so successfully they have decided to replicate the development at Gale Park in the Melrose/12South area as well as Germantown Station in 37208. The units are craftsman in style and all offer 2/3 beds, and at least 2 baths; (perfect for a roommate situation). Pricing starts in the 300k range depending on development.
5. Burton Hills. This Green Hills development in 37215 offers a variety of newish flats and townhomes built in 1980s and 1990s. Pricing typically starts in the 240k range. The area is generally safe and affluent. The one big drawback is that this development is located on the other side of Green Hills Mall which can offer a significant traffic challenge at most hours of the day.
6. Melrose Heights – a new development coming this fall. Read more here. Studios starting around 100k. Two bedroom units from 175k.
Other recommended developments that you might consider in your search: Bristol West End, Bristol on Broadway, ICON in the Gulch, Acklen Place, Centennial Row, 1101 eighteenth, 807 eighteenth, the Elmington, Cambridge, Rhythm at Music Row, Terrazzo, The Glen, Westchester, Parklane, Midtown Lofts, Lofts on Eighth and the new Twelve Twelve tower. If you see a listing on the MLS in a development not listed, drop me a quick note to ask me why I didn’t include it.
What About Financing?
There are lots of ways to set up financing. Primarily I see parents purchasing as a second home and perhaps adding the student’s name to the deed, but it is not uncommon to see grad students qualify for a loan with parents as co-signers. Either way, interest and property tax payments should be tax deductible (of course you should consult your accountant). If the student is receiving financial aid you should consult your counselor to ensure that property ownership will not affect the level of aid available. Here is a list of local recommended mortgage brokers who can help you make the right financing choice.
Finally, I should note that I DO NOT WORK WITH RENTALS OR RENTERS. You won’t find many Realtors in Nashville that do work with renters. There simply isn’t a way for us to get compensated for our time unless we charge a retainer up front for showings. My recommendation would be to consult Craigslist, Zillow, and the rental section of Realtracs.com where you can engage with the property managers directly.
*Stephanie is a Nashville TN residential real estate agent, licensed since 2003. She specializes in representing buyers and sellers in Davidson County with a focus on urban core neighborhoods and condominiums. Contact Steph today.