If you want to hear a dozen different opinions on what the Nashville market will do in 2020, just ask twelve different people. Predictions about any market are a little bit like soothsaying – even the people with the correct answer may arrive at it in a less-than-logical manner. With that caveat out of the way, I have a few observations you may find useful.
Numbers last year were good for a maturing market like ours. In Davidson County, we had roughly 5.4% in price per square foot growth, and a 5.4% increase in overall sales volume. Those numbers were a little better than had been predicted by many, who saw the signs of an imminent downturn and had begun talking about the Nashville “bubble”. 2019 saw Nashville transition to a more balanced and traditional market, with buyers having a much-needed increase in choice and leverage. We expect that trend to continue for 2020 for a few reasons.
The arrival of Amazon, Alliance Berstein, et. al. will drive some demand in the slower downtown condo market, and should create some opportunities for home sales in West Nashville along the Charlotte Pike corridor. Equity gains in those areas may be slightly higher than normal because of this temporarily-elevated demand.
Prices outside the I-440 loop remain attractive to buyers with middle-income budgets, and gains in areas like Donelson, Old Hickory, Hermitage, and Bellevue should remain strong. Whites Creek will continue to have interesting options for home buyers on a budget, and the oft-maligned but large-in-area Antioch will continue to drive Davidson County equity gains.
Our population growth remains strong, driving rents and home values ever higher. While the wild west days of 20% year-over-year equity growth in places like East Nashville and Germantown have come to an end for now, this organic growth should sustain our market for some time to come. Nashville remains attractive to big-market and coastal buyers, who love our temperate climate, walkable neighborhoods, culture, and low prices relative to their own cities.
Single-family home sales will continue to dominate the market (over 60% of all sales in 2019). Nashville’s recent legislation designed to hamper AirBnB short term rentals will make those properties less exciting to some out of town investors, but townhomes should still account for roughly 10% of all Metro Davidson transactions.
Zillow named Nashville their #4 top housing market for 2020. While we agree that equity gains will still be above the national average here (2.8%), we don’t see a return of post-recession gains. In our opinion, that’s perfect, as our current market allows both buyers and sellers to get good value for their real estate dollars, and cools off some of the frantic, stressful transactions that were so common in the 2010s.
It’s true that presidential elections can influence markets. Expect the spring market to start swinging earlier than normal (as in right now, this week) and expect a temporary cool-down in the fall as ugly rhetoric spews and tensions flare. At that point in the season, buyers and sellers alike will become emotional and untrusting in their decisions. But after the dust settles, it will return to business-as-usual in Nashville.
If you have specific questions about your current home’s value or would like to talk about an upcoming purchase, don’t hesitate to reach out!