Construction of new units annually will cross the 10,000 mark for the first time in Nashville’s history. This represents a 6.7% increase in apartment inventory. Expanding on the explosive rent growth last year, the average effective rent will reach $1,520 per month, which puts the two-year growth rate above 22%. 1
Despite completing 4,000 more units compared to last year, strong tenant demand will lead to the absorption of more than 90 % of the new stock and consequently, keeping pressure on apartment rents. This construction surge will provide additional options to renters in a crowded market where vacancy rates have plummeted to their lowest levels since 2000. Rising rents and the right conditions in the city’s core will encourage spillover demand into Nashville’s suburban neighborhoods.
Greater economic diversity supports apartment demand at all levels. As a result, Nashville has been successful in attracting new businesses as high growth companies converge on the urban center and provide an abundance of new job opportunities. For example, Amazon and Asurion are completing their moves into downtown. Construction also continues on Nashville Yards, a 17-acre development containing music venues, residences, office and retail space along the enhanced public walking spaces. 2