Downtown Nashville Condo Update

This article entitled “Condos face crucial test” appeared in the Nashville Business Journal on March the 6th, 2009. The author is Turner Hutchens who can be reached at 615-846-4254:

More than a thousand new luxury condos in downtown Nashville seemed like a good idea at the time.

That was just a couple of years ago, and despite the housing, credit and job busts since, developers argue that it still is…read the entire downtown Nashville condo update article.

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Home Sales for Nashville, TN – December 2008
Mid-Year Nashville Market Update
Developers of The Braxton Are Sued
2 Year Analysis of Nashville Condo Prices
  • Halting Foreclosures

    The Nashville condo market is going to implode. When I arrived here from Pennsylvania I was shocked to see what the asking prices were for marginal downtown locations. $500,000 for a 2 bedroom condo with 1,300 ish square feet is just not feasible here. The real value is more like $200,000 to $250,000. That is probably where the market will stabilize.

  • Grant Hammond

    Thank you for your comment. It is clear that there is a market correction coming in the downtown Nashville condo market, but 40-50% is simply not realistic. Looking at the total new condo units and the lack of demand, it would be easy to predict such a decline, but I would be very shocked if the devaluation was half of your prediction.

    A few reasons: no new condos are being constructed past this summer, the rental market is still strong for these units, developers are not dumping the market yet. Yes, there will be a few isolated deals (less than 10%) that eclipse a 50% discount, but don’t count on a mass discount.

    Assuming a stable economy, 2 years from now, we are looking at a lack of supply and 3 years from now a possible sellers’ market.

  • BRIAN

    I know this post is old but I must comment. I agree a major correction is coming. I feel that 250K for a 2/2 is a little high but appropriate for the novelty of having an apartment in one of few high rise building in the area. I started watching these condos 5 yrs ago when the prices were ~200K for a 1/1. That was around the same price as NYC at the time. This is Nashville, TN and the area just doesn’t have the jobs required to support these prices. It would be different if the city had public transportation and services available that allowed the downtown residents to forgo a car but it just isn’t there. Not to mention the competition of the surrounding suburbs where 300-500K will get you a house on a golf course. Any guesses as to when the bottom will arrive? I think the rental market may be a sign that people are shying away from buying the condos. Maybe these renters will love downtown living and drive the prices to new levels, I doubt it. I predict they get their feel and move to the suburbs to grow old with the rest of us.

  • Anonymous

    MMM… I finally get to say what I feel about this mess. I'll start with a story. Awile back when I was "kicking the tires" sort to speak on some condos in Germantown. I ask the price and the guy blurted out 250,000. I gasp and ask him who were his customers? He quickly replied people who are well into their career. I told him I have been working for 19 years at the same job and connot afford it. Plus couples with children are gonna want a yard and such. The condo market is full of BS like this. Outrageuos pricing coupled with developers who are arrogant and totally misguided. I have worked for Metro govt for more than fifteen years. Have virtually no outstanding debt and have a nice savings but I still can't afford a downtown condo. So my question is who are the customers/buyers? Who makes 113,000 in Nashville? and is willing to do without a yard and a family? Young people of course but do they make 113,000 a year? I dont think the developers actually sat down and thought things through. The fifth and main project was a good project. However, the powers that be forgot to accurately asses what people are willing to pay.

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