Nashville 1Q23 Multifamily Market Insights: A surge in construction pushes vacancy higher

Highlights:

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• While absorption levels picked up in Nashville in recent months, apartment deliveries spiked during the first quarter, pushing the vacancy rate higher. Rents rose at the start of 2023 after retreating in the second half of last year.
• Local vacancy has been trending higher for more than a year, and the rate rose 70 basis points in the first quarter to 6.5%. Year over year, vacancy has increased by 220 basis points.
• Following two consecutive quarters of rent declines, apartment rents rose at the start of 2023. Asking rents increased 1.6% in the first quarter to $1,689 per month. During the past 12 months, rents have advanced 1.9%.
• Fewer multifamily properties sold during the first quarter, and prices have come down from the peak. The median sales price was $214,900 per unit, with cap rates averaging 5%.

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