August 8, 2022

Nashville Q2 Multifamily Market Insights: Rapid economic growth supporting investment market

Highlights:

The first half of 2022 brought elevated activity to the Nashville multifamily market. Construction volume and investment transaction velocity were both elevated and rents continued to surge higher. Vacancy rates inched up, but absorption still reached approximately 3,200 units.
After a sharp decline in 2021, vacancy has trended higher in recent quarters. Year to date, the rate increased by 50 basis points, including a rise of 20 basis points during the second quarter. Despite the recent uptick, the rate of 4.5 percent is still down 20 basis points year over year.
Rent growth remained elevated during the first half with the average asking rent rising 7.6 percent to $1,718 per month. Year over year, apartment rents advanced by 13.9 percent.
The momentum in the investment market continued to build after a very active 2021. Multifamily transaction volume in the first half of 2022 was ahead of levels recorded during the same period one year ago. Sales prices continued to push higher with the median sales price surging 50 percent since the end of last year, spiking to $264,900 per unit.