Where, how to house thousands of new arrivals?

Friday, December 24, 2021, Vol. 45, No. 52

Those following the Nashville residential real estate market witnessed a surprising march through the initial COVID-19 invasion when the city was closed for several weeks. Even having been designated an essential service, the real estate community had concerns over what the future might hold, even as buyers were still flocking into town in swarms.

Those concerns were soon quelled as 2020 proved to be a record year for real estate transactions, even though inventory began to disappear. Many were mandated to stay at home, and others chose to do so voluntarily. Likewise, would-be sellers decided to remain in the homes they owned forever, or so it seemed.

Fortunately for those moving into the area, builders were building as quickly as the supply of material would allow. The construction industry fared better than their hospitality brethren, and houses were sprouting in every nook and cranny of every existing neighborhood, all the while the bulldozers were driving livestock from their homes as pastures gave way to sticks, bricks and asphalt.

Depleted and understaffed codes departments across Middle Tennessee struggled to withstand the onslaught, and the urban core saw unprecedented residential development. Traffic issues subsided as businesses allowed their employees to work remotely, a trend that continues.

As some businesses opened their doors and construction continued, traffic increased to levels worse than pre-COVID days. That’s understandable since population has increased significantly and nothing has been done to ease congestion.

In fact, the abundance of construction equipment has compounded the situation even more.

Downtown developers, a term rarely – if ever – used before 2004, have seized this opportunity to plan for the construction of hundreds, if not thousands of residential homes in high-rise buildings that will house many carless denizens. That, on the surface, would seem to help.

Visionary downtown high-rise developer Tony Giarratana says that as Nashville matures in its urban living, the newcomers will require little if any parking as they will navigate their travel on foot, bicycles or rideshare. With many of the transplants leaving larger cities where automobiles are not viewed as necessities, he says, the ratio of people to cars will be lowered.

But those favoring non-motorized transport will already be downtown. That is of little relevance to those who rest uncomfortably as they travail the arteries leading into the city or the surge that occurs when they head home.

Those suburbs are absorbing the area’s new citizenry who are desirous of driving, along with others seeking green, green grass with their homes.

Thompson’s Station in southern Williamson County, once better known as a column in a local daily paper written by Jerry Thompson than a community, is considered a suburb of Nashville by many.

Columbia, some 45 miles south, is feeling the heat from the north. The geographic diversity has created a two-headed monster, as many of those moving from New York, Chicago and even Minneapolis seek downtown motorless living, while the Californians are comfortable with commuting from an hour or more away.

The result is the boom, yes, the boom the area is experiencing. Good news, bad news: There is no end in sight.

Depending on whose scorecard is used, there are as many as 25,000 to 30,000 jobs on the way to Nashville, few of which are robotic. That means more people and the need for more housing. But there is little inventory.

Even with the new Omicron COVID variant upon us, the Nashville real estate market has established a COVID precedent. Inventory is basically half of what it was pre-COVID, demand is greater that it was and prices continue to rise.

Sale of the Week

With the 2020 sales record in the rear-view mirror and COVID numbers in retreat, 2021 began as the previous year had ended. In March, on the anniversary of the advent of the virus entering Middle Tennessee, the market exploded.

During a three-month period, prices in some areas rose as much as 30%. Once those properties closed and were in the books, they established new, higher comparable sales. Those comps became the basis for new pricing, yet we’re still seeing houses sell for hundreds of thousands of dollars more than list price with appraisals becoming inconveniences rather than requirements.

The recent sale of 28 Northumberland Drive for $3.715 million is one of 116 houses that sold in Davidson County for $3 million-plus this year. It sold for $701 per square foot on a cash transaction with Jenna Dennie of The Realty Association serving as the listing agent and Scott Knabe and Adam Burke of Compass representing the buyer.

The sellers had purchased the home in 2019 for $1.235 million. There had been renovations made, but with 5,307 square feet – and 779 of that in the basement – things went well for the seller. For the next few years, things will go extraordinarily well for sellers whether they are naughty or nice.

Merry Christmas.

Richard Courtney is a licensed real estate broker with Fridrich and Clark Realty and can be reached at richard@richardcourtney.com.