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Category: Multifamily, Report Tags: Nashville, TN

Nashville, TN Multifamily Market Report

Market Overview

Nashville continues to increase in population and job growth, and thus renters. The market is attracting more renters to Class A apartments, which are seeing high occupancy, versus Class C properties. As job growth continues to rise in Nashville, affluent renters are increasing. Nashville is experiencing low delivery rates of new units due to high costs of labor, material, financing constraints, and vacancy rates. In the last twelve months, 9,738 units were delivered. The forecast predicts that this number will lower to 8,193 in the upcoming twelve months.



  • Nashville multifamily 12-month sales volume is $4.3B, which is low for the market, but still well above the historical average of $1.2B.
  • Class A apartments in Nashville have a soaring number of units delivered to the market, at 3,194 units compared to Class B (606 units) and Class C (zero units).
  • High interest rates are slowing deal flow in 2023. Total sales volume of $4.3B is the lowest since the shutdown in 2020 Q1.
  • The typical cost of a single-family home has gone up by 48% since 2019, making it more expensive and unaffordable for many people. As a result, many individuals who would like to become homeowners are opting to rent instead.



High-interest rates are greatly affecting investment sales in Nashville’s multifamily market. At the end of the fourth quarter, the total number of multifamily transactions metro-wide dipped to its lowest since early 2021. There is a likelihood that pricing has peaked, especially in new suburban assets. Nashville’s urban and suburban core are trading for about $350,000 per unit or more. However, correlated to rising interest rates and slowing investment activity, pricing has been trending downward since the second quarter of 2022.


Vacancy | Construction | Rent

Vacancy in the Nashville multifamily market has cracked double digits of 10.3 percent for the first time since the CoStar Group began tracking the market in 2000. There are over 3,000 net new units hitting the market in the first few months of 2023, with several thousand more coming later in the year, the main driver behind near-record breaking vacancy rates. However, Nashville’s population is predicted to grow by over 55 percent by 2060, which will aid in the absorption of units and lowering vacancy rates. Since the beginning of 2018, more than 37,000 units have been absorbed on a net basis by the Class A cohort. Class B communities have seen a net 4,000 units moved into during that same time period.


For the first time in two years, asking rents declined in Nashville during Q3 2022 and Q4 2022. The market has not seen an improvement in the most recent quarter. These trends have been largely driven by slimming demand and rising vacancies. Class A apartments have seen the worst of these asking rent losses, as demand is not keeping pace.


Nashville continues to be a top market for multifamily construction. In fact, there is a strong likelihood that the number of delivered units will top 10,000 in 2023 for the first time and more than 3,000 units opened in Q1 2023. The number of units in Nashville coming to market represents 14.2 percent of the market’s total inventory, which towers over the national average of 5.5 percent.


Nashville Multifamily Market Snapshot

Units Under Construction: 21,916
Units Delivered (12-month): 9,738
Vacancy Rate % Change YOY: 10.3%
Asking Rent Growth (YOY): 2.0%
Average Price Per Unit: $255,000
Sales Volume 12-month: $4.3B
Sales Comparables 12-month: 110


Why is Nashville a Business-friendly State?

  • HP, Oracle, Tesla, Apple, Amazon, and Fidelity, are expanding their operations in this region
  • No state income tax
  • #1 in the country for global access and infrastructure, advanced industry job growth, investment target in 2022 and 2023, according to PWC
  • Hottest job market in the southeast, according to the Wall Street Journal
  • #1 U.S. market to watch in 2023, followed by DFW and Atlanta


Nashville’s Economy and Job Growth

  • Major employers include – Oracle, Amazon, Facebook, General Motors, Chewy, and Phillips
  • According to Oxford Economics, Nashville is expected to experience an average yearly increase in employment of 0.9% between the years 2023 and 2025, and this places it in 14th position out of a total of 51 metropolitan areas.


Submarket Highlights

Downtown Nashville

The multifamily market in downtown Nashville is rapidly evolving due to an influx of new supply attracted by the growing employment base from companies like Amazon, AllianceBernstein, and Oracle. Although demand for apartments has remained constant, the area has a high vacancy rate of 18.1 percent due to consistent new supply. This trend is expected to continue with over 11,000 units under construction.


Southeast Nashville

Demand for apartments in Southeast Nashville has been declining since 2021 and has recently dipped into negative territory. Despite near-all-time highs in supply additions, with 2,200 units currently underway, demand is expected to remain sluggish, and the area is set for another wave of supply in 2024, which could further exacerbate the situation.


Williamson County

Williamson County is highly desirable due to its highly rated schools, strong job market, and retail and entertainment options, leading to increased development and doubling of inventory since 2010. Despite supply additions and high average asking rents, demand for apartments in Williamson County has not slowed down as much as in other parts of the metro, preventing significant vacancy expansion. Still, rent growth has been subdued in 2022 and is expected to continue in 2023 due to the number of units underway.



Murfreesboro’s multifamily market has seen a rise in vacancy rates and a decline in rent growth, with additional supply expected to put further pressure on vacancies and rents. However, despite the market softening, developers remain interested in the area. While transactional activity exceeded historical norms in 2022, sales have declined in the past six months due to the high-interest rate environment.

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