"Apartment keys with price tags"
The Nashville apartment market is facing its highest vacancy rates in two decades, allowing renters to seize attractive deals. New research from the rental platform, Zumper, reveals an average rental vacancy rate of 10.8%, propelling rental rates downwards by 4% from the previous year.
The decreasing trend in rental price is a fresh respite for tenants following an imposing 20.8% increment in rent in 2023, succeeded by a 14.6% hike in 2022. The realization of the maximum vacancy rate in 20 years is also facilitating unprecedented bargaining power for renters. Property owners and Managers are forced to employ strategies to attract tenants, such as waived application fees and up to a month of free rent.
“Renters now have more bargaining power than at any time in recent memory,” stated Crystal Chen, a spokesperson for Zumper.
The high vacancy rates have paved the path for an escalating number of move-in deals and concessions. Last year, it was reported that one out of every three apartment communities proposed concessions, including move-in deals of up to two months of free rent.
“The 12-month net absorption totals 5,000 units, much lower than the market’s historical average of 12,000 units,” expressed Sam Jackson, senior associate at the real estate investment firm Matthews. “This slowdown in absorption comes at a time of a near-record pipeline of 22,000 units under construction, causing the vacancy rate to rise to a new record high.”
Prominent Nashville developer, Tony Giarratana predicts a decline in multifamily development until 2025 as the oversupply is absorbed. He is responsible for the construction of numerous high-profile projects such as the 38-story Prime building at 801 Church St.
“At the same time, we are pursuing development of quality new projects such as 1010, 901 MLK, and Rock Block Flats that will be delivered in 2026 and 2027, which we forecast to be a period of low supply and high demand,” Giarratana commented.
An interesting trend to note in the region is that cities in Middle Tennessee with the least expensive rents are currently witnessing the highest rent hikes. The most significant increases are reported in Columbia, Clarksville, and Cookeville, with 17.1%, 8.8%, and 6.4% increments over the previous year, respectively. However, further rent details are as follows:
With the current scenario favoring renters, they can seize the opportunity for potential savings on rent or even take advantage of attractive move-in deals. Remember, the property market is continuously fluctuating. Deal today might not be there tomorrow!
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