The Nashville metro area real estate market caught fire during the COVID pandemic, partly due to a flood of home buyers relocating from other parts of the country.
But a lot has changed since then.
Once referred to as a “pandemic boomtown,” the Nashville real estate scene has cooled considerably over the past 18 months or so.
Recent forecasts for the Nashville metro area housing market suggest that prices will remain flat over the next year, into early summer 2025.
Here are the latest real estate trends, developments, and predictions for Music City, extending through 2024 and into 2025.
A Formerly Red-Hot Housing Market Cools Down
Nashville was one of a handful of metro areas that received an influx of new residents during the COVID pandemic (and the years leading up to it).
Empowered by the ability to work remotely, thousands of people nationwide began to flee crowded, overpriced cities for housing markets like Nashville, Boise and Austin.
This trend sent home prices skyrocketing, as buyers competed fiercely for limited inventory and often found themselves in bidding wars.
But during 2023 and 2024, many of those former “pandemic boomtowns” experienced a market correction with falling prices and fewer sales.
In 2024, Realtor.com published a report entitled: “A Rebalancing: How America’s Pandemic Boomtowns Are Faring 2 Years After They Upended the Housing Market.” It identified 10 U.S. metros that became some of the nation’s hottest real estate markets during the pandemic—including Nashville, Tennessee.
To quote the spring 2024 Realtor.com report:
“Nashville’s rich musical heritage and vibrant cultural scene make it a unique place to live. However, the area’s Realtor.com demand metric ranking has dropped significantly, with a demand ranking that fell as fast as it rose, despite prices staying close to where they’ve been since the pandemic market peak.”
(The “demand ranking” mentioned above measures how many page views per listing a particular metro area receives, compared to all other metros.)
This is just one of several metrics that show how the Nashville real estate market has cooled over the past year, a trend that could continue into 2025.
Forecast: Home Prices Will Flatline Into 2025
As of July 2024, the median home price for the Nashville-Davidson-Murfreesboro-Franklin metropolitan area was around $447,000, a 2% increase from a year earlier.
According to one prominent forecast, the Nashville-area housing market could flatline over the next year, at least where home prices are concerned. Zillow predicted the median home price for this metro would decline by -0.5% from May 2024 to May 2025.
Granted, that’s a marginal decline in values. But the fact that they expect a drop of any size is noteworthy, when you consider how fast prices were rising just two years ago.
The graph below shows the median home value for the Nashville metro housing market going back to 2016. It’s based on data provided by Zillow.
You’ll notice three distinct trends in the above graph:
- First, you can see where the COVID pandemic greatly accelerated home-price growth in the Nashville area, from 2020 – 2022.
- You’ll also notice that prices peaked at an all-time record high toward the end of 2022, followed by a brief and shallow downturn.
- Lastly, you can see how the median price has been mostly flat in recent months.
Recent forecasts for the Nashville-area housing market predict a continuation of trend #3 above. Analysts expect house values to hover within their current range through the remainder of 2024 and into 2025.
More Properties Available for Home Buyers
Like the other pandemic boomtowns, the Nashville real estate market experienced a severe inventory shortage from late 2020 into 2023.
Home buyers poured into this market from elsewhere across the country, driving inventory levels down to record lows. Back then, buyers struggled just to find a home, much less win a bidding war.
Fortunately, inventory conditions have improved since then.
According to the Realtor.com report mentioned earlier, the total number of active real estate listings in the Nashville-Davidson metro area increased by 21% over the past year.
As of mid-summer 2024, this housing market had more than a 4-month supply of homes for sale. That was a higher level of inventory than most other metro areas across the U.S.
For comparison, some markets like Seattle, Boston and Washington, D.C. still have less than a 2-month supply of homes. So the Nashville housing market is in relatively good shape from an inventory standpoint.
This market could gain even more inventory in the months ahead. Some analysts predict that a drop in mortgage rates later this year will ease the so-called lock-in effect, bringing more properties onto the market.
Prediction: The Nashville housing market has gained inventory and could experience additional growth through the rest of this year and into 2025. This would give home buyers more options to consider and therefore a better chance of finding the right home.
Population Growth Less of a Factor These Days
During the decade from 2010 to 2020, population growth fueled the Nashville real estate market more than any other single factor. But according to more recent data, local population growth has slowed considerably.
To quote a report from the Tennessee State Data Center at the University of Tennessee:
“Middle Tennessee counties have ranked among the country’s fastest growing in recent years, but new population estimates released Thursday show Davidson County’s population declined by 11,533 people in 2021 to a total of 703,953.”
The latest estimates for 2023 showed the population of Nashville edging back up again. But it still has several thousand fewer people than it did at the start of the decade.
This is partly why some forecasts for the Nashville housing market predict little to no home-price growth over the next year. Slower population growth reduces the demand for housing, which in turn softens home prices.
Quick Facts About the Nashville Metro Area
Nashville is situated in the north-central part of Tennessee, along the Cumberland River. This region features a mix of rolling hills, lush valleys, and flat plains. The Cumberland River flows through the city and offers scenic views and outdoor recreational opportunities.
The cost of living in the Nashville area is generally higher than the U.S. average, primarily due to higher home prices. But even so, it remains more affordable when compared to other major metropolitan areas like New York and San Francisco.
Major Cities in the Nashville Metro Area
- Nashville: The aptly nicknamed “Music City” is famous for its live music scene, with landmarks like the Grand Ole Opry and the Country Music Hall of Fame. Population in 2024: 692,000.
- Franklin: A city of 87,000 people known for its historic downtown and Civil War history.
- Murfreesboro: Home to Middle Tennessee State University and rich in Civil War history, including the Stones River National Battlefield. Population: 162,000.
- Hendersonville: A city of roughly 63,000 residents that offers a suburban lifestyle and outdoor recreational opportunities on Old Hickory Lake.
- Smyrna: Known for the Smyrna Airport and the Nissan North America manufacturing plant, which are significant local employers.
Why People Like to Live There
- Thriving job market with opportunities in healthcare, technology, music, and tourism
- World-class entertainment and dining options
- Friendly and welcoming community
- Rich history and culture
- Easy access to outdoor recreation, including hiking, biking, and water sports
Major Employers in the Nashville Area
- Amazon: Has a growing presence in Nashville with a logistics hub and corporate offices.
- Ascension Saint Thomas: A leading healthcare system in Tennessee.
- Asurion: A global tech insurance company headquartered in Nashville.
- Bridgestone Americas: A major tire manufacturer with a significant presence in Nashville.
- Community Health Systems: A leading operator of general acute care hospitals.
- General Motors: Operates a manufacturing plant in Spring Hill, TN.
- HCA Healthcare: A Fortune 500 company and one of the nation’s leading providers of healthcare services.
- Nissan North America: Has its North American headquarters in Franklin, TN.
- Randstad: A global staffing and recruitment agency.
- Vanderbilt University Medical Center: One of the largest academic medical centers in the Southeast.
Major industries in the Nashville area include music, entertainment, hospitality and tourism. The state government also employs many local residents.
Disclaimer: This report includes housing market predictions and forecasts for Nashville, Tennessee and the surrounding area. Those forward-looking views are the equivalent of an educated guess and therefore far from certain. The Home Buying Institute (HBI) makes no claims or assertions about future real estate or economic conditions.
Brandon Cornett
Brandon Cornett is a veteran real estate market analyst, reporter, and creator of the Home Buying Institute. He has been covering the U.S. real estate market for more than 15 years. About the author