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Old 07-01-2015, 12:59 AM
 
11 posts, read 22,086 times
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Is it just me or is there just too much construction going on such that there will be a backlash soon of too much supply. Yes, supply is tight now, but once all of this construction is done, there will be large amounts of supply dumped into the market all at once.

I'm sure a bunch of the apartments would convert themselves to condo soon after the rental market drops and then there will be too many condos such that the the current 1 bedroom $350k+ condos have got to fall. Anyone see this coming too? I was in the market for an "average" concrete condo in Midtown/Gulch but now I'm too afraid of the prices falling in the next 2-4 years.

Now I'm thinking of finding the cheapest urban condo in Nashville so that if it does fall, it won't fall too far. Any suggestions for that?
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Old 07-01-2015, 02:22 AM
 
Location: Franklin, TN
6,662 posts, read 13,327,304 times
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Quote:
Originally Posted by rrajbhan View Post
Is it just me or is there just too much construction going on such that there will be a backlash soon of too much supply. Yes, supply is tight now, but once all of this construction is done, there will be large amounts of supply dumped into the market all at once.

I'm sure a bunch of the apartments would convert themselves to condo soon after the rental market drops and then there will be too many condos such that the the current 1 bedroom $350k+ condos have got to fall. Anyone see this coming too? I was in the market for an "average" concrete condo in Midtown/Gulch but now I'm too afraid of the prices falling in the next 2-4 years.

Now I'm thinking of finding the cheapest urban condo in Nashville so that if it does fall, it won't fall too far. Any suggestions for that?
It's hard to say. Current estimates show the Nashville metro area is growing by 30-34k per year. That's 12-13k new housing units needed per year. Even with the amazing amount of construction going on, we're barely touching that figure. The apartment figures cited by local media say there is a near constant 10,000 apartment units under construction or in the pipeline at any given time. With some of the larger construction projects, it takes more than a year to build out.

So in essence, even with massive amounts of units being dumped on the market, the number of new residents moving to the area is snatching them up almost as fast as they come online (in some cases, new apartments are completely leased before they open). Market wide, the rental market is about 90% leased. In the downtown core, the number is a staggering 99% leased. We have a ways to go before there is an oversupply.

However, no one can predict the future. If growth slows a little bit, it could lead to a price drop. It's hard to tell with the core, because before this building boom, Nashville's urban market was severely undersupplied. With Davidson County adding an average of 10,000 residents per year, and many new residents picking the urban core, I don't think we are in immediate danger. But we should be cautious.

As for condos, the market is even tighter, so I do believe you will see some new properties convert to condos (for instance, Twelve Twelve converted to condos while it was still under construction).

I understand the concern....you don't want to dive into the market while it's hot, pay a premium price, only to see the prices stagnate or fall soon after. But it's hard to say when the boom will end. Waiting might only see the prices drive higher, and even if they stagnate or fall, still be higher than when you entered the market.

Barring a major change in the real estate market (either locally or nationally), I think the next 2-4 years are relatively safe. After that, it's anyone's guess.


Disclaimer: I am no real estate expert. But if I were looking for a *safe* property, I would look at some of the condos or lofts Downtown, not in the Gulch or Midtown. I would look at smaller unit buildings, not the newer towers. You might sacrifice some newer amenities, but I think you wouldn't see as much potential for oversaturation, since the older lofts aren't as easy to mass produce as shiny new towers.
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Old 07-01-2015, 05:05 AM
 
4,344 posts, read 4,718,896 times
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Quote:
I was in the market for an "average" concrete condo in Midtown/Gulch but now I'm too afraid of the prices falling in the next 2-4 years.
What are you looking for - a place to live or are you looking for a place to rent or to flip in 2 to 4 years? I would be more concerned about the smaller places and resale down the road or the ability to rent it out, if that is what you're looking to do. If you're looking for a place to live, I would go with location and amenities.
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Old 07-01-2015, 07:24 PM
 
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Default Nearly $2.5 billion in building permits this past year

The 2013-14 fiscal year saw a record amount of building permits in Nashville, and the 2014-15 fiscal year topped that by 30 percent. During the 2014-15 fiscal year there were 11,708 building permits issued in Nashville (also a record) worth a total of $2,437,788,885. To put it another way, this means that every business day averaged 47 new building permits worth $9.75 million.

I'd be curious to see what those figures are for the surrounding counties, particularly Williamson, Rutherford, Wilson, and Sumner.

Another Nashville record: $2,437,788,885 worth of building permits - Nashville Business Journal
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Old 07-02-2015, 12:37 AM
 
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So I'm hearing two conflicting points of view. Some saying that the smaller unit buildings are the way to go because the others and overpriced and also would match everything else coming on the market (and therefore dangerous). Some saying that it'll be hard to rent outside the shiny new ones.

I'm looking to live in a condo (after 11 years in Brentwood) because I want a shorter commute to Music Row area (it's been getting worse and worse) and I want low maintenance because I take a lot of vacations and travel. Please someone suggest one that can be renovated...

That being said, I'd like to invest also in a rental condo but it's not a good time for the shiny new ones. Anyone recommend an old one that could return positive cash?
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Old 07-02-2015, 01:15 AM
 
Location: Franklin, TN
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The problem is availability. I'd be happy to suggest something if I knew something was available. Like I said earlier, the occupancy rate downtown is 99%. It's pretty much beggars can't be choosers at this point.



Also....speaking of Music Row, that and Midtown would be great places to own land parcels right now.
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Old 07-10-2015, 06:36 PM
 
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Crosland Southeast, the same developer who built Providence in Mount Juliet, has announced plans to redevelop the old Bellevue Mall. Based in Charlotte NC, Crosland plans to spend $200 million to replace the mall with an outdoor lifestyle center that will include a Sprouts grocery store, a 12-14 screen Carmike cinema, a 120-room hotel, 330 apartments, 360,000 square feet of office space and 400,000 square feet of retail. If Metro approves Crosland's request for $2.8 million in public aid, demolition of the old mall will begin in 60 days.

New look: $200M overhaul aims to revive Bellevue Center - Nashville Business Journal
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Old 07-10-2015, 10:31 PM
 
256 posts, read 482,108 times
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Originally Posted by JMT View Post
Crosland Southeast, the same developer who built Providence in Mount Juliet, has announced plans to redevelop the old Bellevue Mall. Based in Charlotte NC, Crosland plans to spend $200 million to replace the mall with an outdoor lifestyle center that will include a Sprouts grocery store, a 12-14 screen Carmike cinema, a 120-room hotel, 330 apartments, 360,000 square feet of office space and 400,000 square feet of retail. If Metro approves Crosland's request for $2.8 million in public aid, demolition of the old mall will begin in 60 days.

New look: $200M overhaul aims to revive Bellevue Center - Nashville Business Journal
Interesting project. Bellevue needs a break that for sure. I imagine Metro will end up finding the 2.8 large to get this project kicked off.
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Old 07-13-2015, 07:28 AM
 
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Exports from Nashville have increased 10 percent over last year to $9.6 billion. This is the fourth year in a row that exports from Nashville have set new records.

Nashville sets new export record - Nashville Business Journal
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Old 07-15-2015, 08:27 AM
 
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The new riverfront amphitheater downtown is just about finished. It looks great, and there's already a long list of concerts lined up for the next few months: Eric Church, Chicago, Jackson Browne, Hall and Oates, Counting Crows, Smashing Pumpkins, Peter Frampton, and more.

Check out this photo thread:

Slideshow: Take a sneak peek at downtown's new Ascend Amphitheater - Nashville Business Journal
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