Southern city’s rent prices drop as apartments sit empty and new complexes offer huge incentives to move in
Nashville has always been regarded as the country’s music capital, but in recent years, it has become a major metropolitan hub with many flocking to the Southern city.
Developers rushed to meet the demands, and luxury buildings rose in residential areas outside of downtown Nashville.
However, many of those units are now sitting empty, and housing managers are offering incentives to lure renters.
Tennessee-based realtor with Compass, Sam Gray, told Daily Mail that vacancy rates in Nashville have risen to around 10.6 percent, which is the highest they’ve been in over a decade.
Gray noted that even though rent growth has cooled, the market has yet to collapse. ‘What we are currently observing in Nashville is not a rental collapse; rather, it is a market reset,’ he explained.
‘Rent growth has cooled, primarily affecting newly constructed, high-end buildings that are working to stabilize their occupancy rates.’
As a result, renters may be offered incentives to move in, such as free months in luxury units.
For example, 2010 West End Ave, in downtown Nashville is offering up to two months free for a limited time.
Nashville is seeing a cooling period after luxury rentals started popping up
Vacancy rates in the country’s music capital have now reached over 10 percent, which is the highest it has been in over a decade
The luxury building has studios available starting at $1,620 a month with a pool, fitness center, office spaces, and a rooftop deck.
Modera is offering up to 10 free weeks in its units. Certain restrictions apply, but renters can enjoy the perk if they sign a lease by October 31.
One-bedroom units at Modera start at $2,025 a month, two-bedroom units start at around $2,940, and three-bedroom units start at $3,900 a month.
Rosette Green Hills, a luxury high-rise outside of downtown Nashville, is offering up to two months free on select units.
The average rent price in the city is around $1,676 a month for a one-bedroom, according to Apartments.com, while data compiled from HUD and Yardi puts the average around $1,587.
Nashville’s rent is on par with the average rent in the US, which is about $1,630 a month. However, the city is still significantly cheaper than other major metropolitan areas.
For comparison, the average price for a one-bedroom in New York is $4,032 a month, and $1,951 for a one-bedroom in Chicago, according to data compiled by Apartments.com.
Gray said that incentives like months of free rent or waived move-in fees were rare a few years ago.
Luxury buildings are now offering incentives, like waived fees and up to three months of free rent to encourage renters
Apartment complexes like Rosette Green Hills (pictured) are offering up to two months free at lease signing on select units
Even though rent has only decreased by about one percent since last year, rent concessions have reduced the total amount of rent paid annually.
‘In the broader context, the market is recalibrating after several years of aggressive rent growth and new construction,’ Gray noted.
As luxury buildings offer more incentives, the rental market may seem more attractive than purchasing a home.
Gray said that the median home price in Nashville is around $486,000, and mortgage rates have been increasing significantly since 2020.
Monthly costs to maintain a home have now surpassed rent in the short term, making it cheaper to rent than to buy.
Redfin rated Nashville’s housing market as ‘somewhat competitive,’ with average homes selling for around 4 percent below listing price.
Despite the cooling rental market, Nashville still has more people moving to the city than leaving, according to Redfin.
Gray noted that an average of 66 people move to the city daily, and Nashville has gained around 136,000 residents since 2020.
Monthly costs to maintain a home has now surpassed the average rent in Nashville
Despite the complex housing market trends, there are still positive migration trends of people moving into Nashville and staying in the city
‘While we are witnessing some selective pressure in the luxury and lease-up segments, it should not be viewed as a sign of weakness; rather, it indicates a normalization of the market,’ he added.
‘The market is taking a breath, and as supply slows later this year, we are likely to see rent growth stabilize as we head into 2026’.
