Urban Nashville real estate is hot on the radar screen in the United States.  Not just fcommerce.  People are moving into new residential Nashville real estate, especially condos and lofts.  They are coming for the urban experience (60%), being close to work (51%), and arts, cultural and sporting events (43%).  And development of the residential landscape of Nashville real estate throughout Hope Gardens, North Capitol, Core, The Gulch, Sobro, Rutledge Hill, and Rolling Mill Hill is hard-pressed to keep up with the demand.

Understandably.  Most Nashville real estate is new.  And that’s because of an old law on the books that used to prohibit residential areas in downtown.  Peer cities such as Charlotte and Indianapolis already have a much larger residential base.  Another interesting fact about the downtown Nashville real estate is that right now over half of the interest is in ownership versus only 17% in 2004.  That rate is expected to climb to 68% by 2010.

Extrapolating from the 2007 Downtown Residential Report just released by the Nashville Downtown Partnership, the demand for residential units downtown continues to be strong.  Even with 1,180 units currently under construction, another 807 taking reservations or contracts and 1,191 planned, the report concludes that downtown Nashville could absorb an additional 1,115 units by 2010.

The report also describes the need for additional workforce housing in the downtown market.  To address the need, the Metropolitan Development and Housing Agency (MDHA) has offered Tax Incremental Financing (TIF) to residential developments that offer 20% of the units at or below 80% of the area median income.  That’s about $39,400 for a two-person household.  This incentive is included in development agreements for twelve downtown residential projects.  But the market potential is creating a greater demand spurring the Downtown Partnership to look for more ways to promote affordable housing.

The results of the annual LIVE IT UP! Downtown Home Tour underscores the growing interest in living downtown.  The 2004 tour attracted over 700 people, with an economic impact of $5.7 million in sales and leases; in 2007, over 1,400 people came downtown resulting in $16.8 million of sales including 28 units sold and 8 leases.

Based on demographic and marketplace trends and the history of the residential zoning downtown, the $3.3 billion in public and private funds invested since 2000 is promoting a graceful residential growth.  As the city, the developers, and the designers work together to enhance the culture and class of the downtown area, more people are certain to take note.  They won’t be able to miss the new Signature Tower, which is planned to be the tallest tower outside of Chicago and New York City.

Just catching up to the pent-up demand for penthouses?

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