I want to offer a quick glimpse into the real estate market in Tennessee in 2021, specifically in Greater Nashville, for folks that may be looking to move here and would like to know more about life here and what types of things you should look for in a new home. My name is Joshua Smith with Home Agent Group of Benchmark Realty in Tennessee and today we’re going to cover a few different topics for those of you thinking of moving to the Nashville area in 2021.
What to know about taxes and residency in Tennessee
If you’re looking to move here full-time, residency is a no-brainer. You just buy a place here, change your address with the post office, get your utilities setup, and change over your driver’s license, plus all the other normal things you would need to do to move and become a resident of a place. But if you’re looking to own a home here, and be a non-resident, there are certain things you may need to look into, or at least make yourself aware of because there are certain expectations for tax purposes of home ownership in the state. The only income tax in the state is an antiquated 1% on the first chunk of money that residents make, but that’s actually being phased out in 2021 so there will be NO income tax in Tennessee going forward. But our real estate taxes in Davidson county did take a pretty big hike from last year. It’s still lower than other places, but worth knowing about for the property you intend to buy.
Why move to Nashville Tennessee? What’s the hub-bub all about?
Nashville is an “it” city. We are in high demand as a tourist destination, so our economy is getting stronger by the day. Of course that did take a big hit with the pandemic, like anywhere else, but the other thing that we have to our advantage is a stronghold in healthcare and other industries. HCA is based here, Vanderbilt is a huge institution here in both healthcare and education and research, and there are plenty of other major examples of big industry in this part of the state. But we also have some major sports franchises, and though live entertainment has taken a pause in many ways at the current time, Nashville is still the music capital of the world, and will always be a beacon for the entertainment industry.
Nashville isn’t perfect.
We have our goods and bads like any place. In fact, there are many growing pains and challenges we face in terms of traffic, public transportation and infrastructure issues to name a few. But that’s not the end of the world if it takes an extra 10 mins to get to your favorite hot chicken spot, if when you leave 30 mins later, the traffic has already died down.
Where in Nashville do you want to live?
If you’re not being transferred for work, or have a specific place in mind to be close to family or friends, you probably have no idea where to even begin your search. There are job opportunities all over the place, so if you’re not tied down to a neighborhood before you come, definitely have a good look around. We have everything from rural towns to downtown, and within an hour there are a few city centers. Downtown Nashville has great city-living options, there are suburbs around town that have more chain-style dining options, and some that have more unique or boutique restaurants and shops. You can live on a 14 acre farm in White’s Creek and be in the city in under 20 minutes. It all really depends on what type of lifestyle you’re looking for.
So come visit, but don’t just spend all your time in the tourist spots.
Vacationing isn’t the same as living here. You want to go visit places that you can imagine yourself going for lunch on any given day of the week, stay long enough that you have to go grocery shopping so you can invest time in finding a store where you would normally shop. If you’re coming from the west coast, I have a lot of LA clients, we only have one Trader Joe’s, and it’s in Green Hills. That’s a super nice part of the city, but it’s also extremely congested and where that might make you feel at home like West Hollywood, it’s not that way everywhere in Nashville.
When should you move?
Tennessee is a seasonal state, but the tourism in Nashville is year-round. It used to be that you could rely on a little less traffic in the summers or even during winter break, following the school year, but that’s all changed. So in terms of fighting less traffic, or being first to get to a house, your best bet is to follow the market. In which case, we need to talk a little bit about market trends.
Real Estate Market
So what’s the real estate market doing in Nashville at different times of the year? We do see fluctuations in inventory and prices during certain times of the year. We see peak buying typically in the springtime, starting in an upward trend around March, and not leveling back out until after tax season, all the way until school starts in the mid to late summer. But the “when” really depends on when you’re ready to move, which is dependent on how you plan to purchase.
So, how do you move to Nashville?
While every scenario is different, there are a couple situations I run into quite often, so I’ll cover those now and hopefully that’ll answer the majority of your questions.
If you’re a family wanting to move here for the start of the 2021 school year. The main thing to point out is that some schools start as early as mid-August here, so you’ll want to start your home search as early as May-June to ensure you have enough time to settle and of course are able to get into the school of your choosing. Some schools have restrictions on how long you will need to have been a resident, so you want to plan for all those factors and look at what each school in the areas where you’re looking may require.
Do you have a house to sell in your current state? If you need to sell that house in order to have the money for your next purchase, you will want to talk to a local professional to help you sell that house first, but if you need a referral I’d be happy to help you find one. Also, set aside some time to come visit the place you’re wanting to move to. This will require some preparation and planning, but the goal here is to get to know the new area and your agent here, which will ultimately help your out of state sale go more smoothly, and may also allow you to get under contract on your new home in Nashville. You could have a remote closing for one or the other, and even close on the same day.
I can’t stress enough that you want to focus on the house you need to sell first, if you need that money to buy your new house. Focus your time and energy on that sale and make sure that it goes through smoothly before you even start your house hunt. I know it’s stressful to imagine having to find a house in a brand new place, but once you get here it’ll get much easier once you arrive and can see the houses and the neighborhoods around town.
If you’re an individual or family with no specific timeframe or school requirements, maybe even unsure about whether to buy or rent, you may be in a more flexible situation overall, but that doesn’t necessarily mean that you need to plan less. If you don’t have a job lined up where you want to move, you will want to have several months of savings in place prior to moving so you can have ample time to search and vet job and school options. But also because, as a short term renter, or a renter with no income (at least for the time being) you’re a high risk renter, and that can make finding a place to stay more difficult.
Remember that Nashville is a big town, sprawled out and made of many smaller suburbs and cities, each with its own local economy. So schools and jobs really do vary greatly by the zip code here.
Wanting to purchase a home here, without becoming a resident? This is a great place to have a vacation rental, or a place that you might rent during the summer, and come and stay during the winter. Our winters are milder, after all, than the midwest or northern states. So for this instance something to look for might be a community or HOA that requires minimal maintenance on the outside of the property. Zero lot line townhouses, or condos, even homes that are on one of our lakes with no real yard to maintain would all be good options for someone like this. But, our HOAs may be higher than your used to, and the bylaws may restrict your ability to rent the place out while away – at least for short-term use, like an AIRBNB or VRBO. Many neighborhoods here have begun to tighten the regulations around those types of permits because this investment property type has become fairly popular since Nashville is such a hot vacation spot these days.
Moving can be very stressful, especially to another state. I hope this has been helpful for you to answer some questions, and if you’re thinking of moving to Tennessee, especially anywhere in middle Tennessee around Nashville, I hope you’ll give me a call! Thanks for watching and I’ll see you next time.