Nashville, Tennessee Housing Market Forecast for 2021

Recent forecasts for the Nashville, Tennessee housing market in 2021 suggest that home prices will continue to rise for the foreseeable future.

And that’s logical. The Nashville real estate market has been highly competitive over the past year, partly due to an influx of new residents. (More on that in a moment.)

Like many major cities across the U.S., Nashville currently has a low level of homes for sale relative to the demand from buyers. This puts upward pressure on prices and makes the market more competitive overall.

Thinking about buying or selling in this area? Here are the latest Nashville housing market forecasts, predictions and trends, as of early 2021.

Nashville Real Estate Market Forecast for 2021

Home prices in Nashville and the surrounding metro area rose steadily throughout 2020, despite the coronavirus pandemic and economic downturn. There’s a good reason for this trend. Population growth.

In recent years, Tennessee’s most populous city has attracted new residents from all over the country. So there are more buyers in the market today, which tends to boost home prices.

Specifically, the Nashville housing market has gotten a boost from new residents moving in form other metro areas. According to a January 2021 news release from the national real estate company Redfin:

“The Nashville, Atlanta and Austin metros are all perennially on the top 10 list of most popular destinations for users moving from one metro area to another, and the number of people looking to move to each place increased by more than 40% year over year in late 2020.”

So it’s no wonder we’re seeing positive forecasts for the Nashville real estate market in 2021. With a steadily growing population, lured by relatively affordable housing, this market has seen a major increase in demand.

And speaking of those forecasts, a report from December 2020 predicted that home prices and sales would both increase in 2021. They predicted that sales would go up by +3.1% this year, and that prices would climb by +4.8%.

Other analysts have offered even stronger predictions for the Nashville, Tennessee housing market in 2021. It wouldn’t be surprising to see home values in the area rise by more than the forecast above, based on what we saw over the past year or so.

Of course, real estate predictions are an imperfect science. They’re more of an educated guess, really. But it says something when all of the educated “guessers” share the same view. Right now, the general consensus forecast for the Nashville real estate market in 2021 is that home prices will keep rising throughout the year and possibly into 2020.

Nashville Housing Market Expected to ‘Out-perform’

According to some sources, house values in the Nashville area rose faster than the national average during 2020. Looking forward, a group of economists and housing analysts expect that to continue in 2021 as well.

At the end of last year, the property data company Zillow sent a survey to more than 100 economists and real estate experts. Among the questions they asked in that survey: Which metro areas are most likely to outperform the nation in 2021, in terms of home-value growth.

Not surprisingly, the Nashville housing market topped the list.

According to the Zillow survey report:

“A large majority (84%) of those surveyed said home value value growth in Austin would out-perform the national average, compared to just 9% who said they believed it would fare worse. Phoenix came in second with 69%, followed by Nashville (67%), Tampa (60%), and Denver (56%).”

So the prediction here is that the Nashville real estate market will experience a higher degree of home-price appreciation in 2021, compared to the nation as a whole. Again, no surprise. With a steadily growing population and a low level of housing inventory, continued appreciation is the most likely scenario.

The Californians Are Coming … and Buying

The positive forecasts for the Nashville real estate market in 2021 are partly related to an influx of new residents.

Home buyers from pricier California cities, in particular, are flocking to this more affordable market. In fact, a recent report showed showed that Atlanta, Austin and Nashville are three of the top destinations among home buyers relocating out of California.

The rise of remote work, brought on by the coronavirus pandemic, plays a role here as well. An ever-increasing number of people now have the opportunity to telecommute. So they don’t necessarily have to work where their companies are located.

Many Californians — especially those from the tech-heavy San Francisco Bay Area — now have the opportunity to relocate out of their expensive housing markets and into more affordable markets.

Nashville, Tennessee appears to be high on that list.

The city’s current growth trend actually predates the coronavirus pandemic. It became a hip destination nearly a decade ago and has grown steadily since.

Back in May of 2017, the U.S. Census Bureau reported that Nashville had passed Memphis to become the most populated city in Tennessee. From 2010 to 2019, the city’s population grew by 11.6%.

Today, the combined Nashville-Davidson-Murfreesboro-Franklin metropolitan area is home to nearly 2 million people.

Low Inventory and Strong Demand

Positive predictions for the Nashville real estate market in 2021 are largely based on an ongoing imbalance between supply and demand.

There’s plenty of demand in this housing market — but not enough supply.

When a lot of people want a certain thing, but there’s not enough of that thing to go around, the value of said “thing” tends to rise. Economics 101. And that’s the story here as well.

At the start of 2021, the Nashville metro area had about a 1.5-month supply of homes for sale. (Note the all-important decimal in that figure.) That’s well below “normal,” from a historical standpoint. So in terms of inventory, Nashville is more of a seller’s market right now.

According to a December 2020 report from

“Markets that are still seeing the largest decline in newly listed homes include Nashville (-19.9%), Memphis (-18.5%), and Charlotte (-16.0%).”

The message to home buyers is clear. Expect competition. Make a smart offer. And be open-minded when it comes to your desired features and location. That’s how you succeed in a highly competitive market.

Disclaimers: This report contains third-party real estate market forecasts and predictions for Nashville, Tennessee, extending through 2021. Such projections are the equivalent of an educated guess. No one can predict future economic or housing conditions with complete accuracy. Home buyers should conduct plenty of research to get a broad understanding of the local real estate market.