I believe the housing market is topping. Nashville is the hottest city in the States. It is the “It City”, crowned in 2013 by none other than the New York Times themselves.
A few months ago I was driving for uber (Disclaimer: I do not need the money but when you can make $15 driving home from my job to downtown why not?) and I picked up this guy at some new apartments downtown and we got to talking. He mentioned that they did not raise his rent this year (6 months ago). I thought it was interesting. They had raised rent in 2014, 2015, and didn’t in 2016, and he was happy because he wasn’t making anymore on his salary.
Flash forward to today and there are now 23 cranes in the sky downtown and new apartments and condos on every corner (some just breaking ground). Nashville is (was) the fastest growing city in America. Nashville is “only going to grow”, is what people are saying. Euphoria much?
Let’s look at the housing market $XHB
It has not gone ANYWHERE since early 2014, almost 3 years. In fact, it appears to be putting in 3 major lower highs and IF it breaks below the trend line could be putting in a major top. I think this chart looks gross and housing is one of my least favorite sectors in 2017. GROSS.
Now back to Nashville, I moved in a new apartment and we got 1 month free, which was great news. Then 3 months later they are giving away 2 months free. We then break our lease and resign with the same complex 5 floors up for the same price and an extra month free. This got me thinking hard.
Are they having trouble filling all of these new apartments? I understand that the owners and leasers need to have a certain percentage filled as quickly as possible, so there will be some deals on the table.
However, if they could fill them without offering perks, wouldn’t they? If they could only offer 1 month instead of 2, or 3, wouldn’t they? I think so. Giving someone 25% off an entire year for free just to fill the place does not sound like they have plenty of people to rent to in my opinion. Currently there are too many luxury apartments going up, and some haven’t even started. They are on every corner and quite frankly the people who live here do not make enough money for the price it costs for these.
Every Luxury apartment is starting to feel the effects. I am NOT saying the housing market is going to crash again. I AM saying the housing market is SLOWING and that I believe you can wait through 2017 and buy a house in Nashville cheaper than you can right now, or most places for that matter. If you own one and are planning to for 5-10 years then quit reading, you will probably be fine.
If you are looking for a house, wait. I think prices will come back to you. Prices don’t go straight up in a straight line forever like the media will have you believe, that is the emotion speaking. That is why everyone is buying this Post Election move after the fact and buying Dow20K right now. It’s going to come back.
For the time being, take a look at all of the Captions below of different apartment website front pages. It looks like they are begging people to lease with them in my opinion. And these were only the ones we passed and looked up on the way home today. (8 of them).
The housing sector does not look good in my opinion and I believe it is slowing heavily.