Nashville Makes Zillow’s Sweetest List for Buyers
Nashville is the second “sweetest” city in the nation for potential home buyers, according to a new report from Zillow that measures the strength of metro areas’ housing and labor markets.
Economists at the real estate database company analyzed data from the 100 largest U.S. metros and ranked them in their quarterly list of sweet spots for homeownership. Nashville was the runner-up, just after first-place San Antonio.
Nashville’s housing market is the third-hottest in the country, according to a new report.
The rankings were based on three factors: income growth, employment growth, and the so-called breakeven horizon.
That last category is a measure of the time it would take for a person to remain in a home before the accumulated costs of renting exceed those of homeownership. According to the report, the national average breakeven horizon is 1 year and 8 months; Nashville’s horizon is a bit shorter at 1 year and 5 months.
Music City’s strong year-over-year income and employment growth — 1.8 percent and 3.7 percent, respectively — combined with steady home value appreciation give homeowners an advantage over renters in a relatively short time.
The top ten cities on the list are:
“All places on this list are great for those looking to buy a home and settle down,” said Zillow Chief Economist Dr. Svenja Gudell in a news release. “Not only do they have a strong labor market, but a home purchase in these markets makes a lot of financial sense.”
Gudell cautioned that the ranking assumes a potential homebuyer can qualify for a mortgage and afford the down payment in his or her local market, which may become more difficult as home prices climb.
According to the Greater Nashville Association of Realtors, the media price for a single-family home sold in the Nashville area last month stood at $258,900, up 10.8 percent from a year ago.
Zillow expects local home values to rise by 4 percent in the next 12 months.
Nashville’s short breakeven horizon is consistent with national housing trends, which now favor homeownership over renting — for those who can afford to buy. The Zillow analysis revealed that buyers will come out ahead of renters inside of two years in 72 of the largest 100 metro markets.
In Nashville, as in many of the other cities in Zillow’s top 10, breakeven horizons remain below the national average because of falling home price-to-rent ratios and a boost in expected home value appreciation.
Original Source: Nashville Shines on Zillow’s List of Sweetest