Where are all these people coming from?

[Onyte9]

I have just one question. With all of this urban high density development, where in the world are all these people coming from to consistently purchase these highend condos? And how long can it last? I know right now not too many are completed but I do know theyre selling like hot cakes. Sprawl has to slow down once all of these condos are completed. It seems like suburban realestate may be on a serious decline very soon. It just seem that with all of the new down town condos, all of the infill, and the huge suburban developments that davidson co population would have to be a great bit more than people might have first estimated.

[Hankster]

I have just one question. With all of this urban high density development, where in the world are all these people coming from to consistently purchase these highend condos? And how long can it last? I know right now not too many are completed but I do know theyre selling like hot cakes. Sprawl has to slow down once all of these condos are completed. It seems like suburban realestate may be on a serious decline very soon. It just seem that with all of the new down town condos, all of the infill, and the huge suburban developments that davidson co population would have to be a great bit more than people might have first estimated.

These are all good questions for which I have no sure answer. First of all there obviously was a tremendous pent up demand for urban housing in Nashville that had not been filled for years. Urban living seems to have been "rediscovered" all over the country. What's happening in Nashville is NOT unique. It's suddenly become cool and fashionable to move back into the city. The suburbs are NOT as attractive as they used to be to many potential buyers. All of these factors have contributed to this urban housing explosion. I have no idea whether the construction pace is beginning to equal demand or not. My gut feeling is ....no. I think there still is room for a little more buildup in the pace of new urban housing coming on stream. However, once the pent up demand begins to be satisfied the pace of new housing coming on stream will probably have to slow down. When will this happen? That's anybody's guess. Personally, I hope that doesn't happen for a long time. The more people living downtown, midtown, and in other Nashville urban areas the better, IMO. I really like what's happening now. It's been incredibly long in coming and is long overdue.

As for sprawl, you would think this trend should reduce the rate of expansion some. Still I see no end in it. However, if this trend back to urban livings grows farther than I think it can, it could really have a serious effect on limiting suburban sprawl. For that, we can only hope.

[FutureArchitect]

I have a very close friend who is a realtor in Atlanta and he said the condo market is saturated in Atlanta right now. The supply is much much higher than the demand and that people who are buying these units as investment property are definitely losing. In essence, I hope the developers in Nashville take their time and don't saturate the market.

He also said that the turnover rate for high-rise condos is extremely high. Most people that buy into these developments usually do not stay long because they lose their privacy and realize it

[it's just dave]

That's a very good point, FA. Hopefully, we're still at the early stages and as Nashville often does, we take our time. Might actually pay to take things easy. Doesn't seem like we are, but when compared to the pace in Atlanta...well, I guess we can't really compare. Hopefully, all the street amenities and such will fall into place to make the urban living experience pleasing and such that people will want to stay a long, long time. Using Atlanta as a gauge, I guess we'll always be a small town. I hope we don't destroy that by moving too fast.

[bzorch]

I think Hankster is correct that there is pent up demand, but it does make you wonder how so much can happen so fast. Here is some recently published information. I can not get to the Downtown Partnerships report directly, though I found a City Paper article that summarizes it. I will keep trying. If anyone else can get to it please post. This is the link

Link to Housing Initiative 2005 Report (Not working at the moment, Try Later)

I was talking to someone today that knows someone who is moving it to the Viridian. They mentioned that many of the units were purchased by investors. I think this is happening a lot. How can you stop someone from purchasing it and then flipping it? I know the developers say they only allow so many units to be purchased for investment. I would love to hear ways to stop this. I think it will be interesting how many units go up for sale once the Viridian opens. It will be one of the first test.

Nashville Downtown Living Initiative

Link to Report

[NewTowner]

Rising fuel prices will turn suburban EVERYTHING into a financial nightmare, and a lot of people know this. People who live in skyscrapers might suffer from punishing Homeowner's Association fees in order to keep the elevators pumping in power-hungry high-rises, but they will still be better off than folks who have to burn imported fossil fuels in order to participate in daily life--and anyway, the developers don't care about energy price projections for the next eight years. They care about the next eight months, period.

Downtown property in most places, Tampa or otherwise, is the only kind of property worth buying in the long-term, because it exists in the context of walkable neighborhoods with the infrastructure necessary to create and sustain local economies.

The "flipping" of high-end units not only reminds me of the entire Museum "Plaza" project, but also strikes me as very American way of making money, a "get rich quick" scheme that will eventually crash, taking a lot of naive but possibly really nice people with it. In the end, however, this sort of financial parasitism will not define the long-term financial prospects of downtown Nashville.

This is not a fad, folks. This is the slow return of common sense, plus skyscrapers.

[cdub]

I too agree that this is a long term change that we are heading toward, but for the time being, does the fact that so many units are being bought by investors creating a false sense of what the market really is like?? The numbers from the ERA report seem generous and I'd love to see all that construction happen, but are we saturating the market too early on?

I guess we'll find out as soon as the Viridian is complete and see how many units pop up for sale and if they resale. It was an interesting point that many high-rise units have a relatively high turnover rate. Socially, I agree that these towers will end up feeling like a dorm/ hotel. Bzorch's post in the Skyscraper thread lists the maximum number of units to create a cohesive community at 150, I think. These towers and the large number of units they provide can't provide the intimate, community feel that a smaller development would provide. That attests to the fact in Atlanta there is high turnover.

I previously lived downtown on 2nd Ave in the Quarters when it was apartments. There were 32 total units and I thought that size was perfect. It was just big enough where you may not know everyone, but also small enough where you could. Many people buy into the high-rise community for the fad or the views, but once the newness wears off is there more to the community to keep people invested that typology?

[jice]

This may be way out there... I dunno. But... I wonder if say... the newness wears off from living in Signature Tower... and lots of units become available down the road. Would it be possible to convert at least a portion of it into a hotel or office space? Who knows... this is just an idea. But if that were to happen... it would create even more jobs downtown and even more demand for condos, etc.

I really don't know who would want to live in the same building they work in though

[barakat]

There will always be people who prefer the suburbs, and I don't forsee growth in places like Murfreesboro slowing down any time soon. Even with the increased condo construction around America's downtowns, I still think the suburbs will draw more people. A lot of it has to do with quality of schools and family-oriented services. And the perception of crime and vice. I won't be leaving downtown for a long time though, even if I do have kids.

[bwithers1]

I really wouldn't worry too much at this point. Even with all of the buildings going downtown, there are only a couple of thousand units as of now in the high- and mid-rises. That's really not many for a city that tops the relocation list. Most people who are buying (or even renting) in a high-rise are not in the market for a single-family house with a yard, at least not at that point in their life. There are plusses and minuses to both housing types. As long as lenders require a certain amount of presales before giving the go-ahead for construction, most buildings should be fine. Even if most of these units were bought purely for investment, as long as lenders require maybe 50% presale levels for the next building to go up, then either more investors would have to commit to buying or the demand would have to exist in the market. If investors get themselves into some trouble, that's their problem. If there is vacancy for a while, the developers will struggle but the places will fill eventually. Keep in mind that the condo associations can also come up with guidelines for renting properties in the building and maintaining reasonable living conditions (or not, as the case may be, but that is life.) Really, I think that the only real risk is for people trying to sell at a later date if perhaps their once-awsome view gets blocked by another, taller building with better amenities or if the market does get so saturated that values remain flat for a while. I'm still not too concerned. It sounds like Tony G., at least, is really honing in on his market before building, which is prudent. It is also encouraging that he includes civic and design concerns in his plans! Let's hope that other developers do the same.

[Dale]

On the other hand, what's the population of Nashville city proper ? Half-a-million ? That being the case, if only 2% of Nashvillians decide they want to live downtown, that's 5,000 right there.

[cdub]

There will always be people who prefer the suburbs, and I don't forsee growth in places like Murfreesboro slowing down any time soon. Even with the increased condo construction around America's downtowns, I still think the suburbs will draw more people. A lot of it has to do with quality of schools and family-oriented services. And the perception of crime and vice. I won't be leaving downtown for a long time though, even if I do have kids.

Do you have a wife? If you don't, never say never. Mine's what pulled me from downtown, though I didn't get too far (East Nashville).

There always is going to be a draw to the single family dwelling, after all, it is the American Ideal. I don't have a problem with the single family model, but the way the current developments take shape. Urban developments do have a long way to catch up in terms of offering open space amenities, schools, and retail opportunities before the downtown area really takes off. The open space and lack of a grocery were two of my peeves while living downtown.

It will be interesting to see how developers/ the city look at open space for the SoBro and Gulch areas in the future.

[rocky top buzz]

IF you lived in the Viridian and had kids, what public schools would your kids be zoned for? Other than Magnet schools, are there any public or private schools inside the downtown interstate loop? I don't think there are, and that might be one big drawback to living downtown with a family, particularly in the MDHA condos.

[fieldmarshaldj]

On the other hand, what's the population of Nashville city proper ? Half-a-million ? That being the case, if only 2% of Nashvillians decide they want to live downtown, that's 5,000 right there.

2% would be in the vicinity of 12,000 (600k+ county population), not 5,000.

[NewTowner]

Downtown needs schools, and will get them. Chattanooga recently built some new schools--including an Elementary School--in their downtown, and they have been screaming success stories.

[Dale]

2% would be in the vicinity of 12,000 (600k+ county population), not 5,000.

Then I rest my case. Nashville's not in danger of overbuilding.

[smeagolsfree]

I guess I will throw my 2 cents in.

One thing you may be overlooking is the fact that the population of TN is growing by 1.2% a year and that is higher in the Metro Nashville area. So there will be demand from new residents moving to the area and especially downtown if they work downtown. Another point is that Atlanta and other cities have had an urban population core long before Nashville and have 20 years of growth. No wonder they may be becoming saturated. Nashville is playing the catch up game and many people who wanted that option several years ago are just now able to have some viable housing opportunities downtown.

My question to you is when will the burbs be overbuilt. There are subdivisions going up in every county in the area and as soon as a home is built then it is occupied. The downtown growth may in fact some of the urban housing growth.

This is just some food for thought and my opinions only, but I do agree at some point, the housing market downtown will become saturated but I do not think we are there yet.

[Guest]

Family life is great downtown. We have two boys and they have a great time. Playing and swimming at the Y, making art in the children's area of the Frist, walking to see the hockey or football. Heck just walking downtown they find a million and one things to climb and jump off. As for the schools the core is zoned Eakin, West End and Hillsboro High, not bad. We have ours in Catholic School so we would be driving them up 21st regardless.

[Hankster]

Downtown needs schools, and will get them. Chattanooga recently built some new schools--including an Elementary School--in their downtown, and they have been screaming success stories.

This is very true. If enough people move downtown, then the need for news schools to be built there will arise. Chattanooga built this school downtown in 2002 and it has been a great sucess.

Brown and Battle Academies - Two neighborhood based magnet elementary schools opened 2002

[ATLBrain]

I recall a study I read about fairly recently that gave a conservative estimate of the demand for downtown (not including West End) residential units at 600 per year for the next 7 years. It concluded that any prediction beyond that is pointless, but gave many reasons to believe the population/demand would actually go up from there.

[ATLBrain]

One BIG reason for the demand is that so many baby boomers are now reaching their 60s and for the next decade or so, they'll be looking to downsize. At the same time, many of them are looking for walkable neighborhoods with access to cultural amenities. With all the money those folks have, then it all adds up to strong demand for downtown living. Of course, hi-rise is very popular with this group. I recall Giarratana saying that his Viridian had to revise its offerings/mix of floor plans to appeal to the empty nesters.

Plus, the Adelicia developer made a great comment. He said that people who are moving from bigger houses to smaller condos are still looking for lots of open space.

In addition to the population growth of the metro (quickly approaching 3% per year at this point), the whole state is now seeing an increasing in-migration similar to what other southern states have been seeing for 15-20 years. Additionally, with all the new companies about to move into the area with over 8500 jobs, there's going to be even more strong demand... even if they'll all be working in Franklin (LOL).