Outside influences driving real estate market in Middle Tennessee

NASHVILLE, Tenn. (WKRN) — Owning a home is the greatest vehicle toward personal wealth, but to play in this market, you’ll have to pay.

Evolving factors right now are real estate investment trusts and I-buyers who continue scooping up homes.

“You have to get busy living or get busy dying,” Rob Mitchell, Rutherford County Property Assessor said, quoting one of his favorite movies, Shawshank Redemption.

It’s no secret Middle Tennessee is alive and well, which is why we have so many outsiders looking in.

Mitchell said about one in 10 residential properties in Rutherford County is owned by a Real Estate Investment Trusts (REIT), which is an outside investor.

In certain neighborhoods, these REITs own 30 to 40 percent of the housing stock, Ken Chilton said, an associate professor at Tennessee State University.

Their main concentration is the I-24 corridor from Antioch through Murfreesboro, Thompson Station and Spring Hill.

“They are looking for specific homes to buy. They’re looking for the ones that are going to turn around and rent out around the $2,000 mark, you know. So the houses priced over 600-700 are not the ones getting snatched up by the outside investment companies,” said Kate Goeringer, a realtor at Brick Realty.

The ones that are, Goeringer added, sit around $250,000 to $350,000 with three beds, two baths.

“The unfortunate part of this is that the people they are renting to would have been the ones buying them,” she said.

These REITs, even I-buyers, use algorithms to find homes; they do so quickly and pay with cash, often outbidding the average buyers.

“They [i-buyers] come in and make these great offers before they even hit the market, then they turn around and they’re slapping $100,000 on it and putting it on the market in 30 days,” Goeringer said.

These companies are part of the reason Nashville real estate is breaking records, with the median sales price reaching a new high of $430,000, according to RE/MAX, up more than 20 percent over last year.

Greater Nashville homes are also selling the fastest in the United States.

“They now have enough influence on the market that they can actually impact the market themselves much like the Hunt brothers did with silver back in the 1980s, where they would buy so much that their buying of the commodity actually drove up,” Mitchell said. .

In turn, inventory drops, now down 20% over last year.

“This creates scarcity in the market and scarcity combined with demand – because people are moving to Tennessee in droves – is driving up residential property values,” Mitchell said.

Most of this comes from outside influence. Those with deep pockets are steering the market, driving Nashville natives away from their home.

“It’s a scary time for people that want to buy a home because people have to have places to live and it’s becoming the only option if you want to have a place to live in you have to be a renter and that’s sad because its robbing future wealth for families,” Mitchell said.

Killing the dynamic of the American dream.

If you were wondering: yes, this is legal. If there’s a contract between a willing seller and a willing buyer, then there’s nothing you can do about it.

Some HOA’s have attempted or are attempting to limit the growth of investors in their communities.


Nashville’s explosive growth and rising real estate prices are due in part to outside influence. News 2 shows you how investors from around the world are shaping the area with our special reports Outside Influence.

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