Nashville, Tennessee The Nashville metropolitan area has weathered the current national economic recession better than many other areas of the country, although weakness continues in some sectors. Between 1990 and 1999 nonagricultural employment increased at an average annual rate of 3.7 percent. Since 1999 the rate of increase has slowed considerably. For the two 12-month periods ending in August 2001 and August 2002, the rates of increase over the preceding period were 0.5 percent and 0.6 percent, respectively. Manufacturing employment continues a general downward trend that began in 1995. Employment in this sector dropped by 5.4 percent during 2001. That rate of decline did slow to 1.8 percent during the 12 months ending in August 2002. However, notices of new layoffs are still occurring and additional decreases are possible. The area’s economy will benefit from expansion at the Nissan assembly plant in Smyrna where 2,000 new jobs will be added when the company begins production of the Maxima in 2003. The services and trade sectors grew at average annual rates of 6.2 percent and 3.2 percent during the 1990s but at rates of only 1.2 percent and 0.7 percent, respectively, during the past 12 months. The area was recently hit hard by the closing of retail outlets by stores such as Service Merchandise, Kmart, and Albertson’s. Publix has purchased 7 of 11 Albertson stores and reportedly will replace approximately 700 of the 950 lost jobs. In the months following the September 11, 2001, terrorist attacks business and leisure travel to the area fell, as evidenced by lower hotel occupancy and reduced airline traffic through the Nashville International Airport. The area’s tourism industry now appears to be rebounding with active convention activity reported during August 2002. Led by growth in the area’s suburban counties the population of the Nashville metropolitan area increased by 25 percent during the 1990s to 1,231,311 at the time of the 2000 census. Williamson and Rutherford Counties, to the south and east of Davidson County, grew at rates exceeding 50 percent during the decade and accounted for 44 percent of the metropolitan area’s total population increase. Davidson County accounted for approximately one-fourth of the increase as it grew by 11.6 percent from 510,784 residents in 1990 to 569,891 residents in 2000. The most recent population estimates by the Census Bureau, as of July 1, 2001, indicate continued growth in the suburban counties. A total of 8,196 single-family homes were authorized by building permit in the metropolitan area during the first 9 months of 2002, an increase from the same period in 2001. Data provided by the Middle Tennessee Regional MLS through the Greater Nashville Association of REALTORS® indicate increased sales activity for 2002 compared with 2001. Aided by low interest rates sales for the first three quarters of 2002 were 7 percent higher than during the corresponding period of 2001. The median price for homes sold during September 2002 was $136,500 compared with the year-earlier figure of $134,900, an increase of 1.2 percent. Inventory at the end of September 2002 was 17,444 homes, an increase of 4 percent from September 2001. The average number of days on the market for a singlefamily residence was 90 days. The market for condominium units in the Nashville area is growing as this housing becomes more popular with empty nesters and singles. The Middle Tennessee Regional MLS reports a 10-percent increase in condominium sales during the first 9 months of 2002 compared with the same period of 2001. This follows a 13.7-percent increase last year. The median sales price for condominiums was $113,000 in September 2002. The most popular area for condominium units is reportedly west of downtown near the Vanderbilt University campus, but interest appears to be increasing in other areas to the east. The Nashville Area Habitat for Humanity recently received its largest donation of land ever. Centex Development Company, a real estate firm based in Dallas, donated 43 acres in the Paragon Hills area of Davidson County that will accommodate 141 homes for low-income families. The development will be named Providence Park. Habitat volunteers have built more than 160 homes in the Nashville area since beginning operations in 1985. During the 1990s building permits were issued for an average of 2,000 multifamily units annually in the Nashville metropolitan area. More than two-thirds of the total was issued during the last 4 years of the decade. Since January 1, 2000, a total of 4,379 multifamily units have been permitted in the area, including 844 during the past 12 months. Most of the multifamily activity has been in Davidson and Rutherford Counties. A growing number of multifamily projects in the area are townhouse and condominium developments intended for owner occupancy. Loft developments are also gaining in popularity in the downtown area. These developments include building conversions from other uses and new construction activity for both owner and renter occupancy. The 2002 Greater Nashville Apartment Market Survey indicated an occupancy rate of approximately 92 percent for conventional apartment properties in the Nashville area during the second quarter of 2002, down from 95 percent for 2000 and 93 percent for 2001. The weakened economic environment has led to widespread rent concessions and dampened rent increases. Although there are currently excess vacancies in the available rental inventory, particularly in the suburban counties, conditions have been limited due to the reduced level of new apartment construction activity over the past 2 years.

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