Nashville has become a city of construction cranes, a place where tall condos have uprooted one-story buildings and where neighborhoods once avoided are today the prize of developers.
Now, the red-hot real estate market is expected to lead to a “historic increase” in property values during the next reappraisal.
Davidson County Property Assessor George Rooker Jr. is estimating an average increase in residential property values of between 33 and 37 percent when Metro’s next property reappraisal comes in 2017. Appreciation varies by neighborhood, with rapidly developing communities — Inglewood, 12South and The Nations, for example — seeing the largest bumps in property values.
The city’s last appraisal in 2013 was a 5.3 percent increase over 2009.
The anticipated increase would mark Nashville’s single-largest spike in property values since the state of Tennessee in 1989 started requiring municipalities to reassess the value of properties every four years. The current record for Nashville is 33 percent from 1993 to 1997.
Properties are appraised by taking into account property sales on a neighborhood-to-neighborhood basis. According to the assessor’s office, Nashville’s median sale price for a single-family home in 2015 is $217,900, up from $183,000 last year.
Nashville’s average home value has increased more over the past year than virtually all its peer cities, Rooker said, including Charlotte, N.C.; St. Louis; Indianapolis; Memphis; Louisville, Ky., and Jacksonville, Fla.
The increase in Nashville’s land values doesn’t equate to a countywide hike in property taxes, but the tax burden will likely go up for neighborhoods with the largest appreciation after the 2017 reappraisal.
By state law, Metro will still collect the same amount in property tax revenue after the 2017 reappraisal because of an automatic adjustment of the county’s tax rate. Metro’s last property tax increase came under former Mayor Karl Dean in 2012.
The biggest increases in property values have occurred in older, gentrifying neighborhoods near Nashville’s urban core. Some of the biggest spikes remain in places such as Sylvan Park, Belmont-Hillsboro and East Nashville’s Five Points area — all which emerged as real estate hot spots a decade ago or longer.
But these aren’t the top hot spots anymore.
Instead, neighborhoods with the greatest property value increases are places that have become popular destinations in more recent years: Inglewood leads the way followed by Cleveland Park and other East Nashville neighborhoods west of Gallatin Pike. The next largest increases are properties in The Nations in West Nashville, as well as 12South and Wedgewood-Houston near the Metro-owned fairgrounds.
All 35 Metro Council districts have seen property values increase, with the lowest increases being parts of Neely’s Bend and Madison, North Nashville, Joelton and Goodlettsville.
The top property value increases from 2013 through this year by Metro Council district are:
- District 7, which includes East Nashville’s Inglewood — 27.2 percent (median sales price of single-family home: $230,000)
- District 5, East Nashville’s Cleveland Park, west side of Gallatin Pike — 25.6 percent (median sales price of single-family home: $200,000)
- District 17, 12South and Wedgewood Houston — 23.8 percent (median sales price of single-family home: $439,500)
- District 20, The Nations and parts of West Nashville — 22.9 percent (median sales price of single-family home: $189,950)
- District 6, East Nashville’s Lockeland Springs, Edgefield, Five Points — 21.9 percent. (median sales price of single-family home: $304,600)
Each of these percentages is expected to approach 40 percent by the time Davidson County’s reappraisal comes in 2017. Despite increases in these districts, by far the highest property values and median sales prices for homes remain in parts of Forest Hills, Green Hills, Belle Meade and the Vanderbilt area.
Article originally published in The Tennessean