Renters getting a raw deal in this "It City"

Experts urge first-timers to explore buying
Posted at 5:24 PM, Aug 27, 2019
and last updated 2019-08-27 18:24:07-04

NASHVILLE, Tenn. — Each and every day, new homes are listed for sale in the Nashville area as more people move to town looking for a place to live.

“The real estate market in Nashville right now is absolutely insane,” Stephen Delahoussaye, a real estate affiliate broker with Compass, said.

Companies like Amazon are moving to town, bringing thousands of people with them. With all that growth, people are both renting and buying, and when it comes to buying, many of the homes get snatched up quick.

“As a realtor, you have to be very quick in the Nashville market, because the good ones, they go quickly, and they go with multiple offers on the table,” Delahoussaye explained, adding that the average amount of time for a house to be on the market in Davidson County is just 31 days.

When it comes to the question of whether people should rent or buy, many experts say that buying is a better financial decision.

According to Zillow, the median rent in Nashville is $1,536 per month, whereas the monthly mortgage payment on the median home is only $950. That's a 62% to live in a home or apartment that you don't own.

“It’s a no-brainer right now to purchase, no matter your income level, because if you weren’t going to purchase and you were going to rent, you’ll end up spending more money in the long-run,” Delahoussaye said.

Delahoussaye teaches first-time homebuyer classes, and he said many people are surprised by the numbers.

He’s had numerous clients come to him as first-time homebuyers saying they wish they went for a house earlier rather than continuing to rent.

“They come to me and they say, ‘I finally did the math and realized that I’m spending almost $20,000 a year on a place that I don’t own.’”

This is extremely impactful on professions like education, where the average entry-level teacher in Nashville spends 52.7% of their salary on typical rent, compared to 32.5% on the median mortgage payment.

“Would I rather pay a landlord that money and let them get that appreciation and me have nothing, me actually operating in the negative, or would it be more beneficial for me to jump into something and bet on myself and bet on the fact that we know the growth that’s coming and make some money?” Delahoussaye said.

One of the many things keeping potential homebuyers from making the leap to home-ownership is the loan process. Many think they won’t be approved for a loan based on their credit score or their debt, specifically student loan debt.

Delahoussaye explained that while all debt can impact a potential loan, it isn’t always a deal-breaker.

“The student loans as a whole isn’t necessarily going to affect your debt, it’s what your student loans are divided up by every month,” Delahoussay explained, adding that it doesn’t hurt to see what you could accomplish from a buying perspective if you’re currently renting. “You don’t know until you try. And what I mean by that is I don’t think everyone should just go out and try to buy a house right now, but I do think it’s to everyone’s benefit, whether they’re 20, 30, 40, 50, to talk to a lender, to talk to a real estate professional, and get an idea of what it looks like on the other side.”

WalletHub released its report on 2019’s best real-estate markets on Tuesday and found that Nashville has the 6th healthiest real estate market among large cities.