If you know anything about the Southeast US where I live, there’s a couple of big realities from a lifestyle/work perspective:
–Atlanta is the capital
–The Southeast is booming in general
–There’s no hotter market than Nashville, or as I like to call it, #Nashvegas
Since I travel a lot for work, I tend to measure how hot a market is for business, employment and cultural gravity by the general availability/price of hotels in the market. By that measure, Nashville is red hot. It’s hard to find a business class hotel that won’t make you cringe for less than the high $100s or right at/above $200.
That’s a lot. Compare to the market to Atlanta, where great rooms can be found from $110 to $140, and it’s clear that Nashville is booming. Because of the boom over the last decade, inventory on the hotel and housing front hasn’t caught up to the demand yet.
Why is Nashville so hot? Many would tell you that the growth is a function of multiple factors – including a centralized metropolitan government that generally allows the metro to work together (see more about the government setup here), a unique cultural pull with origins in country music (expanding beyond that taste, but still the flagship) and an emerging hipster dufus vibe ITP (inside the perimeter).
Add it all up, and employers have been flocking to Nashville for the last 10-15 years.
But with great growth and a lagging housing market comes a few problems – namely what it costs to live “comfortably” in Nashville. More from the Nashville Business Journal:
“It is obvious that living in Music City is starting to add up, and now a study shows the city has seen the greatest year-over-year cost of living increase in the nation.
Released by financial planning website GoBankingRates, the study compared the change each of city’s cost of living index from Numbeo to GoBankingRates’s metrics for how much annual income it takes to “live comfortably” in a city. For instance, it takes a salary of $70,150 to live comfortably in Nashville today, according to the study.
Local home prices have skyrocketed recently, with the median single-family sales price in Nashville in June of this year at more than $293,000, according to the Greater Nashville Realtors. For comparison, Nashville’s median sales price hit $200,000 for the first time in June of 2013.
Last year, a Nashville Business Journal analysis of wealth data from researcher Esri found the average net worth of Greater Nashville’s most affluent areas had increased by 48 percent, increasing the Greater Nashville’s inequality ratio to 5.7. That means the wealthiest 20 percent of ZIP codes in the region have an average net worth that is 5.7 times larger than the average net worth of the bottom 20 percent. This gap has climbed from an inequality ratio of 4.47 in 2013.”
If you click through and dig in, you’ll find some gems related to how much income you need to live comfortably in Nashville compared to some other cities of note:
Los Angeles – $76,047
Seattle – $75,283
Nashville – $70,150
San Diego – $69,958
Atlanta – $62,184
Dallas – $57,984
Austin – $54,631
Louisville – $48,897
Want some analysis of those numbers? It’s now cheaper to live comfortably in Atlanta than it is in Nashville. Also, if you ruled out the west coast as a professional living in Nashvegas, you might want to look again, because your standard of living is similar to those who live in San Diego, Seattle and yes, Los Angeles.
Of course, you won’t see Dolly Parton pulling through a Jack’s in Seattle like I did in Nashville in 2006.
Final note – Austin is widely thought to be an incredibly hot market with many similarities in cultural pull and hipster vibe to Nashville. If you were buying stock by the measure listed above, you would sell on Nashville and buy Austin.
The market never lies. Nashville’s a great town, but these numbers show it may have heated to the point where it’s going to level off from an employment perspective soon.
This post originally appeared on The HR Capitalist
Author: Kris Dunn