Chelsea Fitzgerald-Dole really likes living in Nashville, Tennessee.
“I fell in love with the city,” she says. “I’ve met so many incredible people.”
“The food scene is awesome,” her husband, Kevin Dole, chimes in. “The music scene is unparalleled. It’s a really fun city to be in.”
Less fun is that the couple has been crammed into a small two-bedroom condo they bought in 2018. Working remotely has made it only harder.
Kevin is a musician on the side, and his drum set is in the middle of the living space. Chelsea says, “I have recently invested in a great pair of noise-canceling headphones. That has been super-helpful.”
The couple desperately wants more space. So the two are planning to move away from this city they love because they can’t afford a bigger house there. Prices have just risen too much.
“Everything around us has just exploded,” Kevin says.
Nashville is one of many formerly affordable cities that have drawn remote workers and retirees from higher-cost places such as New York and California during the coronavirus pandemic. Tech companies including TikTok and Oracle are opening offices there, creating new jobs. All that has pushed up prices.
“Nashville is like raging on fire … very, very strong house price growth,” says Mark Zandi, the chief economist at Moody’s Analytics. He says during the past two years of the pandemic, prices there are up a whopping 45%.
And it’s not just Nashville. Prices all over the U.S. have been rising astronomically.Boise, Phoenix, Austin and Miami have been particularly hot. But prices are up sharply pretty much everywhere. Moody’s home price index shows a 32% rise in prices nationally over the past two years. The National Association of Realtors reports an even bigger increase of 39%.
In the run-up to the housing bubble that occurred 15 years ago, prices rose faster than normal too, before the bottom fell out, causing the worst housing crash and overall recession in generations.
So, what’s going to happen this time around?
“I believe that it is a bubble,” says Kevin. “I just don’t know when it’s going to burst.” Chelsea says the increase in prices doesn’t feel normal.