Join the Money Matters Email List
Receive email alerts any time a new podcast episode is released!
Tennessee is Transforming Before Our Eyes, Are We Ready?
You may have heard the news that Oracle is moving its headquarters from Austin TX to Nashville, TN. If you don’t know who Oracle is, they are the third largest software company in the world, and this move could mean 4300 jobs moving to Nashville. This is really big news from a pure numbers’ standpoint. Oracle bought 60 acres near the river, and they are not just building corporate facilities, but also a health clinic, concert venue, and a lake. But this is also big news from a statement standpoint, in other words from a qualitative standpoint. It’s one more instance that validates Nashville as one of the most attractive places in the country to choose to do business and life. One of the reasons that Oracle chose Nashville was because of its concentration of healthcare companies. Oracle works very closely with the healthcare industry and with companies like HCA, Community Health Systems, and Surgery Partners all headquartered in Nashville, it just fits well. But just as important a consideration for Chairman, Larry Ellison was finding a place where employees would want to raise families and a culture, they could engage in that was exciting. Nashville seemed to check all the boxes. So…In case you haven’t noticed, Nashville is booming.
According to the Wall-Street Journal, Nashville has grown from 1.3mm residents in 2000 to roughly 2.1mm in 2023. Real Estate prices have gone up. The median home sales price was $414,000 at the end of February, whereas the average median price nationwide is a little over $327,000. This growth has also presented a real strain on transit infrastructure, so much so that many locals who grew up in the city have moved out to the suburbs. So, this means many of those suburbs have been transformed as well. Mt. Juliet, for example, used to be a sleepy down east of Nashville boasting McDonalds and Cracker Barrel as its main draws. Those who grew up in Mt. Juliet can barely recognize the city now, with farmland being transformed into retail strips and fields becoming shopping centers. Some welcome the growth, and some do not.
But it isn’t just Nashville and the surrounding suburbs that are seeing an influx. According to the Journal, TN has gone from a net migration of 29,000 residents annually in 2010, to 90,000 residents in 2022. This means that 90,000 more people moved into the state of TN from other states. In any poll you look at, TN is in the top 10 fastest growing states per capita in the country, and in some polls the top 5. We are feeling this in West TN. While Middle TN and even East TN have been growing for years, West TN has been growing much more slowly. But with the announcement and construction of the new Ford plant, Blue Oval City, that is changing. Although Memphis and the suburbs on its east side are poised to grow the most, all of West TN will be impacted by this major investment, particularly with the move of suppliers to the area.
So, is all this growth good? I think that’s a loaded question. Life is a series of tradeoffs, and the growth that continues to come to TN has a set of benefits that will come with it. It also has a set of costs, and each family, each business, and each community will have to evaluate whether the benefits outweigh the costs. It’s great to have more restaurants, more places to shop, more parks to visit. But that means there are more people, which means more cars, which means more crowded roads. It also means more houses, which means higher house prices, which can be a benefit or a cost, depending on where you are in the market. My point is that growth is not always good. But neither is growth always bad. I think growth is just the reality for the State of TN, and we are all going to have to decide which part of the state has the growth trajectory that best meets our taste. For those that love booming, changing, paradigm shifting kinds of growth, they may love making their home in downtown Nashville. For those looking for slower growth, they may want to make their home in rural West TN. But make no mistake, people are moving to this state. And they are not just bringing their money, but they are bringing their experiences and values. So here are some practical takeaways:
1. Each community needs to solidify its identity and values in advance of this growth, so that it will attract people compatible with these values.
2. Each business needs to decide on its posture toward growth and its comfort level with the pace of growth, choosing to operate in communities that match that pace.
3. Each family needs to decide what benefits are most important and what costs it can live with and find a community that matches that (if the one you’re in already doesn’t) and then contribute toward the values of that community. Growing pains are coming and in communities that often have competing values, the sooner these conversations happen, the better.
Oracle’s move underscores that companies are still willing to invest in headquarters – in other words places that people come to work together. The pandemic showed us that remote work is possible, but it also showed us that there are costs to remote work, and many companies have decided that cost is too high. If the pandemic taught us anything, it is that in person, life on life work is the most effective kind of work. Zoom is better than phone calls, and phone calls are better than nothing, but in-person is best. It’s true that there are certain jobs that lend themselves well to remote work, but more and more companies are recognizing the value of many jobs going back to “on-site.” The retired Chairman and CEO of IBM recently underscored this truth in his article, “Remote work is a leadership killer,” once again, in the Wall-Street Journal. His main point was that if you are in leadership in particular, you will learn more and be more effective when you are working in person. Learning to read people, learning from other leaders in the office, and “walking the halls” are all things you can’t do remotely. The way we work is in flux, but I believe you will see more and more companies investing in the quality-of-life component of their culture, and that will mean significant investments in the communities they call home.
We love calling West TN home. Founded in McKenzie TN in 1934 and now serving Paris, Alamo, Jackson, Obion, Paris Landing and a host of areas beyond, we exist to invest in those things that will outlive us. If that purpose statement strikes a chord with you, we hope you’ll start a financial conversation with us today by visiting our website at foundationbank.org. We hope you’ll subscribe to this podcast to it in your favorite podcast app and share it on social media. Until our next episode, God bless you.
-President Chad P. Wilson, CFP
Today’s episode of “Money Matters” was written and recorded by President Chad P. Wilson of McKenzie Banking Company / Foundation Bank on April 30, 2024. This episode does not constitute financial advice. Please consult a financial professional to discuss your specific needs. Any rates mentioned are subject to change and are accurate as of the recording date. MBC/Foundation Bank is an Equal Housing Lender, Member FDIC.