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Memphis, TN Real Estate Market Trends & Analysis 2019

Written by Than Merrill

Key Takeaways

  • Memphis real estate investors have found their “flips” make higher returns and take less time to complete than most cities across the country.
  • The Memphis real estate market remains incredibly attractive to those who are interested investing.
  • Real estate in Memphis has become a commodity for savvy investors, no matter where they live.

The Memphis real estate market has done everything it can to attract real estate investors of every level. However, there are perhaps two indicators more attractive to Memphis real estate investors than anything else: real estate entrepreneurs appear to be able to make higher-than-average returns while taking less time on each project than the national average. That means savvy investors may be able to simultaneously move more product and generate higher rates of return than most other cities across the country. When all is said and done, the Memphis housing market may prove to be one of the hottest of 2019, and there is still plenty of time left in the year.

Memphis Real Estate Market Overview

  • Median Home Value: $86,000
  • 1-Year Appreciation Rate: 4.8%
  • Median Home Value (1-Year Forecast): 2.1%
  • Median Rent: $945
  • Average Days On Market (Zillow): 55

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Memphis real estate investing

Median Home Price Memphis

Home price trends in the Memphis real estate market have echoed those of their national counterparts. In other words, real estate in Memphis has increased in price for the better part of a decade. Due, in large part, to improving economic conditions and an inherent lack of supply, prices have risen almost exponentially since 2016. In the summer of 2016, in fact, the median home value in Memphis sat somewhere around $63,600. Today, real estate in Memphis has a median home value of $86,000, according to Zillow. In the last year alone, local home values have increased 4.8%, and there’s nothing to suggest they won’t continue to increase moving forward.

Memphis Foreclosure Statistics

According to RealtyTrac, a nationally recognized real estate data company that specializes in foreclosure data, the Memphis real estate market has approximately 445 properties that fit the description of a distressed home (default, auction or bank owned). At that rate, the number of distressed properties in Memphis is relatively low, and continuing to drop as the city distances itself from the latest recession. According to RealtyTrac’s most recent data, the number of properties that received a foreclosure filing has dropped month-over-month and year-over-year, 1% and 42% respectively.

It is worth noting that the overwhelming majority of distressed properties identified by RealtyTrac are auction homes (67.8%). As their names suggest, auction homes have already been repossessed by their loan originators and are either currently up for auction to the highest bidder, or will be at some point in the near future.

Auction homes represent a unique opportunity for Memphis real estate investors, as long as they know where to look. That said, here’s a breakdown of the neighborhoods in Memphis with the highest distribution of distressed properties:

  • 38141: 1 in every 902 homes is currently distressed
  • 38125: 1 in every 912 homes is currently distressed
  • 38105: 1 in every 1,233 homes is currently distressed
  • 38135: 1 in every 1,606 homes is currently distressed
  • 38127: 1 in every 1,654 homes is currently distressed

Memphis Real Estate Investing

Investing in the Memphis real estate market is more attractive for investors today than in years past. If for nothing else, Memphis real estate investing has found itself the beneficiary of what many are calling a perfect storm. Two very specific indicators, in particular, are currently working heavily in favor of real estate investors in Memphis: real estate entrepreneurs appear to be able to make higher-than-average returns while taking less time on each project than the national average.

According to Attom Data Solutions, homes flipped in the first quarter of 2019 across the United States “took an average of 180 days to complete the flip, up from an average 175 days for homes flipped in Q4 2018 but down from 182 days a year ago.” Real estate in Memphis, on the other hand, took an average of 136 days to flip, which was good enough for second place (only behind McAllen-Edinburg, Texas (127 days)). Perhaps even more importantly, however, are the returns Memphis real estate investors are seeing nearly halfway through 2019. According to Attom Data Solutions, Memphis real estate investors are averaging a gross flipping ROI (return on investment) of 79.2%.

The unique combination of shorter projects and higher returns has benefited the entire Memphis real estate investing community, and should continue to do so for the foreseeable future.

Memphis Real Estate Market Summary

The Memphis real estate market has become one of the hottest commodities in the national real estate investing community. In addition to being relatively affordable, real estate in Memphis has demonstrated an increased propensity towards investor success. Local real estate is simultaneously capable of realizing higher return rates in shorter periods of time, which allows efficient investors to maximize their opportunities. Therefore, anyone looking for a new market to “set up shop” in may not need to look any further than the Memphis housing market.

Have you thought about investing in the Memphis real estate market? If so, what are you waiting for? We would love to know your thoughts on real estate in Memphis in the comments below.

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