Did you know that Tennessee is one of the hottest places to buy real estate? Unlike other parts of the country, property values in the Volunteer State are showing no sign of decreasing.
In fact, Nashville is currently experiencing one of the fastest periods of real estate growth on record. The average cost of a single-family home in the area has risen to $400,000.
These insanely high prices have made the area less lucrative for potential landlords. Many investors are now scouring Tennessee in hopes of finding the next big city to experience a boom.
Memphis looks like it will be the next city to experience a big Tennessee real estate boom. In 2021, the city saw property values increase by a whopping 16%.
Read on to learn more about the top five Memphis real estate trends projected to impact the 2022 market.
1. The Number of Listings Is Slowly Decreasing
Homeowners in Memphis are becoming less and less likely to list their properties, according to the Memphis Area Association of Realtors. Over the course of the past two years, the number of listings has decreased by 36%.
Consequently, there is not a lot of Tennessee real estate for sale. In January 2020, there were 3,360 properties on the market. By December 2021, that number had dropped to 2,165.
There are several possible explanations for this phenomenon. For one thing, the job market in Memphis has improved over the past two years. And it’s projected to grow at a faster rate than the national average.
Another explanation involves the rate of return on Memphis property investments. As per the MAAR statistics, Memphis area house prices have appreciated by 18.9% since 2020.
Folks in the affluent Collierville region saw a housing price increase of 31.7% over the course of the past year. In the charming Lakeland area, real estate appreciation was even higher at 43.8%.
Consequently, many investors want to hold on to their properties for several more years. This will allow them to further increase the returns on their investments.
2. Increased Competition For Buyers
The decrease in the number of available listings shows that real estate in Memphis is more valuable than ever. However, it also means that buyers can expect a lot more competition when it comes to bidding on properties.
Houses in Memphis are selling faster than ever. It is one of the top five cities in the United States with the fastest-selling markets. Currently, houses are on the market for an average of 16 days fewer than they did a year before.
This gives investors less time to weigh a decision. If you want to buy a property, you have to take action quickly. Otherwise, you risk losing your house to another bidder.
However, even if you bid on a property quickly, you won’t be guaranteed the property of your dreams. You also have to consider making an offer above the asking price.
According to a report by Local Memphis, one Tennessee woman has lost several property bids to folks who were willing to go above the asking price. She estimates that most investors are offering, “10, 20, 30 thousand above listing price.”
Anyone who isn’t able to play this kind of hardball risks missing out on all the market has to offer.
3. A Focus on Revitalization And Development
Memphis is one of the many US cities that has undergone a revitalization process. The area is transforming from a forgotten corner to Tennessee to a bastion of Southern charm.
For many years, Memphis has been home to droves of abandoned properties. This was not only detrimental to the beauty of the area, but it also meant fewer high-quality dwellings on the market.
These days, thanks to a recent in-pour of cash from investors, the city is seeing fewer boarded-up houses and more renovations.
Folks are coming in, fixing up the old houses, and converting them into viable housing for renters. As a result, real estate agents in Tennessee are busier than ever.
Former MAAR president Cassandra Bell-Warren thinks that this is wonderful for the city. In a recent interview, she explained how investments increase the number of houses for renters. They also add value to properties across the city.
“In some areas, they may not be the most desirable areas, but you get someone to come in and invest money… (They) provide affordable housing or rentals for people who can’t buy right now.”
The real estate expert also clarified that these investments are benefiting properties throughout the Memphis area. “All across the city, I’m not seeing anybody who’s not getting value.”
4. An Increase In Rental Prices
Are you looking to earn some passive income? If so, you should definitely consider investing in Memphis rental properties.
The typical inhabitant of Memphis is young and employed. However, on average, Memphians tend to rent properties, rather than own them. This means that the area has a strong need for rental houses and apartments.
As a result, the Memphis rental market is just as hot as the housing market is. Not only are property values in Memphis increasing, but rental prices are skyrocketing as well.
Just last year, the average cost of rent in Memphis increased by a whopping 19%. This rate of increase has steadily grown over the course of the last few years.
In 2017, Memphis rental prices increased by 2%. However, by 2019, these prices increased to a significant 4%.
When you compound these numbers, it becomes easy to see just how much the price increases add up. In 2017, the median price of rent in Memphis hovered below $900 per month. Now, it’s surpassed $1,200 per month.
Start Making Money on Tennessee Real Estate
If you are ready to earn a passive income, you should definitely invest in a Memphis rental property. Tennessee real estate is rapidly increasing in value, making it a phenomenal investment.
Don’t hesitate to start exploring your options. Click here to get in touch with Reedy and Company today. We can help you find renters, manage your rental properties, and more!