A clear trend in Memphis real estate has become apparent in the last few years. Due to a combination of factors, the inventory of available housing has been on a sharp decline. According to figures from a recent article in The Commercial Appeal, the inventory of houses for sale has decreased from 13,300 in January of 2008 to fewer than 6,000 in January of 2013.
The question arises: What caused a 55% decrease in available housing within five years' time?
The article cites several possibilities for owners' hesitation to sell: market uncertainty, not having enough equity in their current home to justify buying another one, and prices not being high enough to justify selling.
The lack of available homes to buy has become a game-changer in the real estate game in Memphis. Buyers have to be on the ball. If they are too indecisive or wait too long, the house they want may be picked off the market before they get around to making an offer. Meanwhile, sellers find themselves in a unique position: If they are looking to sell a home that has been maintained well and is priced attractively, they may find themselves in the enviable position of having their pick of multiple offers.
So what does this dearth of available properties in the Memphis, TN real estate market mean for investors? A major adjustment for many investors has been the speed at which things move. Not only off the original market for when a company like Memphis Invest purchases the property, but also when investors purchase properties from us. fewer properties and better, more educated and satisfied buyers means deals move quick. It can also mean that forced price appreciation might be in our near future. As more and more homes are kept off the market and foreclosed properties move through the system, the available inventory for buyers will shrink. Now, that does not mean that it is time to sell an investment property, but there is a pretty good chance that property values will begin to adjust to a more normal level within the next couple of years in some areas of Memphis. That price adjustment will be do to forced appreciation as buyers begin to move prices up because of demand and not necessarily other appreciation factors.
Here are some factors we see coming in to play right now over homes and which ones are moving quickly.
1) Upper end and well maintained properties
If you want to ask for a competitive price, you have to provide a competitive product. People are looking for a safe, clean, and attractive place to raise their families whether they are renting or owning. If you are able to provide property that fulfills those requirements, you are in a great position, particularly in a market that has so many renters and is moving to a sellers position.
2) The home should be priced attractively.
Just because there is a shortage of available housing doesn't mean that people are going to pay an unreasonable price for what is available. If a property is priced correctly - either as a sell or as a rental - it will move quickly and there will be a high demand for it.
If you're looking to buy more investment properties and don't want to have to join the fray of those fighting for the decreased number of available properties, it makes a lot of sense to use a turnkey company. Memphis Invest is at the forefront of turnkey real estate investing, and we make it our goal to take as much of the hassle as possible out of choosing which properties to buy and all the steps thereafter to help you be a successful investor in the Memphis market. Choosing a turnkey company allows you to go around the problem of decreased property availability, as we know the Memphis market inside and out and can help you find the property that's right for your investment strategy.
Have you noticed a decrease in properties in your market?