The current housing market situation in the Memphis area in shows an increase of 18 percent in sales for April 2013 as compared to April 2012 in total units according to the Memphis Area Association of Realtors data. Total inventory for the Memphis area, however, according to The Commercial Appeal, indicates that January 2008 inventory had over 13,300 units for sale, while January 2013 held just under 6,000. Year to date sales indicate a 10.3 percent increase in total number of sales, with 4,716 total units in 2013 up from 4,317 units in 2012.
In addition, there was a 15 percent decrease in bank owned sales while adding a big jump up of nearly 35 percent in non-bank sales as compared to April 2012 to April 2013. New home sales were at 61 units for April 2012 as well as for April 2013.
Although Memphis ranked at No. 108 on the list of Most Affordable Market for families earning median salary of $58,000, according to the National Association of Home Builders, the Memphis Business Journal indicated that housing market’s affordability ratios flattened for the first quarter.
According to Kiplinger, the nationwide housing outlook for 2013 is trending upwards. In 2011, the majority of home sales ranged in the lower priced part of the spectrum. After burning through that inventory, 2012 sales fell off a cliff for low end prices. With no lower priced inventory, buyers were forced to either jump up the price ladder or not buy into the market. Median home prices across the nation have risen in the past year with more transactions touching the mid-price range.
Furthermore, the low end price point traditionally attracts investors, who snap up deals, renovate them and rent or sell them. As they attract renters or buyers, the neighborhood starts seeing an improvement, making the areas more desirable and revitalized, eventually raising housing prices. Add a year or so of rising prices on top of that and more traditional buyers will shed their cold feet to enter the market, potentially at a higher price point.
Due to the fact that the overall Memphis inventory is down, more buyers are looking at increased competition to bid on fewer homes, and in some cases, upping their offers in an effort to out-bid the other buyers. More buyers are appearing in the market and the overall demand for houses is rising.
Still, some home owners are sitting tight, unwilling or unable to sell. The uncertainty of the market, combined with job loss or too little equity in the home makes for uneasy sellers. Meanwhile, home buyers are seeing an old shadow of the seller’s market back before the 2008 housing crash. Multiple bids and 24 hour listing times may yet make a comeback.
About the author: Jennifer Kinzle