Memphis Housing Market Becomes The Top 10 In The U.S.
This ARTICLE On Memphis Housing Market Becomes The Top 10 In The U.S. Was PUBLISHED On October 15th, 2019
Tennessee is one of the hottest states when it comes to home affordability and the cost of living.
- There are more residents moving to Tennessee than any other state in the U.S. A large percentage of new residents to Tennessee are folks from high-taxed states like Illinois and New York
- The most popular city where new residents flock to is the city of Memphis
- From the look of things, Memphis seems to become the next hottest housing market
- A large percentage of new Memphis residents are millennials and homebuyers under 40 years old
In this article, we will cover the Memphis Housing Market and why Tennessee is the state of choice for homeowners fleeing states with high tax rates.
Will The Memphis Housing Market Be The Next Hot Market For Millennials?
A large percentage of millennials have remote job positions.
- Remote wage earners can work in any city and state
- More and more millennials and first time home buyers are researching the most affordable city and state to buy a home
- Studies found that Memphis Housing Market makes it one of the top markets for first time home buyers
- Besides affordable housing, Tennessee has no state income states
- Tennessee taxpayers do not have to worry about increasing taxes and new taxes like Illinois
- Average median home prices in the Memphis Housing Market was $135,000 in July 2019
The main reason why the Memphis Housing Market is hot and will continue to grow is due to low state taxes and the low cost of living.
Skyrocketing Home Prices Force Home Buyers To Move To Tennessee
In most states, home prices have been skyrocketing for the past 5 years. HUD, the parent of FHA, has increased FHA Loan Limits for the past 3 years due to rising home prices.
- 2019 FHA Loan Limits is capped at $314,827
- The Federal Housing Finance Agency (The FHFA) also increased Conventional Loan Limits for the past three years in a row due to high home prices
- Conforming Loan Limits for 2019 is capped at $484,350
- There are cities with stagnant real estate prices where home prices have been depreciating
- Illinois is one of those states with declining home values due to high property taxes
- Illinois is in a major financial crisis where all state taxes are increasing
- Illinois does not seem to find a solution on its downward financial hole getting deeper
- Led by Democratic Governor JB Pritzker and a democratic majority, the state’s solution in fixing its finances is not just raising existing taxes but implementing new taxes
- This causes Illinoisans to leave the state to lower-taxed states like Tennessee
Many homeowners in Illinois cannot afford to live in the state due to high taxes and are seeking elsewhere like the Memphis Housing Market to purchase a home.
Memphis Housing Market Versus Other Cities With Affordable Housing
Recent studies by First American Title Insurance, headquartered in Santa Ana California, found that Memphis Tennessee is among the top U.S. cities for first time home buyers in 2019.
- Factors that affected the results were no state taxes, low cost of living, and affordable housing
- The study was based on national housing markets with a major emphasis on the cost of living and home prices
- In many cities due to high home prices, many home buyers are priced out of the market
Top Ten Cities In The U.S. With Affordable Housing Markets
Here are the top ten U.S. cities with the largest number of affordable home prices and/or values for first time home buyers:
1. Memphis, Tenn. : 71 percent
2. Oklahoma City: 71 percent
3. Pittsburgh: 69 percent
4. Atlanta: 66 percent
5. Cincinnati: 66 percent
6. Kansas City, Mo.: 65 percent
7. Tampa, Fla.: 65 percent
8. Detroit: 62 percent
9. St. Louis: 61 percent
10, Columbus: 60 percent
Main Reason For The Hot Memphis Housing Market
Many residents are flocking to the state of Tennessee, especially Memphis, due to its great economy, no state income taxes, affordable housing prices, and the low cost of living.
- 2019 proved to be a stellar year for the Memphis Housing Market
- Home prices are creeping up due to low housing inventory and strong demand
- Properties for sale have become scarce and more homebuyers are shopping for homes creating major demand for homes
- Homebuilders are thriving
- They are selling homes that did not break ground
- National homebuilders are flocking to Memphis and surrounding areas like they found gold
Michael Gracz, the National Sales Manager at Gustan Cho Associates and Tennessee housing expert said the following:
Four or five years ago, the city had a six-month supply of homes for sale. That’s a fairly “balanced” housing market, meaning that it doesn’t lean too heavily toward buyers or sellers. But inventory levels have dropped quite a bit since then. As of May 2019, the Memphis real estate market had about a two-and-a-half-month supply of homes for sale. That means it tends to favors sellers over buyers, at least from an inventory standpoint. This increases competition for those planning to buy a home. Real estate investors have a lot to do with the tight inventory conditions in the Memphis area.
Memphis has the top real estate markets for investors. Memphis was the number one place to invest in investment properties followed by Philadelphia and Detroit.
Top Three Real Estate Investor Markets
The three top markets to invest in real estate were Memphis, Philadelphia, and Detroit. These three cities attracted many out of state real estate investors due to the following reasons:
- Low home prices
- Low cost of living
- Increasing residents
- Thriving economy
- Low unemployment rates
- No state income taxes
- Low property taxes
The low cost of housing means more profits for landlords. Lower property taxes mean higher profits for landlords. Record migration to Memphis means more demand for landlords. Low unemployment rates and high demands for jobs mean fewer evictions and profits for real estate investors.
Memphis Housing Market Outlook
The Memphis Housing Outlook looks promising for both individuals and businesses. Never had the city seen such a massive migration to Memphis. New businesses are popping up on every corner. Companies are moving their corporate headquarters to Tennessee in record numbers. Massive residents from other high-taxed states like New York and Illinois are making their move to Tennessee. No doubt housing prices will rise. However, there is still ample acreage for homebuilders to build new homes. This is a developing story. Gustan Cho Associates Mortgage News will cover major U.S. cities that are thriving and are in financial chaos. Stay Tuned!!