The Memphis market is a relative newcomer to the list of the best places to flip a house. Named by Money as one of the top 25 Best Cities for Flipping a House, Memphis boasts a 75.6% average return on investment, an average of 121 days to complete a flip, and a year-over-year change in home prices of 3.4%.
What’s more, ATTOM Data suggests that among 85 metropolitan statistical areas with at least 90 single family and condo home flips completed in Q1 2017, Memphis was among those with the highest home flipping rate at 15.1%.
What’s driving this interest in the Memphis? Here are a few reasons why the this market may surprise you…
#1. Memphis is one of the most affordable housing markets in the country.
According to Realty Biz News, Memphis is one of the most affordable housing markets in the United States. “The median list price for Memphis real estate is $80,000… That’s about 62 percent lower than the national median,” states the site. Realty Biz News continues to add that this affordable market specifically attracts Millennials who are starting families.
#2. Consumers are feeling positive and that’s translating to the housing market.
“Consumers are feeling more secure in their jobs, upbeat about local and national economics and thus confident about spending,” stated a recent Memphis Daily News article. And Memphis-area home sales and mortgage data have reflected that confidence
Financing specialists agree. They attribute a mix of high demand, rising home values and low interest rates holding steady among the factors behind the 4% gain in purchase mortgage volume that kicked off the third quarter in July. Mortgage volume growth grew from about $204.1 million in July 2016 to $212.2 million in June 2017 —a great sign that there are people buying in Memphis!
#3. New construction is always a good sign, too.
“While the market has obviously improved tremendously, last year in Shelby County we only pulled about 925 permits, which traditionally we’ve done in the neighborhood of 3,000 to 4,000,” explains homebuilder James Reid in an article for the Memphis Daily News. “So while we’ve recovered some, we’re still down from a typical year,” Reid said.
Even though Memphis isn’t pulling in the supply numbers like San Francisco or Washington D.C., it’s important to note that while the number might seems low, the Memphis housing market has slowly, but consistently increased its amount of home permits since 2007.
#4. Smaller institutional buyers are taking note.
Mid-sized companies have become the leading buyers of single-family houses for rent in many secondary and tertiary markets, and Memphis is no exception. In fact, 8.6% of all homes and condos purchased this year (through July) were purchased via institutional buyers according to National Real Estate Investor— meaning buyers who purchased at least 10 properties in the last calendar year. This makes Memphis the city where institutional investors account for the biggest share of purchase, among metro areas with at least 2,000 home sales year-to-date in 2017.
Funding your Memphis real estate investment
Thinking about investing in real estate in Memphis? Explore the opportunities available to both borrowers and real estate investors in Memphis and across the country by connecting with the team at Patch of Land today!