Wednesday, January 11, 2012

2012 Outlook: Memphis Real Estate

The fourth quarter sales reports for November have already
begun to roll in from the Memphis Area Association of Realtors. Playing off
some numbers that were finally encouraging at the end of the summer, the Memphis real estate market
saw some sharp jumps in November, especially in the total sales column.
One of the big take homes for the winter was the fact that
November 2011 hit a 28 percent sales increase over the same month in 2010. With
1,076 units moved this November, the Memphis area saw almost 240 more homes
sold than last year at the same time. The area has still struggled to keep up
with the sales for the year however, as 2010 is maintaining about eight percent
more than the current numbers. The last few months have been improving however,
as the full year for 2012 could see significant improvement.
Existing sales also thrived in November. There was a 30
percent increase in units between 2010 and 2011. In November 2010, there were
only 785 existing sales in the Memphis area and this November there was 1,025
units.
Another factor that could play a part in a steadily
improving area market is the raising of rental rates. Rental rates have been
climbing across the nation and that’s no different here in Memphis. One bedroom
apartments are major factors for many couples and individuals trying to make a
decision on whether to buy a home. Right now, Memphis apartments
are averaging at $703 a month, which is almost $50 more than 2010 and about an
eight percent increase in total.
Buyers could also soon be swayed by the continuously low
level mortgage rates. Throughout the country, they’ve dipped during 2011 and
they have in Memphis as well. Right now, a 30 year fixed rate mortgage is 3.987
APR in Memphis. These sub four levels of mortgage
rates
are hitting levels that many have never seen in their lifetime. This,
combined with the fact that apartment rental rates continue to soar, could
always be an attractive cue for potential buyers.
One area that will need to hit an upswing is in new home
sales. The 2010 and 2011 numbers for new home sales broke completely even this
year. While total sales are increasing this winter, new home sales will be a
key factor in the local market’s ability to hit a stride. In the end, these
numbers are certainly telling and it’s also encouraging that November saw some
increases during a month when the market is usually flat. Hopefully the Memphis
area market can continue to build on some of this momentum and get off to a
strong start in 2012.