News Summary
As of July 24, 2023, the Memphis area has experienced a transition to a buyer’s market in residential real estate. Although home prices continue to rise, the total number of sales has declined by 6% this year. Experts attribute the changes in market dynamics to various factors, including recent increases in mortgage rates, which hover between 6% and 6.25%. Despite reduced sales, significant transactions persist, and Memphis is noted as a prime location for rental investors. These evolving conditions necessitate informed decision-making for potential buyers and sellers alike.
Memphis โ The residential real estate market in the Memphis area has transitioned to a buyer’s market as of July 24, 2023. Home prices continue to rise, even as overall sales decline. Year-to-date sales figures show a decrease of 6%, with homes sold dropping from 7,992 to 7,516. This downturn is reflected in monthly sales volume, which declined by 5.2%, falling from $2.11 billion to $2 billion.
Market dynamics in Memphis have shifted, leading to this reduction in sales. Industry experts acknowledge the reasons for this change are not entirely clear, noting that real estate trends fluctuate yearly. Despite the current market conditions, potential buyers have been reassured that opportunities remain available.
Eleanore Maynard, a realtor, remarked on the previous pace of sales in the Memphis market, attributing rapid transactions to low interest rates during the COVID-19 pandemic. Presently, mortgage rates hover between 6% and 6.25%, which, while historically reasonable, are perceived as high by potential buyers. It is speculated that should mortgage rates drop below 6%, buyer activity is likely to increase again.
Currently, the average home sales price across Shelby, Fayette, and Tipton counties stands at approximately $260,000. This price point reflects the balance between affordability and rising market values. Notably, while overall sales are down, significant transactions continue to occur, including cash sales for homes priced up to $2 million.
Despite the declining sales figures, there has been a small year-over-year increase in sales during certain months, such as a 1.6% rise noted in May compared to the previous year. Rising costs associated with labor, land, and materials have sparked concerns regarding affordability, especially for new construction projects. However, programs are available to assist first-time buyers with closing costs and favorable mortgage rates.
In addition to residential trends, Memphis is recognized as the fourth-best city in the U.S. for rental investors, attributed to its combination of affordable home prices and a high renter populationโcurrently estimated at around 53%. Recent notable investments in the Memphis area, including Elon Musk’s xAI supercomputer project and Ford’s BlueOval City, are expected to enhance economic growth in the region.
Moreover, rental prices in Memphis have seen a notable increase, rising by 4.5% from March 2024 to March 2025, with the median rent jumping from $940 in January 2022 to $1,202 in January 2025. This upward trend in rental prices indicates strong demand in the rental market, even as home sales adjust.
The current residential market, while leaning slightly toward a seller’s market, illustrates a more balanced mood among real estate agents. The average time homes stay on the market has increased to 58 days, suggesting that properties are taking longer to sell than before.
In contrast, the industrial market in Memphis remains robust, spurred by upcoming projects expected to drive demand for industrial space. The office market is also showing signs of recovery, evidenced by decreasing vacancy rates as more employees return to work.
With the Memphis real estate landscape in a state of transition, real estate professionals emphasize the importance of local knowledge and comprehensive assessments for those considering investments in the area. As the market settles into a new rhythm, understanding these dynamics could lead to opportunities for both buyers and sellers in the evolving environment.
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Additional Resources
- Commercial Appeal: Memphis Rental Home Investment Study
- Wikipedia: Real Estate in the United States
- Norada Real Estate: Invest in Memphis Real Estate
- Action News 5: Memphis Real Estate Agent Living the Dream
- Realtor.com: Unique Memphis House Monolith for Sale
Author: STAFF HERE MEMPHIS WRITER
The MEMPHIS STAFF WRITER represents the experienced team at HEREMemphis.com, your go-to source for actionable local news and information in Memphis, Shelby County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the areaโwith deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Beale Street Music Festival, Elvis Week, and Memphis in May International Festival. Our coverage extends to key organizations like the Greater Memphis Chamber and the Memphis Convention & Visitors Bureau, plus leading businesses in logistics, healthcare, and music that power the local economy such as FedEx, St. Jude Children's Research Hospital, and AutoZone. As part of the broader HERE network, including HEREBristol.com, HEREChattanooga.com, HEREKnoxville.com, and HERENashville.com, we provide comprehensive, credible insights into Tennessee's dynamic landscape.
