I reviewed some very interesting statistics about the Memphis real estate market this morning and want to share the findings. According to the Memphis Area Association of Realtors (MAAR) September analytics downtown Memphis real estate is appreciating, just as my personal stats show. All of these stats are YTD January through September, as October numbers are due out in November. MAAR divides the entire Memphis real estate market into 19 area categories such as East Memphis, Germantown, Downtown etc...... Of these 19 areas: 16 areas have declined on the average sales price, 1 is unchanged and 1 has increased the average sales price. According to MAAR's data downtown Memphis real estate is still appreciating and has a 6.9% increase of average sales prices for homes and condos. While on the whole, Memphis real estate has lost some ground, however, not at the alarming values that the nation has seen in cities such as Miami and Las Vegas. I always consult with my clients and associate Realtors to know the facts and numbers are facts. Downtown Memphis while not impervious to a decline, is a great investment platform for primary and secondary residences as well as investment generating properties.
The average sales price in downtown Memphis real estate has appreciated an average of 6.9% so far in 2008. This shows that properties, on average, are not only holding value but increasing in value. Think about it this way, if you bought a $200,000 property with 5% down ($10,000) and it has increased in value by 6.9% you are making a good, safe investment, especially if you are using it as your home. Your getting value from you investment plus you are getting shelter as a home which also provides a tremendous value of lifestyle. I'm not saying that you just made a $13,800 (6.9%) increase in your property's value this year, but you haven't lost either. A property's true value is determined by how much a willing buyer will pay on the open market, a true sale. So, you made a $10,000 initial investment to buy, depending on your mortgage loan type and amount of time in the property you may have made some equity. If your property has appreciated at 6.9% this year your $10,000 has made a hypothetical return of $690. If you live in this property for 5 years and continue to make 6.9% per year you've made a $3,450 or a 35% return on investment (ROI). Not too shabby! Now factor your property value increase and built up equity and you've made a wise investment.
If you want more details on how to get started investing in downtown Memphis real estate contact me at your convenience.
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