As we all know, the pandemic provided the housing market with a degree of uncertainty. In the early stages, home sales slowed greatly and real estate saw a drop in year-over-year transactions. Then, as 2020 came and went, the market shifted to a seller’s market with low inventory across the nation. Home prices were increasing, and real estate investing only grew more popular.
As Bay Mountain Capital moves into Memphis, we invite you to join us in looking at the market and assessing its potential for the rest of 2021.
The Impact of 2020
Throughout 2020, real estate started out underperforming the previous year due to concerns over the COVID-19 pandemic. People were wary of selling with the uncertainty of demand, health concerns, and low availability of new homes to purchase. However, with each new quarter, performance of the housing market rose. Eventually, it was scheduled to outpace the previous year.
In the Memphis Business Journal, one realtor expressed that their sales median price was up approximately 13%. He mainly attributed it to the low inventory that has been mirrored throughout the rest of the country. However, he also cites several contributing factors. References include out-of-state investors purchasing homes, less new construction availability, and fewer people selling their homes.
Also, according to Realtor.com, in February of 2021 alone, the median home price has risen 15.5% year-over-year. Currently, there is a short supply of homes available for sale at 1,913 properties with a median home price of $150,000.
When we examine the Dallas Market in comparison, we can see many of the same influences affecting us locally. At Bay Mountain Capital, we lend hard money loans to both in-state and out-of-state investors looking for more market availability. With Dallas being a larger metroplex, it’s no surprise that the median home price is significantly higher at $390,000. However, the availability of homes for purchase is proportionate to what’s seen in Memphis at 3,603 homes listed for sale.
Looking to the Future
In terms of market strength, Memphis is shown to be one of the leading cities for investment here in 2021. CNBC cites Memphis as one of the smaller metropolitan markets with the strongest price gains nationwide alongside seven others. With more people working from home, people are leaving larger cities in favor of smaller markets where they can get more for their money.
Looking at how 2021 began, it’s easy to be optimistic about the future of the housing market in Memphis. Overall, demand is high, prices are slowly increasing, and people aren’t as restricted in their purchasing as they once were. As long as the current inventory keeps replenishing, investors should be able to see continued value in their purchases in Memphis.