Memphis is an emerging real estate market in the US Sunbelt region that has attracted more investors recently. With relatively low housing prices and rents, sufficient job growth and population inflows, Memphis provides profitable real estate investment opportunities. However, crime rate and risks of natural disasters need to be considered. This article analyzes the opportunities and risks of investing in Memphis real estate market.
Strong economy and job growth make Memphis real estate investment-worthy
According to the U.S. Bureau of Labor Statistics, Memphis has seen steady job growth in recent years across industries like trade, transportation and utilities, professional and business services, and education and health services. Major companies like FedEx, AutoZone, and International Paper are headquartered in Memphis, providing abundant job opportunities. The strong economy and employment outlook suggest good fundamentals for the Memphis real estate market.
Increasing population drives up demand for Memphis housing
Memphis is located in Tennessee’s Shelby County, which has seen its population grow by an average of 0.4% annually over the past decade due to net in-migration from other counties and states. With more people moving to Memphis for jobs and affordable living costs, the demand for both buying and renting homes is rising faster than supply. This leads to more real estate investment opportunities with good cashflow.
Lower prices allow room for appreciation in Memphis real estate
The median home price in Memphis is about $159,000, much lower than the national median of $259,000. Lower prices make real estate more affordable for tenants and individual homebuyers. With Memphis projected to continue attracting new residents, home values and rents still have room to appreciate at rates exceeding national averages in the coming years.
Natural disasters and high crime rate pose risks
However, investors need to be aware that Memphis lies on the New Madrid Seismic Zone and is vulnerable to earthquakes. Its location along the Mississippi River also makes it prone to flooding. Memphis also has above-average crime rates, especially property crime, which can negatively impact real estate investments if not properly accounted for.
In summary, the Memphis real estate market provides relatively low-cost and cashflow generating investment opportunities thanks to economic and population growth. But natural disaster vulnerability and high crime rate persist as risks that investors need to consider.