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Expecting a dip in Memphis property prices in 2025? Think again.
Despite economic shifts, the Memphis real estate market is poised for growth, driven by increasing demand and limited housing supply.
In this blog post, we will explore why property prices in Memphis are set to rise in 2025.
We rely on solid, up-to-date data and statistics from multiple credible sources, ensuring our analysis is grounded in fact, not speculation.
By thoroughly examining this data, we draw our own conclusions, which we share with you at the end of this post. Enjoy the read!
How this content was produced 🔎📝
This article offers thoughtful insights and analysis based on reliable sources, but it should not be considered financial advice. We work hard to research, compile, and analyze data to give you a well-informed perspective. However, as you can guess, our analysis involves subjective choices, such as source selection and methods, and it cannot fully capture the market's complexity. Please, always do your own research, consult professionals, and make decisions based on your own judgment. Any financial risks or losses are your responsibility. Additionally, you should know that we have no affiliation with the sources mentioned, ensuring our analysis is completely impartial.
1) In Memphis, there are only about "0.45 homes" for each person, which is quite limited
Signal strength: strong
The fact that there is around 0.45 home per inhabitant in Memphis indicates a relatively low housing availability. This low ratio suggests that housing demand is likely to exceed supply, which often leads to an increase in housing prices. In Memphis, a unique factor is the city's growing reputation as a cultural and economic hub, attracting more people to move there.
As more people move to Memphis, the pressure on the housing market increases, further driving up prices. This is especially true because new housing developments may not keep pace with the influx of new residents. Locals know that the city's vibrant music scene and job opportunities are key attractions that draw people in.
Given these factors, it's reasonable to expect that housing prices will continue to rise in 2025. However, if the ratio of homes per inhabitant were to increase significantly, say to 0.6 home per inhabitant, it might indicate a more balanced market.
Source: USCensus
2) Home values in Memphis have risen by 3.5% since last year and could keep increasing
Signal strength: strong
The fact that home values in Memphis have already changed by 3.5% since last year is a strong indicator that the housing market is on an upward trend. This increase suggests that demand for homes is growing, which often leads to higher prices.
Currently, the median home price in Memphis is around $149,755, and this figure is crucial for potential investors to consider. Additionally, the median sales price per square foot is around $121, which provides insight into the cost of space in the area.
These statistics, combined with the recent price change, support the assumption that housing prices are likely to continue rising into 2025. For investors, this could mean a promising opportunity to enter the market before prices climb even higher.
However, if the home value change were to drop below 1%, it might suggest a stabilization or decline, challenging the current upward trend.
Source: Redfin
We created this infographic to show how property prices in Memphis compare to other big cities in Tennessee. It shows the median price as well as the price per sqft, making it easy to see which places might offer the best value. We hope you find it helpful.
3) A local in Memphis could afford a house in about 2.9 years, which is relatively quick
Signal strength: moderate
In Memphis, it currently takes around 2.9 years for a local to save enough to buy a house. This is based on the median household income of approximately $51,399 and the median home price of about $149,755.
When it takes a relatively short time for locals to afford homes, it suggests that housing is currently affordable compared to other markets. This affordability can attract more buyers, leading to increased demand for housing in the area.
As demand rises, it is likely that housing prices will increase in the future, potentially by 2025. Investors might see this as an opportunity to enter the market before prices climb.
If the time to afford a home were to increase significantly, say to 5 years or more, it might indicate that prices are stabilizing or even declining.
Source: USCensus
4) Memphis has a "Livability" score of 70, which indicates it's a good place to live
Signal strength: moderate
The livability score of 70 in Memphis is considered good because it reflects a balance of factors that make the city attractive to residents.
One key characteristic is the vibrant music scene, which not only enriches the cultural life but also attracts tourists and new residents, contributing to economic growth. Additionally, Memphis has a strong sense of community, with numerous local events and festivals that foster a welcoming atmosphere, making it a desirable place to live. Furthermore, the city's strategic location along the Mississippi River enhances its appeal by providing excellent logistics and transportation opportunities, which can boost job growth and attract businesses.
These factors combined suggest that housing demand is likely to increase as more people are drawn to the area, potentially driving up prices in 2025. A good livability score indicates that residents are generally satisfied with their quality of life, which can be a strong indicator of future real estate appreciation.
However, if the livability score were to drop below 60, it might signal underlying issues that could deter potential buyers and investors, possibly leading to stagnant or declining housing prices.
Source: AreaVibes
Our team designed this infographic to show how competitive the real estate market in Memphis is vs. other major cities in Tennessee. It shows the percentage of sales above the list price, a key indicator of market competition.
5) Two main websites predict that home prices in Memphis will rise in 2025
Signal strength: moderate
When considering the future of the Memphis housing market, it's noteworthy that two major websites are forecasting positive growth for home prices in 2025. These forecasts suggest a potential upward trend, with Realtor predicting a 10.50% increase and Redfin estimating a 4% rise in home prices.
In contrast, Zillow's forecast is less optimistic, projecting a slight decline of -0.10%. The significant gap between these predictions highlights the uncertainty and variability in market forecasts.
While these forecasts provide valuable insights, it's crucial to remember that they should be taken with caution. We will also rely on strong, reliable, and actual data to make a professional judgment.
If the majority of forecasts were to predict a consistent decline in home prices, it would signal a different market outlook.
Sources: ZillowForecasts, RedfinForecasts, RealtorForecasts
6) Memphis homes are significantly more affordable, with prices 66% lower than the national average
Signal strength: minimal
The fact that Memphis has a median home price 66% below the national average suggests that there is significant room for growth in the housing market. When prices are substantially lower than the national average, it often indicates that the area is undervalued and could attract more buyers and investors, leading to an increase in demand and, consequently, prices.
In Memphis, the most expensive properties are likely to be luxury homes located in areas like East Memphis, where amenities and proximity to business centers drive up value. On the other hand, the cheapest properties are probably small, older homes in neighborhoods like Frayser, which may require renovation and are less desirable due to their distance from key amenities.
As demand increases, these lower-priced areas could see a rise in property values as investors look for affordable options with potential for appreciation. This dynamic creates a favorable environment for price growth, especially if the local economy continues to improve and attract new residents.
If, however, the median home price in Memphis were to rise above the national average, it might suggest that the market has reached a saturation point, potentially slowing further price increases.
Source: Zillow
This infographic we have made will show you how market values have changed during the last decade in Memphis vs other major places in Tennessee. Here, the percentage increase or decrease in market value will help you see long-term trends.
7) In Memphis, about 22% of homes sell for more than their listing price
Signal strength: minimal
In Memphis, around 22% of sales close at a price higher than the listing price, which is a significant indicator of demand. When buyers are willing to pay more than the asking price, it often means that competition among buyers is strong and they are eager to secure a property.
This kind of market behavior suggests that housing demand is outpacing supply, leading to upward pressure on prices. As more buyers compete for the same properties, sellers can afford to be more selective, often resulting in higher final sale prices than initially listed.
Such trends are typically seen in markets where property values are expected to rise, making it a potentially lucrative time for investment. However, if the percentage of sales closing above the listing price were to drop significantly, say below 10% of total sales, it might indicate a cooling market.
Source: Zillow
8) In Memphis, home prices have steadily increased by an average of 7.7% each year over the past decade
Signal strength: minimal
The fact that home prices in Memphis have appreciated at an average rate of 7.7% over the last decade is a noteworthy signal for potential investors. This consistent growth rate suggests that there has been a steady demand and price growth in the housing market over the years.
While a positive 10-year average home value appreciation indicates a history of favorable market conditions, it's important to remember that past performance doesn't guarantee future results. However, such a track record can be a good indicator of potential future increases in home prices.
Investors often look at historical data to gauge the likelihood of continued market strength, and a decade-long trend can be reassuring. Yet, it's crucial to consider other factors that might influence the market, such as economic changes or shifts in demand.
If the appreciation rate were to drop significantly, say below 3% over a similar period, it might suggest a weakening market, prompting a reevaluation of investment strategies.
Source: NeighborhoodScout
This infographic designed by our team breaks down the latest livability score in Memphis but also in other big cities in Tennessee. It provides a clear view of which locations offer the best overall living conditions, which is a good thing to know if you want to buy real estate.
So, are prices going to climb in Memphis in 2025? Yes, they are!
Memphis is poised for a rise in housing prices by 2025, driven by several compelling factors.
Firstly, the city has a low housing availability with only 0.45 homes per person, indicating that demand is likely to exceed supply. This imbalance is exacerbated by Memphis's growing reputation as a cultural and economic hub, attracting more residents. As more people move in, the pressure on the housing market increases, pushing prices up. Additionally, home values have already risen by 3.5% since last year, signaling a strong upward trend.
Moreover, Memphis homes are significantly more affordable, with prices 66% lower than the national average, suggesting room for growth. The city's livability score of 70 and vibrant community further enhance its appeal, drawing more buyers and investors. With 22% of homes selling above their listing price and a decade-long average price increase of 7.7%, the market shows strong demand and potential for continued appreciation.
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