Price appreciation continues in Memphis as inventory tightens

[Memphis Turnkey Property]

Through various mitigation efforts, the lending giant Wells Fargo has helped some 5,200 Memphis homeowners avoid foreclosure since 2009.
Those numbers come from Wells itself, which currently services the mortgages of about 45,000 families and individuals in the city. Despite progress the lender has made, though, a Wells spokesman said foreclosures remain a “persistent problem” in Memphis.


At least the problem has ebbed slightly, even if it remains persistent. In Shelby County, there were 967 residential foreclosures in the second quarter this year, according to real estate information company Chandler Reports.

That’s down from 1,082 residential foreclosures during the same period in 2012 – a drop of 10.6 percent.
Commercial foreclosures also were down in the April-June period, compared to the same quarter in 2012 – to 19 from 23 over the two quarters.
A mix of forces is contributing to the decline. Some of it is a result of an improving economy, as well as efforts by banks like Wells to keep homeowners from foreclosure, when possible. Some of the decline could be a result of the comparison with highs of previous years.

Looking deeper into the quarter’s results, the number of foreclosure notices fell by 14.4 percent. Notices totaled 1,770 in the second quarter, down from 2,068 in the second quarter of 2012.
Paying attention to the notices, which lenders are required to publish in Tennessee in a newspaper of general circulation, offers a forward perspective – albeit an imperfect one – about what’s to come. Publishing the notices is an early, required step in the foreclosure process. It doesn’t necessarily lead to a certain outcome, however, because the homeowner has time to work out an arrangement with their lender to save their home before a foreclosure auction occurs.


Raleigh and Frayser are two of the inner-city neighborhoods in Memphis that tend to see the most foreclosures from one quarter to the next. But only one of them saw an increase in the second quarter.
Raleigh’s 38128 ZIP saw 74 residential foreclosures in the second quarter, up from 68 in the second quarter of 2012. However, Frayser’s 38127 ZIP saw 61 foreclosures in the second quarter, down from 74 in the second quarter of 2012.

Most of Wells’ customers pay mortgages on time. However, Wells still has more than 1,000 customers in the late states of delinquency.
To that end, Wells scheduled its 95th large-scale foreclosure prevention workshop in Memphis earlier this month. Wells has found that it’s able to save the homes of two out of three customers who attend the workshop.
Year to date, residential foreclosures numbered 1,971, down 14.6 percent from 2,307 for the same period in 2012.
“The positive effect is an increase in sales prices. Hopefully this trend will continue throughout 2013.”

[Bluekiwi]

Whats Memphis property prices doing now MT
Still good buying over their, whats prognosis for 2018 ?

[Memphis Turnkey Property]

Howdy Paul. It's been 4 years since I wrote that article so things have certainly changed. Values have increased by more than 50%. We have seen many areas double in wholesale values. There is a growing tide against home ownership, caused by fear, so tenant demand is high. We have a lot of y'all from New Zealand and Australia building large portfolios with us. Overall the market is really going strong.

[Bluekiwi]

Very interesting, but from a hold and rental perspective, the increased value of property doesn't matter so much, its the rental return the yield that does.
If values have gone up 50% but rents haven't then that's a halving of yield.

What have rents done in the past 4 years ?

[Memphis Turnkey Property]

Well typically capital appreciation and rental appreciation are similar over time. Rents on well presented homes are doing great. I know from dealing with overseas investors that often y'all don't really understand how our rents vary so much so it is hard to give a hard answer to your question. For example a home in 38134 that rented for $995 4 years ago and still has the same tenant is probably leased for $1050 today. A newly rehabbed home next door with same square footage might be $1350.

But the real oil here is the financing. We buy homes, leverage up, get the renter to pay it off and you have a free house. Once you get up to 20 doors or more it really starts to generate wealth. You keep doing it until you want to exit completely. Some of my first purchases are now on their third refi!