How many of you think the market will keep going down? (Memphis: for sale, real estate)

[CPAkeith]

I am very confused, and stopped looking since last Sept. New house prices in DeSoto has dropped about 20% compared with last summer. So many new areas already became bad (with a lot of ignored lawns, for sales signs everywhere...) while constructions are stilling going on.

A lot of magazines mentioned that Memphis area will go up about 3% in 2008, do you guys have any idea?

I am in an apt. paying $900/mo. I work from home, my wife works in the Airport area. Our son is 3 yrs old (so 2 years to worry about school re-zone?).

Houseing prices and areas are changing so fast that we are not sure if we should wait and see, or go ahead and buy now. What would you do?

btw, a lot of the new houses in this area are so cheaply built IMO, that makes the decision making process even more difficult. The apt. that I'm in now is only 2 yrs old, all seven windows in my unit are leaking. And one wall in the masters leaks from the outside wall, making the room feels like a walk-in freezer. Can you believe it?

Some say houses built before 1995 are much better, is that true?

[Pearlbob]

If you're currently renting at $900 a month, I think this is the perfect time to buy. Your mortgage on a starter size home wouldn't be any more than that. (depending on your credit, down payment, etc of course)

I read on cnn that this last quarter of 2007 was the worst in years. It seems like the market keeps going down. However, it listed markets by city, and Memphis was at least in the middle ground, if not one of the better ones. Meaning, the market has slowed here, but not as much as a lot of other cities.

The foreclosure rate is so high...it amazes me how many people in the years past took out loans without realizing what they were doing. Interest-only loans can only work properly if you know what you're doing.

[CPAkeith]

thanks for the info.

our budget is only in the low 200k, would you kindly recommend some areas for us to look at?

Is 38125 not a good idea? And what about the Plantation Glof division on 305?

[Pearlbob]

Looks like 38125 is SE Memphis. That area has gone downhill rapidly. Lots of crime now in that area (around Hickory Hill). Of course, Germantown is right nearby too, so you've got a mix of people who use that area.

Are you wanting to be in the city? Or suburbs? You mentioned you were worrying about rezoning, so that would make me think you want to be in the suburbs for sure ??

Low $200's can get you a lot of house right now. Bartlett is a nice suburb that has lower cost homes, mainly because they are slightly older - however the area would be more established (trees, families there for years, etc). Lakeland, Arlington, etc would also be good for a small home away from city schools. Germantown and Collierville would probably be more expensive than you are looking for, but you never know.

[CPAkeith]

Suburbs and open areas would be nice for our boy. We just don't think we can afford living in the city, although we like the Oak Court Mall area.

Don't take me wrong, but as far as I understand, there are not that many six digits salary jobs in Memphis, how come the market is full of expensive houses?

[daneinmemphis]

alot of doctors and pilots live in Memphis area.. Anyway, try and look at Fayette County too, you will find some very nice homes in your price range and alot of gras and fresh air for your son

[Bidney Turner]

Keith,
If you have a 3 year-old son and are concerned about what schools he will attend, then focus your efforts on a school district that you would like for him to be in. It is actually a great time to buy. Interest rates are low, inventory is high, and home sales in the area are down from this time last year. Right now, your $900 a month is being thrown away, while you could be building equity in a home. Real estate is very local, and while there are areas in the Memphis market that have gone down in value, there are many areas that continue to gain!

[Pearlbob]

I think the houses here in Memphis are really cheap compared to most major cities our size! The homes near Oak Court, like in the Galloway area, are million dollar mansions though. That isn't average for the city. There are plenty of smaller homes that are very inexpensive in midtown and east Memphis. Definitely go out to the burbs though, if your main issue is schools.

[CPAkeith]

Update: yes, it keeps going down. Even in hot area like Arlington, I saw Reduced signs everywhere.

Not sure if a lot of people are in financial troubles or what, ignored lawns everywhere make a lot of "could be nice" subdivisions look like jungles.

[mjtinmemphis]

Originally Posted by CPAkeith

Suburbs and open areas would be nice for our boy. We just don't think we can afford living in the city, although we like the Oak Court Mall area.

Don't take me wrong, but as far as I understand, there are not that many six digits salary jobs in Memphis, how come the market is full of expensive houses?

Hi cpakeith,

To shed some light on your question. Memphians tend to live above their means. You have many people that work semi fulltime jobs or even your school teachers and police officers taking out loans far out of their reach. There are many people that don't have the business savy to take care of their money. The market is adjusting itself to fit the incomes of the area and will probably continue to do so for a while. I've heard that the western district of Tennessee has one of the highest bankrupsy rates if not the highest in the nation because of this. As you can imagine this affects the quality of life for everyone.