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This year has brought us many unexpected twists and turns. The housing market has been signified by both pleasant and challenging surprises. The combination of historically low interest rates, also historically low inventory of homes for sale, and the COVID-19 pandemic, prompted an exceptionally high level of market activity. Without question, Memphis has been and continues to be in a seller’s market. And buyers are motivated to ‘buy up’ while the interest rates are so favorable.
According to the Memphis Area Association of Realtors (MAAR), October of this year saw the number of homes being sold rise by 6.4% over the previous year. That’s 2.1% higher than the national increase of 4.3% — the highest level in almost 15 years.
Several factors are driving the 2020 housing boom, both on national and local levels. First, our homes have become the new office. With at least 42% of the labor force working from home because of the pandemic, we’re spending an unprecedented amount of time in our living spaces. Naturally, people are seeking larger homes to accommodate this new normal. Secondly, the recent drop in mortgage interest rates has made financing a home cheaper than ever. Right now, the average rate on a 30-year fixed-rate mortgage is at a record low of 2.72%.
In Memphis, the MAAR data property records database reported 1,829 home sales in October — up 0.9% over the previous month.
For buyers and sellers who have accomplished a completed transaction, the situation may be considered a win-win. Last month, the average home sale price in Memphis rose to $241,213 — up 27.9% over the previous year. The median sale price increased even more. In October 2019, the median home sale price in Memphis was $145,000. In October 2020, that number increased to $194,900.
Because of a relatively low number of houses for sale in Memphis, the market has become quite competitive. Down 2% from October 2019, home inventory in Memphis dropped to 2,805 last month. For context, more than 13,000 homes were on the market in the Memphis area about a decade ago.
Compared to the first ten months of 2019, in 2020 Memphis home sales volume increased by 8.9% to $3.44 billion.
If you’re looking to change your living situation or benefit from the current market conditions, Marx-Bensdorf, REALTORS® can help. As the oldest real estate firm in Memphis, our agents combine expertise and experience with connections to help you find the perfect place to call home.
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