Buying repo homes in Memphis now before prices shoot up is a good decision for investors and owner-occupant buyers, as price levels in the area are surging and foreclosures are sharply declining.
In the first quarter, foreclosure postings in Shelby County, where Memphis is the administrative seat, has fallen by more than 20 percent from filings one year earlier and by more than 6 percent from the previous quarter.
These sharp decreases are showing that more Memphis residents are current with their home loan payments and that more are saving their homes from repossession.
The total has dropped to 3,292 homes, reflecting a foreclosure rate of one filing for every 122 homes. Pre foreclosures reached a total of 2,042 units, accounting for 62.03 percent of total county filings. The number of foreclosed homes for sale in Memphis was 1,250, comprising 37.97 percent of total filings.
In the Memphis metro area, which covers eight counties, foreclosure filings reached a total of 3,749, marking a 19-percent drop from total filings one year earlier and an 8-percent drop from the previous period.
With one foreclosure filing for every 148 homes, the Memphis metro area ranked 71st in a chart of 206 metro areas listed according to foreclosure rate.
The decline in number of repo homes entering real estate lists in Memphis contributed to the increase in prices and sales of homes in March. This was in addition to the expiration of the federal tax credits at the end of April, which pushed dillydallying homebuyers to finally make their home purchase.
Based sales figures from the Memphis Area Association of Realtors, a total of 1,323 homes were sold in March, up by almost 5 percent from the 1,.261 units sold one year earlier and marked a whopping 35-percent spike from the 977 homes sold in the prior month.
Pending sales also increased to 1,920 contracts, marking a 15-percent jump from February and a 12-percent increase from March 2009. The substantial sales increase from the previous month was one indication that buyers were rushing to beat the tax credit deadline. The jump in pending sales contracts also prompted realtors to expect an increase in closed sales for the month of April, when sales figures are gathered and tallied.
The average price for homes sold in the Memphis area in March increased to $121,573, a jump of 1.8 percent from the average price one year earlier.
In contrast to the declining foreclosure trend in Memphis, the pace of foreclosure statewide rose in the first quarter, a helpful development for investors looking to find foreclosed homes for sale and other cheap houses in Tennessee.
There were 11,970 homes statewide put into the foreclosure process, marking a jump of 15.5 percent from one year earlier and an increase of 7 percent from the previous period. Of this number, 5,517 were homes in pre foreclosure and 6,453 homes were already in bank foreclosure listings.
Nonetheless, despite the increase in repo homes statewide, buyers targeting the Memphis area should make their purchases now as foreclosures in the metro area are slowing down and prices are surging.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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