Slowdown in Memphis Foreclosures Could Be Sign of Rebound

by Donald Hanz on cities

The slowdown in the pace of Memphis foreclosures could be an indication that a recovery is nearing, based on sales and foreclosure data from the Memphis Area Association of Realtors and research firms.

In February, the pace of foreclosure activity in the Memphis metropolitan area, which includes the counties of Fayette, Shelby and Tipton, slowed down by a stunning 30 percent compared to filings in February 2009.

Sales of homes also jumped up by a sharp 33 percent and pending sales surged by nearly 6 percent from sales figures in January, further indicating that the market has started to recover and stabilize.

Additionally, according to the Center City Commission, its Downtown Memphis Housing project which was launched in 2000 has been able to weather the foreclosure crisis, increasing downtown population by 12 percent over the ten-year period from 2000 to 2010. The Central Business Improvement District even posted a bigger increase in population – 4,000 residents or 21 percent higher than the population in 2000.

Memphis foreclosures were handled well by the city as they did not stop the development of downtown residential units. As of the latest report released this March, there are already 13,385 residential units downtown, 57 percent of which are apartment units, 18 percent are single family houses, 16 percent are condo units and 10 percent are public housing units.

The 2,100 condo units have an average assessed value of $228,401 and the single-family houses built were assessed at twice the average value of comparable homes in Shelby County, where Memphis is the administrative seat.

Over the past ten years, apartment properties downtown had an average occupancy rate of 90 percent. Last year, the average income of families living downtown was $57,076.

In 2009, the number of foreclosures for sale in Tennessee declined by 8 percent, indicating efforts by Memphis and other cities in the state to cut down foreclosures. A total of 40,733 homes across Tennessee were notified of their distressed situations during the year, representing 1.49 percent of all housing units in the state.

In January and February this year, Tennessee continued to show declines in foreclosure activity, posting month-over-month decreases of 17.84 percent and 5.6 percent, respectively.

All in all, the $600 million invested by the city in its downtown residential project yielded positive results and was able to help resist the effects of Memphis foreclosures. The Center City Development Corporation still have funds for continued downtown development.

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