Some home sale prices are being reduced, creating a competitive edge in the Memphis market, due to a current high inventory.
If you’re considering buying a home now, it’s worth looking into additional price drops across Shelby County.
According to realtor.com, of the 3,039 homes on the market in Memphis, 773 currently have a price reduction, as of Sept. 17.
These reductions are broad in impact. For example, one house in the Parkway Village area is currently valued at $115,000, and another in Cordova at $280,000, while both saw a reduction of $15,000 as of Sept. 17.
Most often, the higher the value of the home, the larger the price drop. Homes valued at $1.3 million
in East Memphis and $1.5 million in Central Gardens recently saw drops of $100,000, while a $1,580,000 home near TCP Southwind saw a massive drop of $395,000, according to realtor.com.
Crye-Leike realtor Anna Bishop said the value of a reduction depends on a whole range of factors — average days on the market, the number of showings the home has had, feedback from buyers, etc. With average days on the market in the Memphis region currently sitting at 90 days, according to Bishop, going 30 days without a showing, for example, could call for a price decrease.
“You can kind of keep your finger on the pulse by feedback, number of showings, general knowledge of the market, you know, what houses near you are doing,” she said.
When dropping a home’s price, sellers should keep in mind the price ranges of different buyers. Dropping the cost into a lower price bracket can make it visible to a large new group of buyers, Bishop explained.
“So if you're very near the bottom of that range or the top of that range, it may be strategic to take say from $300,000 to lower it to $295,000,” she said. “Work with an experienced realtor who is consistently looking at comps (comparable sales) and recent sales and comparing the subject property to those most recent sales.”
Buyers naturally gravitate to less expensive options, but the waters can be muddied when, for example, two identically priced homes show vastly different price reductions. Going for the home with the larger reduction is not necessarily the best move, Bishop warns.
“Look at the expensive items, did the more expensive home need a new roof, has it been under contract and failed? Was there something wrong with the previous home inspection? Does it need new windows or AC,” she said. “You have to look at the whole picture, not just price. So if a comparable house dropped $30,000 and the other one didn't drop, but the other one has a new roof, that would be something that you lean on the experience of your realtor [for].”
According to realtor.com, with at least 22% of homes in every municipality in the Memphis market, save for Millington, showing a price drop, Bishop said that’s a sign that "now" is a great time to buy. The sellers’ market is still strong, though it’s worth taming any expectations of a quick sale.
“It's a really good time for buyers to purchase right now,” she said. “We’re not really experiencing [quick offers] as a whole right now. Although there are some houses that go on the market and are extremely appealing to a large audience … but it’s not the norm right now.”
Here is a more detailed look at which Shelby County and DeSoto County municipalities are seeing the most price drops for single-family homes, as of Sept. 17, according to realtor.com.
- Bartlett – 71 of 243
- Collierville – 121 of 335
- Germantown – 67 of 219
- Lakeland – 25 of 109
- Millington – 20 of 153
- Hernando – 54 of 223
- Horn Lake – 17 of 76
- Olive Branch – 93 of 377
- Southaven – 62 of 282
Jacob Wilt is a reporter for The Commercial Appeal covering Dining, Retail and Real Estate in the Memphis area. You can reach him at jacob.wilt@commercialappeal.com.
This article originally appeared on Memphis Commercial Appeal: Home sale prices are being reduced in Memphis market, here's why
