MEMPHIS, TN (abc24.com) – How much do you think your home is worth?
If you think you know, you had better think again. Thanks to a rash of foreclosures, determining the value of Memphis homes has become a problem, even for the pros.
Nearly everyone knows the real estate market crashed a few years ago. Now the two biggest factors in getting the price of your house back up are comparable sales and foreclosures.
“Memphis started out with a lot of foreclosures,” said real estate appraiser Mary Davis, “we had more foreclosures than most before the bottom fell out in 2008.”
And all those foreclosures are a big part of the problem in figuring out just how much your house is worth.
“It’s very difficult to do appraisals these days,” Davis told abc24.com.
Mortgage companies want three comparable sales in a given neighborhood before they’ll loan you money, and lots of foreclosures mean lots of problems.
“The overall affect of a foreclosure,” said Jules Wade, principal broker for Prudential Realty, “is that it’s very degrading to a neighborhood in real estate values.”
Wade was the Executive Director of Memphis Realtors Association for thirty years; he retired from that position at the end of last year.
“The further you get away from the Poplar Avenue corridor,” added Wade, “the higher the possibility that there might be larger amounts of foreclosures.”
To put it in perspective, if you bought a $100,000 house in 2005, this is what it might be worth today.
“If you bought the house along the Poplar corridor for $100,000 in 2005,” said Davis, “you’re probably okay; it’s probably still worth $100,000. In Germantown you may have been hit about ten percent. In Collierville you may have been hit about 15 percent, maybe 20 percent.”
So, nobody’s a winner?
“Everybody got a hit,” Davis replied.
But don’t get too depressed, the first three months of 2012 seem better.
“Prices have stabilized,” said Wade, “they don’t seem to be dropping further.”
That may sound good, but reality has a way of creeping back in.
“The one thing that is for sure,” said Davis, “is that people have to sell for a lot less than they purchased their house for in 2006-2007.”
Both Davis and Wade are cautiously optimistic moving forward.
Wade said they are seeing multiple offers on homes for the first time in recent memory. Consumer confidence is up and people are tired of sitting on the sidelines.
And Davis said she is working on new sales rather than re-finances.
Both agree that if you are looking to sell, take the time to spruce up your home; Memphis will pay for houses that are fixed up.