Memphis, Tennessee, is a large city on the Mississippi River. It’s known for Elvis’s Graceland, its NBA team, the Grizzlies, and being the birthplace of FedEx. Memphis has a rich music history, rivaling the state capital, Nashville. However, Memphis is a more affordable city than Nashville, which has seen skyrocketing real estate prices in the past decade.
Memphis has a low cost of living index compared to the rest of the country, making it a great place to live. It has plenty of job opportunities in various industries. Read on to learn more about the real estate market in Memphis and how you can find the right house.
Real Estate Market in Memphis
Memphis real estate values vary greatly depending on the neighborhood. You can find low-cost houses in older areas for about $60,000. You’ll want to renovate them to make them more trendy and modern, which requires time and money. You can buy updated houses in gated neighborhoods for about $530,000, but they’re move-in ready.
Houses in Memphis have increased by about 22% in the past year. Looking at the past five years, you’ll see that values have increased by 93%. This steady growth shows that Memphis is a quality city if you invest in real estate.
Since Memphis has such a booming tourist industry, many homeowners profit by renting their houses as Airbnbs. Travelers appreciate the ability to stay in a comfortable home instead of renting a hotel room. These houses are in Memphis neighborhoods, giving tourists a better sense of the city than staying in a downtown hotel.
Many people in Memphis have decided to sell their houses since the market is booming. If you want to make a profit, we buy houses Memphis residents want to sell so you can find a property that suits you better.
With so many people wanting to own a house in Memphis, many people have to rent until their ideal property is available. A lot of people live in apartments, but over 53% of the homes in Memphis are rentals.
Costs of Living in Memphis
The cost of living in Memphis has a 77.5 rating, putting it below the national average of 100. You can have a good quality of life on an average salary of $53,000 a year. Living expenses are low enough that you won’t spend most of your income on rent or a house payment.
However, the housing market bubble in Memphis is in flux and could change people’s ability to live affordably. First-time home buyers are battling with investors, sending real estate prices sky-high. Investors want to buy property for rentals and Airbnb since the city is a significant tourist destination.
This popularity makes the city ideal for businesses and young professionals. There are several Fortune 500 companies headquartered in Memphis, including:
- International Paper
Other major businesses in the city include ServiceMaster, First Horizon National Corporation, and the Federal Reserve Bank. Memphis has a favorable climate for small businesses, so entrepreneurs can move to this city and achieve success. With several railroads, interstate highways, and the second-busiest airport in the world, anyone can find a job in Memphis.
Bills and Utility Costs
A single person can live well in Memphis, considering the lack of childcare costs, which can be expensive. Health and medical costs can also cause you to blow your budget, especially if you have to pay out of pocket for a doctor visit.
Since other bills are so low, you can pinch pennies in other areas to compile a nest egg if you live in Memphis. For example, utilities in Memphis cost about 13% less than the national average. Before you move, you can call Memphis Light Gas and Water and get utility data on any address, which will help you budget your monthly expenses.
Transportation costs in Memphis are higher than in many larger metropolitan areas because the city doesn’t have adequate public transportation. The MATA bus line doesn’t cover the entire metro area and suburbs, so most residents need a car.
If you live and work in the city center, you can use the bus and trolley for transportation, but you will eventually need a car or rideshare. The downtown area doesn’t have grocery stores or other shops, so you must travel to the suburbs to get your necessities.
Gas prices in Memphis are average, but you want to include car payments and insurance in your monthly transportation budget. Memphis doesn’t have an annual car inspection program, so you only need to pay a low fee to register your car yearly.
Many people live in areas surrounding Memphis to avoid paying city taxes, but this distance will increase transportation costs. Southaven, Mississippi, is one of the most popular places to live since it’s only 15 minutes away. However, living in the city will save you money in the long run. You can sell a house fast in Southaven to take advantage of what Memphis has to offer.
Housing Prices in Memphis
Many people in Memphis are renters because the monthly rent is lower than a portion of a home’s price. The average apartment rent in Memphis is about $900 a month, while the average rent for a three-bedroom house is close to $1,500.
The average price to buy a home in Memphis is $300,000. The monthly mortgage payment might be less than the rent, depending on how much you initially put down. However, many people need to save up the down payment before purchasing a house in Memphis, so they rent while they save.
A median home price of $300,000 might seem steep in a city with an average salary of $53,000, but compared to New York, Seattle, or even Nashville, Memphis home prices are relatively affordable. The Memphis housing market guide shows you what areas have affordable homes and what other amenities each neighborhood offers.
Since 2020, Memphis real estate prices have jumped as people from California and other high-cost-of-living states moved somewhere more affordable. As prices level out, more people buy and renovate homes in Memphis.
Rents in Memphis regularly increase about 11% yearly, so buying a property to rent out is a good investment. Some neighborhoods have rents lower than average, about $650 a month. But there are upscale neighborhoods with rental properties that go for about $2,500 monthly.
If you plan to buy a rental property in Memphis, research the neighborhood to see the average rent. You don’t want to pay more for a property than you’d get back with the rent payments. You also want to ensure demand for rental properties in that area. Since Memphis is so spread out and most residents own cars, you don’t need to worry too much about location.
Food and Shopping
Memphis grocery prices are about 9% less than the national average, with ingredients like eggs, milk, and bread being very affordable. Fast food is slightly more expensive than groceries because of the sales tax.
Sales tax in Memphis is 9.75%, including the state, county, and city tax rates. Groceries have a lower tax rate, following the 4% state sales tax with the local rate added. Tennessee is one of the states with the highest sales tax rate, which you should factor into your budget before moving.
Though Tennessee has a high sales tax rate, it doesn’t have a state income tax. You only need to file your annual federal income tax. The high sales tax and lack of state income tax balance out nicely, still showing Memphis as a great place to live.
Average Cost of Living in Memphis
Memphis was once the largest city in Tennessee, but the state capital of Nashville has taken that title for now. Still, the city is expanding, with many people moving for jobs, to open small businesses, and to take advantage of the low cost of living.
The average cost of living in Memphis is about $900 a month for a single person, excluding rent. These expenses include bills like:
- Gas and car insurance
- Food and groceries
- Miscellaneous expenses like healthcare
The average cost of living for a family of four is an estimated $3,000 monthly, without rent. These bills include those listed above but cost more since you’re covering more people. Family expenses can increase depending on childcare, private school tuition if you don’t take advantage of the public school system, and extracurricular activities.
Many cash home buyers in Tennessee want to get a great property without worrying about years of payments. Take advantage of the housing market and the benefits of living in a big city without paying the high cost of living.
If you’re looking for the hustle of a big city without breaking the bank, consider looking at Memphis real estate. You can buy a home and enjoy the low Memphis cost of living or rent the property to make a profit. There’s always demand for quality properties in this booming city for residents and tourists.