Real estate analytics firm, REIS released their first quarter report showing asking an effective rents rose in 60 out of the 79 markets they track. Of the 60 markets only 5 of them saw both advertised and effective rents rise more than 1%. Memphis was one of those 5. The other 4 cities were Miami, Tucson, Palm Beach, and Seattle.
The rise in rents comes just in time as mortgage rates hit highs not seen in 8 months. The rise in mortgage rates is certain to affect projected cash flows on properties not yet purchased. I’ve personally experienced both rent declines and gains in Memphis. Right now the rents seem to be rising in the homes at, near, or above the median priced homes in Memphis. Those valued around $115,000. Properties on the lower end may continue to see rents decline due to floods of foreclosures in these neighborhoods. With foreclosures peaking in 2010, the lower end neighborhoods will continue to be hit hard.
Homes in the median-priced areas in Memphis are seeing the top of projected rent ranges being hit on a consistent basis offering low rates of vacancy as well.
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