Memphis rents rise, while investors benefit from affordability
Written by Brian Boucher
Reviewed by Mynd Editorial Staff
“I’ll stay in Memphis,” the city’s most famous denizen, Elvis Presley, is quoted as saying, and stay he did after buying an 18-room mansion in 1957 for the princely sum of $102,500 (about $1 million in today’s dollars).
With its beloved Jungle Room and wrought iron gate in the form of a book of music, Graceland is the most-visited privately owned home in America, with over 650,000 fans streaming through the doors each year.
More modest residences throughout the city are selling at a rapid clip to far less famous folks than the King of rock ’n’ roll. While investors won’t find a mansion for $100,000, they can find homes for just twice that amount (in 2022 dollars).
Memphis real estate has “surged” since the beginning of the pandemic, according to Realtor.com, with savvy shoppers targeting rental properties. Home values have appreciated by over 39 percent since 2018, according to John Burns Real Estate Consulting, which reports that prices grew by 16.8 percent in 2021 alone.
The median home listing price as of April was $180,000, up 12.5 percent year-over-year, according to Realtor.com.
The median home sale price as of May was $221,000 up 4.5 percent year-over-year, according to the Memphis Area Association of Realtors.
Median days on market was 26, down from 27 a year prior, according to Redfin.
That median price makes Memphis a dramatically more affordable alternative to the state capital of Nashville, its rival city 200 miles to the east, where the existing median home price is $407,700, according to Burns.
Located on both the Mississippi River and several major railways, Memphis is a logistics powerhouse. Its port is the fifth-busiest inland water port in the country, and FedEx has its air hub at the Memphis airport, making it the busiest cargo airport in the world.
FedEx, which has some 30,000 workers in the area, is just one of three Fortune 500 companies based here, along with International Paper, which employs about 38,000, and AutoZone, with more than 100,000 workers nationwide.
Other major employers include ServiceMaster, which moved to Memphis in 2017 (and specializes in disaster restoration, cleaning services, and mold remediation); First Horizon National Corporation (which owns First Tennessee Bank); Methodist Le Bonheur Healthcare; Baptist Memorial Health Care; and St. Jude’s Children’s Research Hospital, the top-ranked children’s specialty hospital in the US.
“Memphis has a lot of specialty care, and they service a population larger than just that of the metro area,” says Walsh. “People travel there for care from all over West Tennessee.”
What’s more, Ford is investing $5.6 billion to build a 3,600-acre mega campus called Blue Oval City in Stanton, 50 miles northeast of downtown. It’s designed to be the largest, most advanced and most efficient auto production campus in the automaker’s history.
Unemployment in Memphis was at 4.2 percent in April, above the national rate of 3.6 percent.
Memphis has a strong, and resilient, rental market
All those jobs drive demand for housing, and rising rents make Memphis an attractive market for real estate investors. According to Burns, median rents have increased in each of the past three years: by 8.2 percent in 2019, 5.5 percent in 2020, and 6.2 percent in 2021. As of May 2022, Burns reports that the median single family home is renting for $1,211.
Downtown has been “pulsing back to vitality” over the last several years, writes TheNew York Times, with world-class architecture firms renovating the Memphis Brooks Art Museum and the popular Tom Lee Park on the Mississippi River.
The area has seen a “flurry” of commercial construction since late 2021, as the Times put it, with new hotels and mixed-use developments.
“The whole [greater Memphis] area is going to continue to see growth for the foreseeable future,” Chris Gray, with Leaders Credit Union, told an ABC affiliate in May.
Memphis is cited as a “city to watch” in the PriceWaterhouseCoopers/Urban Institute’s report “Emerging Trends in Real Estate 2022,” where it ranks #45 among the top 80 American cities in homebuilding prospects and #68 in terms of overall real estate prospects.
The report notes that single family homes make up 73 percent of new construction, well above the national rate of 57 percent.
“Things were off the charts for a long time, but once we entered March this year, things started cooling off,” says Ivana Johnson, affiliate broker with Coldwell Banker Collins Maury, located in nearby Collierville.
“Interest rates went up a bit, and that cut out competition among buyers who got used to interest rates as low as 2.7 percent,” she says. With rates over 5 percent now, which are more the norm prior to the pandemic, Johnson says an adjustment is under way.
“Homes stay on the market a little longer, but that’s good, because this way we can educate our buyers a bit,” she says. “You used to see houses stay on the market for only 48 hours. Now, some houses might stay on the market for a week if we’re lucky. So it hasn’t slowed completely, especially since we’re in peak season right now.”
Prices may get yet more affordable as interest rates send some would-be buyers to the sidelines.
“Active listings are ticking up, and houses are starting to sit on the market a little longer,” says Matthew Walsh, an associate economist with Moody’s. “We should start to see that hit prices soon.”
Grizzlies, pandas and buffalo, oh my
“The thing about Memphis,” says historian and writer Hampton Sides, a native of the city, “is that it's pleasingly off-kilter.” He calls it “the anti-Atlanta.”
That distinctive character annually draws more than 11 million visitors, who find there is more on offer than the legacy of Elvis, the history and blues clubs along Beale Street, and the meat-and-three joints that showcase the city’s barbecue.
Elvis is just one pillar of the city’s incredible musical legacy, with artists like Johnny Cash, Aretha Franklin, Howlin’ Wolf, B.B. King, Jerry Lee Lewis, and Muddy Waters having ties to it.
But it’s not all just about blues and rock history. Newer figures in various genres, like rocker Alex Chilton (of Big Star), rapper Yo Gotti, and 10-time Grammy winner Justin Timberlake also have links to Memphis.
Those who want to delve into the history can head to Sun Studio, where sound engineer Sam Phillips recorded the King’s first single in 1954. Bonnie Raitt and U2 are among the artists who have recorded there. Other pilgrimage sites are the Blues Hall of Fame and the Stax Museum of American Soul Music.
A music scene that still rocks
The lively music scene today includes concerts at venues like Levitt Shell, an outdoor amphitheater in picturesque Overton Park where Elvis first performed in public.
Beale Street alone has more than 25 bars and music clubs along its 1.8-mile stretch.
Paula & Raiford’s Disco may look like any other storefront by day, but at night, visitors walk a red carpet entrance to find a disco ball and a light-up dance floor inside. And beloved dive bar Earnestine & Hazel’s has a jukebox that is reportedly haunted.
Once they’ve visited Graceland, fans of the King enjoy the new $45 million Elvis Presley’s Memphis, a 40-acre complex of museums, shops and restaurants across the street.
Barbecue and brews are kings as well
Memphians pride themselves on the city’s culinary scene. Each May, the World Championship Barbecue Cooking Contest, reputed to be the world’s largest pork barbecue-cooking competition, draws 100,000 visitors.
There’s also a growing number of microbreweries, like the High Cotton Brewing Company and the Wiseacre Brewing Company, which anchors the lively Broad Avenue arts district.
Speaking of off-kilter, consider the unlikely sight of the herd of buffalo that roam Shelby Farms Park, one of the country’s largest urban parks, spread over 4,500 acres. Families head there on Saturday morning for free yoga lessons, among many other community gatherings.
Another animal kingdom point of pride is the presence of pandas Ya Ya and Le Le at the beloved Memphis Zoo, one of only four zoos in the U.S. that have pandas.
Basketball professionals, and bass fishing pros
Playing on the city's Egyptian namesake with its royal burial sites is the 32-story-high Bass Pro Pyramid, built in 1991 as a 20,000-seat arena but now housing a pro shop.
Among other offerings, it houses an aquarium, archery and pistol ranges, and a bowling alley. It is by some measures the world’s 10th-tallest pyramid.
Fans of team sports, meanwhile, can be entertained by the city’s up-and-coming NBA team the Grizzlies, who play at the FedExForum. They also have one of the league’s brightest young stars in the electrifying player Ja Morant, “the effervescent 22-year-old point guard whose dunks seem to be aided by a pogo stick,” according to the Times.
In December 2021, the Grizzlies set a league record when they beat the Oklahoma City Thunder by a stunning 73 points, and in March they clinched their first-ever division title in franchise history and the Western Conference’s second seed.
They fell in the second round of the playoffs to the Golden State Warriors, a former NBA champion.
But Memphis may be as renowned for its wrestlers as it is for its hoopsters. The rolls of the World Wrestling Entertainment Hall of Fame include Jerry “the King” Lawler and Jimmy Hart, aka “the Mouth of the South,” aka “the Memphis Chicken.”
A tragic history, and challenges to overcome
Memphis was founded in 1819 and named for the ancient Egyptian city whose name means “place of good abode.” It’s nicknamed the Bluff City, for its siting on bluffs overlooking the Mississippi. Previously, the region was inhabited by the people of the Mississippian Culture, and later the Chickasaw, thought to be their descendants.
Memphis was a Confederate stronghold for one year after Tennessee seceded in 1861; thousands watched as nine Union ships put down eight Confederate vessels, and the Union held the city for the remainder of the war.
The city has had a vexed history of race relations, with deadly riots in 1866, when white cops, firemen and other Irish immigrants terrorized and burned Black neighborhoods.
Journalist Ida B. Wells was forced to leave the city after mobs destroyed her office for investigating lynchings in the 1890s.
The city holds a central, and tragic, place in the Civil Rights movement. Sanitation workers, overwhelmingly African American, went on strike in 1968 in response to the on-the-job deaths of Echol Cole and Robert Walker.
Martin Luther King Jr. came to the city to show his support, giving his legendary “I’ve been to the mountaintop” speech at the Mason Temple on April 3, 1968. He was assassinated at the Lorraine Motel the following day.
Looting, arson and rioting followed, driving some to leave the city, and Memphis struggled for years thereafter. “The assassination of King just killed us economically as well as morally,” Pitt Hyde, the founder of the retail chain AutoZone, told The New York Times, which called Memphis “a city that wears its ache.”
A shrine to civil rights, and efforts to move on
This history is enshrined in the Civil Rights Museum (which benefited from a $27.5 million renovation in 2014), sited at the Lorraine Motel. Visitors start in a replica of the hold of a slave ship and end by viewing the room where King was assassinated.
Like many locales nationwide, the city has moved to dethrone the white supremacists who have long been enshrined in public monuments. Parks that glorified Confederate leaders Jefferson Davis and Nathaniel Bedford Forrest have been renamed, and their statues removed.
Despite its troubles, the city became the world’s largest spot cotton market and the world’s largest hardwood lumber market; into the 1950s, it was the world’s largest mule market.
Poverty and crime remain challenges
The city has issues it is trying to address. The Memphis Shelby Crime Commission announced a plan in February to develop a “community-based plan of action” to tackle crime.
“Among metro areas with a population of more than 1 million in the South, it has the highest poverty rate,” says Walsh, “and poverty and crime go hand-in-hand.”
But in Ivana Johnson’s eyes, that’s a distraction from the many great things the city has to offer.
“Every city has its bad areas where you don’t want to be at night,” she says, “and we’ve been on the news for some high-profile cases.
“But they let that overshadow everything,” she added, and said in general she feels safe in the city.
“As far as being afraid, I have no problem going anywhere by myself.”