Despite a slower market and elevated vacancy compared to recent years, the underlying fundamentals in Memphis are pointing toward a coming supply-demand imbalance, particularly in quality rental housing.
The new .25 rate cut offers strong potential for real estate improvements in the Memphis area, primarily through relief on borrowing costs, but it won’t resolve deep-rooted challenges like housing shortages that some politicians are saying Memphis might soon face. Why shortages?
- New Jobs: Google, Nvidia, Elon Musk, Grok, St. Jude’s Hospital, Neural Nexus, SK On, and other world-renowned names. The Digital Delta Initiative along with strong overall fundamentals from Medical, Logistics and other Memphis industry has the potential to create and IS creating thousands of new jobs.
- Memphis Mayor Paul Young: has emphasized the city’s need for more quality rental units, noting limited new supply and new job growth.
- Demand Dynamics: Lower interest rates will boost buyer demand, drawing sidelined investors back and supporting real estate prices for modest to strong growth.
- Supply Dynamics: On the supply side, the modest rate decrease is not enough to encourage most developers and builders to ramp up construction.
- Broader Market Sentiment: Fed chair Jerome Powell warned that “housing is going to be a problem” in the US without policy tools to address supply constraints.
- Roadblocks to Construction: Rising prices of lumber, concrete, and steel along with new labor shortages.
- Market Cycle Investment: Market cycles reward investors who act BEFORE headlines bemoan supply shortages.
Just announced! Houston company plans to turn two blocks of downtown Memphis into a tech hub.
