Projected median sales prices for single-family homes:
Q1 2008: $143,550
Q4 2009: $150,730
Growth rate: 5.0 percent
Graceland aside, Memphis doesn't have many signature landmarks pumping up its property values. In fact, the city has been getting a bad rap because some real estate pros consider it one of the country's foreclosure capitals. But Memphis's housing market should hit bottom within the next few months, and the average home bought in 2003 still managed to sell for 12 percent more last year. Even better, prices have held steady this year, although the average number of days that homes sit on the market has grown larger. The PMI Risk Index, an econometric model developed by PMI Mortgage Insurance that predicts declines in home prices, consistently ranks Memphis as one of the nation's least vulnerable markets. And a survey by the forecasting firm Global Insight and National City Corp. has listed Memphis as one of the most undervalued markets in the United States for several years because of the low cost of housing relative to household income.
You can find some good values near Beale Street, the birthplace of America's blues scene, where a downtown condo-building craze has stranded a swath of empty units on the multiple listing service. But the best investment is one that taps into the collateral damage of the credit crunch. More couples and families will fail to qualify for mortgages and resort to renting single-family homes instead of buying them.