Nashville’s Thriving Economy Holding Off National Foreclosure Trends

Although Tennessee ranked among the nation’s top 10 in 2005 foreclosure rates during the second quarter, Nashville, the state capital, has a rate better than both the state and national averages.

Nashville’s current foreclosure rate stands at one in every 501 homes being foreclosed. Memphis, on the other hand, has a drastically higher rate of 1 in ever 145 homes entering some stage of foreclosure.

This large difference between two cities in the same state is a testament to the fact that while the country is experiencing drastic rises in foreclosure rates, it is not a universal effect, and that the real estate market is holding out in certain regions.

The reasons for this become apparent when you examine the two locations. Nashville and Memphis are two very different cities. Nashville is growing quickly as a result of new economic developments that have happened there over the past few years, attracting citizens, investment, and even a professional football team. Real estate values in the city are still high, because real estate is still in demand. Since the economy is on the rise in Nashville, people may be finding it easier to keep up with rising interest rates than in other areas of the state. Memphis is a different city entirely, with no recent surge in growth or economical strength, so it may be more affected by larger or more regional trends such as rising interest rates and falling home values.

Foreclosure buyers and real estate investors alike can learn from this example. Real Estate markets are largely dependent on local economies and populations, not just by national trends in interest rates. Foreclosures may be rare in Nashville, while they are plentiful in Memphis, but Nashville remains a better place to invest in a foreclosure. The likely return on the property will be higher than it would in Memphis.

This difference between Nashville and the national foreclosure average is growing. While the national average rose slightly from the first to second quarter, Nashville’s dropped nearly 45%.

Research into particular areas of interest and not just general trends is very important when it comes to buying and selling foreclosure property, or any other kind of real estate.