Will foreclusures make Frayser the city's next "renter nation"?
In 1972, residents of Frayser expressed their unhappiness with school busing for desegregation by burying a school bus. The famous picture landed in Time magazine.
Ever since then, it's Frayser that's been getting buried. A wave of foreclosures is the latest economic calamity to strike the once-thriving working-class community in North Memphis.
In the Seventies, court-ordered busing sent residents scrambling away from public schools to private church-related schools and to newer neighborhoods like Raleigh.
In the late Seventies and early Eighties, industrial giants Firestone, International Harvester, and Kimberly-Clark closed, eliminating thousands of jobs.
Then the Naval Air Technical Training Center in Millington moved away, taking with it many of the active and retired military personnel that had owned homes in Frayser, just a few miles south on U.S. Highway 51.
When the housing bubble burst around 2007, Frayser was one of the hardest hit areas in the country. In 2006, 568 homes sold at an average sale price of $47,601. In 2009, 404 homes sold at an average of $17,098, or a little more than the cost of a good used car. There have been 270 sales this year, and prices are up a bit to an average of $21,946, but a huge oversupply of cheap houses is on the market, many of them foreclosures.
Houses can be bought for under $10,000 on streets where they were appraised five years ago for $60,000.
Grim as they are, the numbers can be misleading. Frayser is a big area, encompassing major streets like Danny Thomas, Overton Crossing, and Frayser Boulevard and neighborhoods such as Scenic Hills, Sky Lake, and Georgian Hills. A driving tour reveals some nice 50-60-year-old developments on heavily wooded hills where the majority of houses and yards are well maintained. A few properties have sold this year for more than $150,000.
But the low end is glutted, and likely to get worse.
"It all has to do with supply and demand," says Larry Alexander, a Realtor/broker with ReMax On Track. "Most of the people who would live in a $60,000 house have been cut out of the market by the tightening of the lending laws. So it drove the price down and down and down."
Lending laws were tightened in response to what Alexander sees as ridiculously lenient loan requirements a few years ago.
"Anyone who wanted to get into a house who had not declared bankruptcy that week could get into one with no money down," he says. "Banks and lenders were told to ease up, 'we want everybody in a house that wants a house.' I think [that mandate] originated under the Clinton administration and continued under the Bush administration."
Whoever is to blame, the result was that people who were financially irresponsible, out of work, financially unsophisticated, or all of those things defaulted on their loans. Houses were bought up by investors in California, Florida, and other states hoping to "flip" them for a profit, but the prices continued to fall. The future for Frayser, in Alexander's view, is "renter nation."
"It's hard to find a block in Frayser that does not have one or two rental houses on it due to a foreclosure," he says.
Steve Lockwood is head of the Frayser Community Development Corporation, which buys empty houses and fixes them up in an effort to stabilize neighborhoods. It also provides financial counseling for homeowners.
"I think Frayser has bottomed out," he says. "I am buying a house with a yard for $15,500. I'll fix it up, put on a new roof, insulate it, and put a family in it on a lease-purchase deal with a monthly payment of about $450."
Federal Neighborhood Stabilization Funds help, but Lockwood says the problem is staggering. "We feel like we're shooting elephants with a peashooter."