The term East Memphis is a broad term (coined in the 50's) even within the zip code of 38117. As a general rule - 20% is astronomical, however in the higher price ranges - million plus, you might be able to do it. If you are referring to a $100k, well that might be a little harder. Remember, a seller can ask anything they want for their house - doesn't make it logical and in most cases a seller will put in in the begining their "wiggle room". As a listing gets stale, then they usually have a reality check.
Houses that are priced right in the begining are the ones that sell fast. East Memphis is a sought after area, so it has the first principle going for in - Location, location, location.
The guys below are right on the mark - get you an agent familiar in the area and find out what you true needs are. Then you can go hunting for that one of kind deal. If a home doesn't fit you true needs - all you have bought is real estate.
Lipseyshaner Team, LLC
Keller Williams Realty
I'm not sure who would have told you that the home values are 20% down, however as Joe says we have not seen that to be the case in the Memphis market. There are many good values in the market but a great deal depends on the specific location, especially in when the area is east Memphis. The east Memphs area is so diverse and very different block to block that it would be a major mistake to make such broad brush assumptions. Also keep in mind that a seller can place a value and ask whatever price they wish for their home. It is for the buyer to determine the value they place on the property and offer what the buyer thinks is a fair value based on the market conditions in that particular neighborhood.
I will make the same recommendation. Pick a Realtor to represent you and let them do the work to determine the value of a particular piece of property. Most Realtors know the market and can give you a fair evaluation of a particular property. As a Buyer you do not pay any fees for this service. This is YOUR best chance for sucess.
Mortgage Loan Officer
BenchMark Realtors, LLC
BenchMark Mortgage, LLC
Contrary to what you may have been told, the Memphis market is quite stable in many neighborhoods. While I have not seen prices rise significantly in the more popular neighborhoods, I certainly have not seen them drop 20%. Value really depends on a lot of factors. I suggest having a real estate professional run the numbers on the house you are interested in, and make an offer based on the results. You imply that there is a 40% margin between actual price and where you think the price should be. If the house is, indeed, that over priced, it might be time to move on.