Now that the holidays are over and spring is around the corner, local real estate agents hope low interest rates and attractive sales prices will heat up the lukewarm housing market.
Shelby County saw 851 home sales in January, down just 3 percent from 881 the same month a year ago, according to real estate information company Chandler Reports, www.chandlerreports.com.
Last month’s total also marked a 9 percent decline from 938 homes sold in December.
William Mitchell, managing broker of Crye-Leike Realtor Inc.’s Hickory Ridge location and vice president of the company, said tight lending practices have affected the market, but that positive signs abound, including a smaller drop than usual for the month.
“We’re kind of used to a little bit higher numbers if you go back to some of the earlier years, but it’s difficult out here for financing,” Mitchell said. “It looks like ‘let’s hope we’re bottoming out,’ and February may show an increase in sales because activity has been good, the phones have been ringing, buyers are beginning to recognize that at 4.5 percent interest rate and these below-market values make good sense and it’s cheaper to buy than even to rent.”
Homes sales last month averaged $109,861, a 3 percent drop-off from $113,375 in January 2010 and a 15 percent drop-off from $129,765 in December.
January’s total dollar volume of $93.5 million was down 3 percent from $99.9 million in January and down 9 percent from $121.7 million in December.
While total sales are down, existing sales only declined 1 percent year over year, with 804 sales in January compared to 809 the same month a year ago. Existing home sales averaged $102,859 and totaled $82.7 million.
On the other hand, new home sales for the month took a huge hit. The county saw only 47 new homes sold in January, down 34 percent from January 2010’s total of 72.
New homes sales also saw a 38 percent dip from December’s 76 sales. January’s average new home sales averaged $229,645 and totaled $10.8 million.
Mitchell attributed the decline in this category to the ongoing foreclosure crisis.
“The foreclosures are still impacting the marketplace, that’s something we still have to get our arms around and try to figure out how to resolve the foreclosure issue as a country,” Mitchell said. “That’s really what’s causing prices to go down.”
But builders are ready to start building again, and John Stamps, principal broker at Prudential Collins-Maury Inc.’s East Memphis office and vice president of the Memphis Area Association of Realtors, is bullish on new home sales increasing this year.
“The lot sales have repositioned themselves from some of the sales of the banks and put builders in better positions to build a more affordable product for consumers,” Stamp said.
A silver lining in January’s number can be found in nonbank (or traditional) sales, which increased 8 percent from last year, from 555 to 600 sales. It also made up 70.5 percent of the overall sales total, while January 2010’s nonbank total reached 62.9 percent.
Nonbank sales averaged $126,002 last month, a 6 percent decrease from $145,449 in January 2010. The total dollar volume for nonbank sales also slipped, seeing $175.6 million in January compared to $80.7 million in 2010.
Collierville’s 38017 ZIP code saw the most nonbank activity, reaching 47 sales that averaged $249,771 and totaled $11.7 million.
Meanwhile, bank (or foreclosure) sales totaled 251 last month, a 23 percent drop-off from 326 in 2010. Bank sales averaged $71,278 in January, a 7 percent improvement from $58,769 during the same period a year ago.
Southeast Shelby County’s 38125 ZIP code produced the most bank activity with 24 total sales averaging $139,319 and $3.3 million sales volume.
Despite an ambivalent start to 2011, Landis Foy, managing broker and vice president of Crye-Leike Realtors Inc.’s Quail Hollow office, is confident that Memphis’ interest-rate driven buying market will improve sales heading into spring.
“We still have some lack of confidence in the economy and in the housing market to at this point see robust growth, but I do feel that we will continue a positive increase,” Foy said.
“We have a lot of pent-up demand in the marketplace and people that have money or access to money are just not quite jumping out yet, but I’d like to think that in the spring that we will see that, but we’ll have to wait and see.”
Chandler Reports is a division of The Daily News Publishing Co. Inc.