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VOL. 126 | NO. 180 | Thursday, September 15, 2011

Building Momentum

New home permits improve 21.7 percent in August

By Sarah Baker

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Local homebuilders were busy in August, filing more permits than the same month a year ago.

Carlos Moreno anchors the frame walls of a house being built at Windsor Park in Cordova by Regency Homebuilders. The subdivision has a number of homes under construction. 
(Photo: Lance Murphey)

Shelby County homebuilders filed 73 permits last month, a 21.7 percent increase from 60 filed in August 2010 and a 19.7 percent increase from 61 filed in July, according to real estate information company Chandler Reports, www.chandlerreports.com.

Permits filed in August averaged 3,160 square feet and $228,263, an uptick of 17.8 percent and 22.8 percent, respectively, from August 2010’s average permit size of 2,682 square feet and price tag of $185,926.

Regency Homes LLC led the county last month with the most permits, with 21 averaging 3,067 square feet and $214,655. The firm’s most active subdivision right now, Gardens of Grays Creek in Cordova North’s 38016 ZIP code, saw five permits averaging 2,339 square feet and $162,093.

“It was completely dead eight months ago and now has 64 lots,” said Regency principal Sean Carlson, adding that the subdivision is now called Windsor Park.

Three builders tied for second place, with Barry Duke’s Creekside Homes LLC, Karen Garner’s Magnolia Homes and Charles Morgan’s Vintage Homes LLC each filing five permits.

Magnolia Homes’ most lively area right now is Wolf River Ranch, or, as the company calls it, Village Park, in Collierville’s 38017 ZIP code. The area tied two other communities for the highest-performing subdivision in the entire county last month, with five permits averaging 3,836 square feet and $339,800.

The first model opened about six weeks ago with 48 home sites in the initial phase. The community is surrounded by a fence and landscaping and is within walking distance to Crosswoods Elementary, Collierville High School and Johnson Park.

Magnolia Homes already has sold six homes in the subdivision.

“We’ve got more affordable homes than there’s ever been north of Poplar, and everybody wants to be north of Poplar,” said company vice president Reggie Garner. “But, in the price range that we’ve been in, it used to be that you had to go south of Poplar. Our pipeline is unbelievable with people that we’re working with, probably more than we’ve ever had in the past for one community.”

A nearly completed home sits next to a frame house at Collierville’s Village Park at Wolf River by Magnolia Homes.
(Photo: Lance Murphey)

Besides the Gardens of Grays Creek and Wolf River Ranch, Evergreen Hills in Arlington’s 38002 ZIP code saw five permits averaging 2,835 square feet and $149,000.

That ZIP code also filed more builder permits than any other of the county’s 34 ZIP codes, with 18 averaging 3,127 square feet and $188,969. Next was Cordova North’s 38016 with 12 permits averaging 2,575 square feet and $166,026.

On the sales side, homebuilders sold 55 new Shelby County homes during August, averaging $202,876 and totaling $11.2 million in sales volume.

That’s down 33.7 percent in sales count from August 2010, when 83 new homes were sold, averaging $210,423 and totaling $17.5 million. And it’s an 8.3 percent decline from the number sold in July, when 60 homes sold, averaging $220,644 and $13.2 million.

Magnolia Homes seems to be one of the few exceptions to the rule, both in the number of sales and average price.

“Home sales for builders have gone down,” Garner said. “It’s the opposite for us. We’ve seen a huge change in the amount of buyers that are out buying now. Before, it seemed that the $250,000 and under price range was doing really well. For us, it looks like that $300,000 to $500,000 mark has really picked up.”

Garner predicted Magnolia Homes’ average sales price this year to be about $450,000, and 2012’s average to be $425,000. And gradually lowering sales prices has a ripple effect on the company’s team and customer base alike, Garner said.

“We really have revamped everything we’re doing, and by doing that, it’s working with all of our vendors, subcontractors and developers,” he said. “Just really being very cautious of what we put in the homes.”

Last month’s local totals are certainly rosier than the national homebuilding landscape. Sales of new homes this year are on pace to reach the lowest level since record-keeping began in 1963, according to recent reports from The Wall Street Journal.

After peaking in 2005 at 1.3 million units, the annual rate was just 298,000 units in July.

Chandler Reports is a division of The Daily News Publishing Co. Inc.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 114 332 10,554
MORTGAGES 119 412 13,739
FORECLOSURE NOTICES 0 68 2,712
BUILDING PERMITS 0 393 24,700
BANKRUPTCIES 80 264 10,156
BUSINESS LICENSES 16 78 3,814
UTILITY CONNECTIONS 92 430 14,987
MARRIAGE LICENSES 15 83 3,250

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