Memphis Area Association of Realtors president Regina Hubbard got an unabashed response from the crowd at the Germantown Performing Arts Centre during the real estate group’s 2013 Residential Real Estate Summit.
Dr. Lawrence Yun, chief economist of the National Association of Realtors, speaks about trends in the real estate market at the 2013 Residential Real Estate Summit at the Germantown Performing Arts Centre.
(Photos: Lance Murphey)
Hubbard, who has been a major contributor to the local real estate industry for almost two decades, said things are looking up for Memphis and the broader Memphis region when it comes to residential real estate.
And when she did, a loud “woo hoo!” echoed through the auditorium.
Indeed, a more subdued version of that response pervaded the rest of the summit’s speakers, the featured speaker of which was Lawrence Yun, chief economist for the National Association of Realtors.
The Tuesday, April 2, event was sponsored in part by The Daily News, along with Community Mortgage, Wells Fargo Home Mortgage, the Tennessee Housing Development Agency and the law firm of Fearnley, Martin & McDonald PLLC.
“The market has clearly turned for the better,” Yun said. “Memphis, though, is about a step slower than the rest of the country. But Memphis entered the downturn about a step behind the rest of the country, too.”
Parking spots were hard to come by at the Germantown venue for attendees, and the turnout was such that soon after the event got under way almost all of the lower section of the main GPAC auditorium was filled. And the upper level of the space was about half full.
To underscore the lift that residential real estate can bring to the economy, Hubbard noted that the economic multiplier effect of the sale of a $127,000 home is more than $45,000, the latter figure including money from costs related to the home sale. When someone buys a home in an area, for example, they may spend money at restaurants near where they live, go to events in the area, pay for remodeling, repairs and more.
Don Caylor, president of the Memphis Area Home Builders Association, said this year the organization is expecting better than a 20 percent increase in building starts. Which is welcome news and puts firmly in the rearview mirror the double-digit slump local homebuilders saw between 2005 and 2009.
Kesha Hamilton, Realtor with Keller Williams Realty, center, speaks with Joe Rojos, closing agent with Alliance Title & Escrow LLC during a networking break at the 2013 Residential Real Estate Summit at GPAC.
The most recent home permit numbers for Shelby County showed a flat February compared to the same month in 2012. Shelby County homebuilders filed 70 permits in February averaging 3,142 square feet and $222,975, according to real estate information company Chandler Reports, www.chandlerreports.com. That compared to 72 permits filed in February 2012, averaging 3,520 square feet and $294,109.
Nevertheless, MAHBA executive director Don Glays said at the time – like Caylor is predicting – that the association is still optimistic its members will see a double-digit performance increase collectively year over year by the end of 2013.
Among Yun’s predictions for the near future that will have an effect on the local real estate and financial industries: he expects inflation to tick “noticeably higher” in 2015. That’s because at some point, the Federal Reserve is expected to pull out the liquidity it’s pumped into the system to support the economy, at which time safe haven investments would be more attractive and interest rates would start to rise.
Yun doesn’t see that rise starting to happen much this year, but he thinks it will in 2014. Why?
“One reason is good, and that’s because the economy is growing,” he said. “Businesses are flush with cash.”
Using a football analogy to illustrate the position of the American economy, though, Yun said America “has not kicked a field goal” in years, while China is scoring touchdown after touchdown. The good news, he added, is that at least things are moving in the right direction at the moment.