VOL. 129 | NO. 29 | Wednesday, February 12, 2014
New Home Permits See Slight Bump
By Amos Maki
Despite bitterly cold temperatures that plagued the Memphis area last month, homebuilders pulled slightly more housing permits in January when compared to the same month last year.
Despite freezing temperatures that have kept building activity down, the number of permits filed in January was up.
(Daily News File/Lance Murphey)
Shelby County homebuilders filed 64 permits in January, up from 57 permits filed in January 2013 and 53 permits in December 2013, according to real estate information company Chandler Reports, www.chandlerreports.com.
Builders said that while the number of permits increased slightly year over year, freezing temperatures in January helped keep a lid on new home construction.
If the top layer of soil is frozen, grading lots can be problematic and freezing temperatures can wreak havoc on concrete pouring and laying bricks.
“It’s hurting us all the way around,” said Kim Grant Brown, owner of Kim Grant Homes LLC and president of the West Tennessee Home Builders Association. “It’s increasing our production time by up to a month. With the temperatures staying below freezing it’s hard to do anything.
“The good news is the people who are out house hunting now are buyers. Even though traffic is down, the people who are out now are ‘need a house now’ buyers.”
Charles Morgan of Vintage Homes LLC said the weather was a factor in January but he expects homebuilding activity to pick up dramatically in the spring.
“The cold weather has kept a lot of folks indoors and made them easier to reach by phone, but as soon as the weather breaks, look out, there will be a big rush to build brand new homes with the latest in open floor plan design and technology improvements,” Morgan said.
January permits averaged 2,637 square feet and $219,494, compared to January 2013 averages of 2,970 square feet and $235,020.
The Peppermill subdivision in Cordova South saw the most new home permits filed in January, with 10 averaging 1,875 square feet. The Carlyle Place subdivision in Cordova North came in second with eight permits averaging 1,354 square feet and $134,200. The Wolf River Ranch subdivision recorded four permits, averaging 3,989 square feet and $369,500.
Cordova North’s 38016 ZIP code saw the most permit activity, with 15 permits averaging 1,941 square feet and $156,068. Cordova South’s 38018 ZIP code recorded 13 permits averaging 2,250 square feet and $244,908. Arlington’s 38002 ZIP code recorded 12 permits averaging 3,223 square feet and $232,946.
Regency Homebuilders LLC pulled 18 new home permits in January, averaging 2,790 square feet and $203,064. Kevin Hyneman also had 18 new home permits, averaging 1,644 square feet and $134,200.
Builders sold 65 homes in January, averaging 2,599 square feet and $296,118. That’s down from 75 new homes sold in January 2013 but equal to 65 new home sales recorded in December.
Regency Homebuilders led the way in sales, with 13 averaging 2,905 square feet and $261,863. Charles Morgan of Vintage Homes LLC recorded four sales averaging 2,472 square feet and $146,980. Karen Garner of Magnolia Homes sold three homes averaging 4,179 square feet and $456,781.
The homebuilding industry showed signs that it had regained its footing in 2013 after suffering through a prolonged slump triggered by the housing downturn and recession.
Homebuilders filed 870 permits in 2013, down 5.2 percent from 918 permits filed in 2012, but still far above the 698 permits filed in 2011. The average permit in 2013 measured 3,287 square feet and averaged $256,630, compared to 3,211 square feet and $245,627 in 2012.
“Everybody I’m talking to has a very positive outlook for this year on home sales,” Morgan said.
Builders remain upbeat about their prospects in 2014 but are watching several key items as they move forward, including job growth and the supply of developed lots in the area.
The supply of developed lots in the Memphis area remains a major concern for builders, who have been carefully measuring how many new homes are brought into the market so they don’t run through their existing supply.
According to MarketGraphics, 22,962 lots will need to be developed in Shelby, Tipton and Fayette counties in Tennessee, Crittenden County in Arkansas and DeSoto County in Mississippi, before the end of 2018 to keep up with demand.
“The lot shortage is now a serious problem for Arlington, Germantown and Collierville,” Morgan said. “We are about a year away from serious lot shortages elsewhere.”
Grant Brown said she and her family – Richard Grant, Keith Grant and David Grant – recently decided to develop 150 lots in their Wilson’s Way community in Arlington themselves.
“We’re afraid we’re going to run out of lots before too long,” Grant Brown said. “We decided we’d be proactive and put them where we need them.”
Chandler Reports is a division of Memphis Daily News Publishing Co. Inc.