» Subscribe Today!
More of what you want to know.
The Daily News
X

Forgot your password?
Skip Navigation LinksHome >
VOL. 129 | NO. 10 | Wednesday, January 15, 2014

Building Permits Dip in 2013

By Amos Maki

Print | Front Page | Email this story | Email reporter | Comments ()

Last year turned out to be a mixed bag for Shelby County homebuilders, who filed fewer permits in 2013 than they did in 2012 but sold slightly more homes.

Homebuilders filed 860 permits in 2013, down 6.3 percent from 918 permits filed in 2012, but still far above the 700 permits filed in 2011, according to real estate information company Chandler Reports, www.chandlerreports.com.

(Daily News File/Lance Murphey)

Homebuilders filed 860 permits in 2013, down 6.3 percent from 918 permits filed in 2012, but still far above the 700 permits filed in 2011, according to real estate information company Chandler Reports, www.chandlerreports.com.

Builders said a variety of issues – such as the creation of a unified school district, slow job growth, a shrinking number of available lots and the federal government shutdown – affected the industry in 2013.

“All those things had an impact,” said Charles Morgan of Vintage Homes LLC. “Lack of job growth was the largest single factor and the uncertainty over public schools in Shelby County hurt sales and aided in the slowdown.”

Permits Improve Slightly in December

Shelby County homebuilders recorded slightly more permits in December than they did in the same month in 2012, but home sales experienced a steep drop.

Shelby County homebuilders filed 55 permits during December 2013, a 5.7 percent increase from the 52 in December 2012, according to real estate information company Chandler Reports,www.chandlerreports.com.

December permits averaged 4,116 square feet and $314,198,  That compares to permit averages of 3,073 square feet and $222,262 in December 2012.

Hallmark Builders Inc. filed the most permits in December (13; 5,035; $302,799), followed by Regency Homebuilders LLC (eight; 2,792; $208,657).

Arlington’s 38002 ZIP code had the most new home permits with 18 averaging 3,740 square feet and $249,618. Collierville’s 38017 ZIP code had 12 permits averaging 4,314 square feet and $442,750.

Active subdivisions were Forestbrook in 38138 (seven; 5,146; $298,962), and Windsor Place in 38002 (five; 5,042; $310,730).

There were 25 new home sales recorded in December, a 63.2 percent decrease from 68 homes sold in December 2012. The average sales price of a home in December was $270,834, up 4.9 percent from $258,206 in December 2012.

Regency Homebuilders sold the most homes in December, with nine sales averaging $215,583. Leader Five-Star Homes was second with three sales averaging $177,300.

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

Builders said the major issues touching the industry likely caused uncertainty with buyers and builders.

“I think it was a combination of factors, including a significant decrease in lot choices, the indecision created around the municipal school systems and the general economic uncertainty,” said Kim Grant Brown, president of the West Tennessee Home Builders Association. “Unfortunately, uncertainty of any kind can cause buyers to sit on the fence.”

The average permit in 2013 measured 3,293 square feet and averaged $256,644, compared to 3,211 square feet and $245,627 in 2012.

While the number of permits issued in 2013 was down from 2012, new home sales were up in 2013. Builders sold 820 homes last year, up 2.2 percent from 802 homes sold in 2012. The average sales price for a home in 2013 was $279,138, up 11.3 percent from $254,112 in 2012.

“Although permits were down in 2013, new home sales were up,” Grant Brown said. “I see this upward trend continuing into 2014.”

Regency Homebuilders LLC was the top builder as tracked by permits in 2013, with 221 averaging 2,941 square feet and $220,571. Regency was followed by Grant Homes (62; 2,982; $234,433) and Charles Morgan of Vintage Homes (60; 2,667; $180,228).

Permits Drop in Fourth Quarter

Local homebuilders saw a 22.2 percent decrease in filed permits in the fourth quarter year over year.

Shelby County homebuilders filed 168 permits during the final quarter of 2013, compared to 216 in the fourth quarter of 2012, according to real estate information company Chandler Reports, www.chandlerreports.com.

The average permit in the fourth quarter measured 3,525 square feet and  $280,091, compared to 3,235 square feet and $244,365 in the same period in 2012.

The top builder, as tracked by home permits from October through December, was Regency Homebuilders LLC (44; 2,862; $220,091). Next was Hallmark Builders Inc. (13; 5,035; $302,799).

The ZIP codes notching the most permits in the quarter were Arlington’s 38002 (53; 3,430; $283,028) and Collierville’s 38017 (27; 3,954; $377,852).

Active subdivisions during the quarter were Walker Farms in 38002 (14; 2,660; $206,667) and The Grove at Lakeland in 38002 (nine; 4,272; $316,236).

Builders sold 195 new homes during the fourth quarter, down 14.1 percent from 227 new homes sold in the same period in 2012. The average sales price of a new home in the fourth quarter was $330,104, up 27.7 percent from $269,166 from 2012.

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

Regency Homebuilders also led the way in sales, with 209 averaging $235,975. Grant Homes sold 78 homes averaging $228,983, and Charles Morgan of Vintage Homes sold 57 homes averaging $150,182.

The Wolf River Ranch subdivision in Collierville saw the most activity in 2013, with 49 permits averaging 4,022 square feet and $373,949. The Kensington subdivision in Arlington recorded 37 permits averaging 2,976 and $201,546. The Gerland Creek subdivision in Southeast Shelby County netted 35 permits averaging 2,559 square feet and $172,239.

The 38002 ZIP code in Arlington led the way in permits, with 197 averaging 3,485 square feet and $249,756. Collierville’s 38017 ZIP code had 167 permits, averaging 3,620 square feet and $317,745. Cordova North’s 38016 ZIP code netted 100 permits, averaging 2,676 square feet and $183,868.

Looking ahead, Grant Brown said increases in interest rates and rising home prices could cause permits and sales to increase in 2014.

“As interest rates continue to rise and home values continue to increase, I think we will see the number of permits and new home sales continue to increase in 2014,” Grant Brown said. “The average home sales price increased by almost 12 percent in 2013, giving homeowners more equity in their current home and more confidence in the real estate market.”

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

Sign-Up For Our Free Email Edition
Get the news first with our daily email


 
Blog Get more from The Daily News
Blog News, Training & Events
RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 69 311 15,028
MORTGAGES 83 338 19,668
FORECLOSURE NOTICES 15 58 3,853
BUILDING PERMITS 0 512 35,842
BANKRUPTCIES 65 247 14,281
BUSINESS LICENSES 16 120 5,111
UTILITY CONNECTIONS 70 316 21,749
MARRIAGE LICENSES 18 93 4,650

Weekly Edition

Issues | About

The Memphis News: Business, politics, and the public interest.