Home Sales See First Quarter Increase

New home sales drop, existing sales rise compared with 04

LANCE ALLAN

The Daily News

The sky is falling; the bubble will soon burst. Those predictions reflect the thoughts of some analysts on where the U.S. residential real estate market is headed. But so far in Shelby County, the opposite is true. Total number of sales, average size of homes and average price all increased in the first quarter.

Tracking with last year. Shelby saw 5,009 total residential sales during the quarter, compared with 4,816 in the same period last year, according to Chandler Reports, www.chandlerreports.com. Average home size increased to 1,926 square feet in the quarter from 1,886 square feet last year, and average price went up 3 percent to $142,951 from $138,724 in 2004.

This year we have been up and down on our numbers, but we have a tremendous amount of activity going right now, said Allen Keeton, managing broker of Crye-Leikes Quail Hollow corporate office. Im personally just busy as a bee and see my agents doing the same thing. Were at least tracking with the best year ever, which is last year.

Atypical boom time. The first quarter is traditionally not a strong period for home sales, and the early increase in sales has spurred optimism for the upcoming summer season.

It seems like the activity is exploding to me, and Im not sure why, said Grace Uhlhorn, an associate broker with ERA Chamberwood. Im getting a lot more calls about the listings that I have. More people are looking. More people are looking to put their homes on the market also.

Typically, the first quarter isnt really the most active time, I guess because of school activity and people are still getting over the holiday rush. So the second quarter, I see this as being really phenomenal. Thats what Im expecting, anyway.

Bebe McWaters, principal broker with McWaters & Associates, said her office started the year strong.

This year, we doubled our closings in January from last year, she said. I just hope it continues. January and February were two of the biggest months weve ever had. March, I have to say, slowed down a little bit.

Rate fears. McWaters said the March drop might have had something to do with buyers fears about rising interest rates earlier in the quarter.

I dont know whether everyone was scared about the rates, with everybody at the first of the year saying rates were going to go up, she said. They were closing like crazy in January and February. It has picked up full speed again in April.

Keeton agreed that fluctuating interest rates probably caused some of the early sales activity.

What that typically does, when you have interest rates that are a little volatile, it causes folks who are sitting on the sidelines to come out and do something, he said.

New versus existing. The home sales increase was not solely a result of new construction. A total of 837 new homes were sold during the first quarter, down 9.6 percent from 926 sold during the same period in 2004. But existing home sales increased 3,868 existing homes were sold this year, an 8.3 percent jump from the 3,570 sold in the same period last year, according to Chandler Reports.

The 296 sales in the Cordova 38016 ZIP code marked a 7.5 percent decline from last years 320, but the ZIP still led all areas in Shelby County. The Cordova 38018 ZIP code, which had the third-highest number of sales in the first quarters of 2005 and 2004, saw 284 sales this year, compared with 278 during first quarter 2004.

One reason for strong sales in Cordova might be the fact that the area offers a good mix of new and existing homes.

There are more houses for sale there, and then also you can get so much for your money, Uhlhorn said. People may compare an equal price home in Germantown or in Midtown and Collierville and East Memphis to what they can get in that 38016, and its almost a no-brainer. Im going to buy this almost-brand new or even a brand new home with all these cool amenities in it, rather than an old one that Im going to have to put a bunch of money into.

Finding a balance. The Cordova home sales market does face challenges, Keeton said.

What I see happening there in Cordova is a little bit out of balance, Keeton said. The same thing happened in Germantown in 1991 when we had more houses for sale than we had folks coming in to buy right then. Obviously, Germantown has not stayed out of balance, and I believe Cordova will get back in balance. Its just going to take some time.