VOL. 119 | NO. 136 | Monday, August 1, 2005
Home Sales Continue Record Climb
The Daily News
"If you would have told me 12, 14 years ago that I'd be selling as much as I do (Downtown), I'd have said, 'You've got to be nuts.' It's just unbelievably hot."
- Sheldon Rosengarten
broker, Marx & Bensdorf
2003 was a historic year for residential real estate. 2004 matched that pace, setting an all-time high for home sales in the Memphis market. And most recently, second quarter 2005 numbers outpaced the same period of 2004 by a wide margin.
So what does it mean for the Memphis real estate market?
"This has been a tremendous year, but we've had a series of tremendous years," said Joel Hobson, principal broker and owner of The Hobson Co. "What is really amazing is our contracts pending at the end of the second quarter are up 38 percent over the end of the second quarter last year, so the third quarter looks to be incredible."
Continued increase. A total of 6,704 homes were sold during second quarter 2005, up 10.6 percent from 6,059 sales in the same period last year, according to Chandler Reports, www.chandlerreports.com.
"Most of the country has experienced similar kinds of growth," said Lee McWaters, owner of McWaters & Associates. "In some parts, they're scared it's over-inflated. I don't think Memphis has that problem right now. It's good in the fact that you don't have to worry about things getting overpriced."
Interest rates for a 30-year, fixed-rate mortgage - which McWaters said some analysts had expected to hit 7 percent or higher by now - have remained low. That's one reason for the increase in sales, he said.
Influx of employees. Sheldon Rosengarten, broker with Marx & Bensdorf Real Estate & Investment Co., said at least part of the increase can be attributed to the fact that International Paper recently transferred employees from Savannah, Ga., to Memphis, and those employees haven't flocked to any particular area. Collierville, Germantown and Fayette County have all seen home sales from the move, as well as Arlington and Bartlett.
"We saw 200 to 300 people coming in since the beginning of the year," Rosengarten said. "That's part of the increase, when you've got a company making a group move into the city."
Although the number of overall sales in the market increased, the average size, average price and average price per square foot all saw declines, according to Chandler Reports, which is owned by The Daily News Publishing Co.
Average price was $152,400 in the second quarter, down 0.7 percent from $153,544 in second quarter 2004. Average size dropped to 1,936 square feet in the period, a 1.1 percent decline from 1,958 square feet in 2004. And average price per square foot was $70.58 during the second quarter, down 1.4 percent from $71.57 in the same period last year.
Highest sales. The top performing ZIP code remained Cordova's 38016, which saw 465 sales, up from 424 sales in second quarter 2004. Collierville's 38017 had the second-highest number of sales with 423, compared with 393 in the year-ago period.
Moving up from fifth place in second quarter 2004 to third place this year was the University of Memphis area's 38111 ZIP code. It saw 372 sales this year, compared with 330 last year.
Prospective buyers aren't sticking to any one area in their home searches.
"People are considering other locations, more than just one," said Nancy Guy, an affiliate broker with Crye-Leike, Realtors, and a board member for the Memphis Area Association of Realtors. "Some of my buyers would just look at Germantown or Collierville. They're now entertaining maybe Arlington or Lakeland or some of the newer subdivisions. People are being a little more open to other areas rather than just one. We're not having people just say, 'This is one area I want.' That's my experience. There's a lot more locations to choose from for most of the buyers I've been working with."
Cyclical market. While the overall market is steady, there are some submarkets where patience is a requirement for sellers.
"With the low interest rates and with a general good economy, the market here has been very good," Rosengarten said. "But not everything sells quickly. I think a lot of it has to do with the condition of the property, the presentation onto the marketplace and, of course, the pricing. There are certain areas hotter than others. It's also very cyclical."
For Rosengarten, one of the hottest areas has been Downtown, with homes in both Harbor Town and the South Main area selling well. To him, that's been a shock.
"If you would have told me 12, 14 years ago that I'd be selling as much as I do down there, I'd have said, 'You've got to be nuts,'" Rosengarten said. "It's just unbelievably hot."
Area renaissance. Continued redevelopment of the Uptown neighborhood near St. Jude Children's Research Hospital is beginning to show results.
Greenlaw's 38105 ZIP code, which includes part of Uptown, saw the highest percent increase in home sales with 18 sales during the second quarter, up 157.1 percent from seven during the same period last year. The ZIP's average price of $83,685 also showed the highest increase, a rise of 117.6 percent from $38,465 in second quarter 2004.
Of ZIP codes with at least 100 home sales, the Westwood area's 38109 ZIP saw the biggest increase in sales. The area saw 256 sales during the second quarter, good enough for 10th place and up 59 percent from 161 in the year-ago period.