VOL. 121 | NO. 36 | Friday, February 10, 2006
In Local Real Estate Market
By Andrew Ashby
PANORAMIC VIEW: Roland Shapley Jr. stands on his balcony Downtown. Formerly a Midtown homeowner, Shapley decided to move to the Vance Station Condos in December 2004. -- Photograph By Andrew Ashby
Like many Memphians, Roland Shapley Jr. has moved Downtown.
Shapley, who owns Kustom Kinetics, a medical equipment supply company, searched the market for a year before buying his two-bedroom, two-and-a-half bath condominium with a two-car garage in December 2004. He moved from an older house in the Evergreen Historic District.
"I liked the Downtown lifestyle and I was looking to get out of an old Midtown home and into a newer condo where I could walk anywhere I wanted to go," Shapley said.
When Shapley acquired his three-story, 1,600-square-foot unit in the Vance Station Condos last year, he was one of about 25,000 homebuyers in the Memphis area.
The bigger picture
Last year's residential sales in Shelby County were up 6.8 percent from 2004, according to Chandler Reports, www.chandlerreports.com. In 2005, there were 24,825 sales compared to 23,234 in 2004. The average price of these sales rose 3.6 percent, from $150,012 in 2004 to $155,386 in 2005.
In the 38103 Zip code, which includes the South Main Arts District and Mud Island, the number of residential sales rose nearly 28 percent last year, from 423 units in 2004 to 540 in 2005.
Andy Kitsinger, director of planning and development for the Center City Commission, pointed out that his organization's 2004 market study also showed Downtown is one of the fastest growing residential markets in the area.
"Down here, the South End residential development is growing at the fastest rate," he said.
The CCC projects about a 16 percent to 17 percent growth rate in that area, with a mix of townhouses, condos and even a few single-family homes.
"We're anticipating an additional 3,000 to 4,000 more residents in the south portion of Memphis in the next three to four years," Kitsinger said. "The South End is building out at a higher density, so that area is one that is the fastest growing Downtown."
Uptown weighs in
"Overall, we had almost 25,000 sales in a given year and that's encouraging. We're not Seattle, we're not Las Vegas or anything like that, but statistically, I think we're very consistent and predictable and that's a good thing."
- William Mitchell
president of the Memphis Area Association of Realtors
While the South Main area is growing at a fast clip, Chandler Reports' most significant numbers are in the 38105 Zip code. That area showed a 161.7 percent increase in residential sales, with 47 properties sold in 2004 and 123 sold in 2005. The average sale price rose nearly 115 percent, from $36,124 in 2004 to $77,624 in 2005.
Much of that growth is because of the Uptown Partnership. In the past two years, 549 apartments were constructed in that Zip code, and 64 homes were built in 2005, said Alexandra Mobley, asset manager for the group.
She attributed much of the residential sales activity to St. Jude Children's Research Hospital's continuing expansion.
"I know a lot of people who have moved into our apartments and bought houses from us are St. Jude employees who want to live closer to their work," Mobley said.
While much of the 38105 Zip code's sales growth is because of work in Uptown, Mobley pointed to other factors. Some previously unoccupied buildings in the area have been rehabilitated and then occupied. Uptown could have interested buyers who might not have considered the area before the revitalization started.
She also noted the Turning Point condos on Auction Avenue and Front Street and the Uptown Place condos on Main Street and Auction. Those are mixed-use buidings, with commercial development on the bottom and residential space on top.
"I think it's kind of been a combination of all sorts of things that might have been started by the Uptown Partnership, but has done what we hoped and spread to other people," Mobley said. "There are other investors, which is the idea: to make this place sustainable."
The growth should continue. In 2006, Uptown could expand by 240 single-family homes and a 69-unit senior citizens' facility, Mobley said.
"I imagine in 2006 those numbers will spike again, maybe at an even higher percentage," she said.
Don't dismiss 'burbs just yet
William Mitchell, president of the Memphis Area Association of Realtors, is impressed by the active markets in Shelby county's outlying areas.
The 38002 Zip code in Lakeland and Arlington had 1,373 sales last year, continuing a trend that saw 1,394 sales in 2004, according to Chandler Reports, which is owned by The Daily News Publishing Co. In 2005, Cordova's 38016 and 38018 Zip codes had sales of 1,703 units and 1,284 units, respectively.
"That stands out to me," Mitchell said. "It shows that people have an appetite for the newer products that bring the more modern conveniences."
That's not to say the older neighborhoods in Midtown are declining. Residential sales went up 4.1 percent in the 38104 Zip code, from 556 units in 2004 to 579 units in 2005. Mitchell also commented on a 6.5 percent price increase on homes in that area.
"The point is that all of these markets performed admirably - they didn't lose money," Mitchell said. "Overall, we had almost 25,000 sales in a given year and that's encouraging. We're not Seattle, we're not Las Vegas or anything like that, but statistically, I think we're very consistent and predictable and that's a good thing."
From his second-story balcony, Shapley has been watching a busy development sector. When he moved to the area, residential development was spotty.
"These were the only condo developments that I knew were going on in December of 2004," he said. "Contrast that with December of 2005. In South Main, condo units are going up right and left. The face of Downtown Memphis has changed a lot in the past year and I think it's going to change even more."