VOL. 123 | NO. 223 | Thursday, November 13, 2008
Oct. Home Sales Down Almost 23% From Last Year
By Eric Smith
The real estate market has been plagued for more than a year by waning consumer confidence, declining home values, tightening credit and rising foreclosures. That perfect storm of housing gloom showed no signs of reprieve in October, as Shelby County’s home sales suffered another dropoff from the same month a year ago.
Just 1,336 homes sold in October, down 22.7 percent from the 1,729 that sold in October 2007, according to the latest data from real estate information company Chandler Reports, www.chandlerreports.com. The sales figure includes non-bank and bank sales.
When broken out, non-bank sales totaled 787 in October, a 35.1 percent decrease from 1,213 in October 2007; bank sales (i.e., foreclosures) totaled 549 in October, a 6.4 percent increase from 516 in October 2007.
Bill Maury, vice president at Prudential Collins-Maury Inc. and the 2009 vice president of the Memphis Area Association of Realtors (MAAR), said that although a handful of companies and agents are doing well, there hasn’t been any consistency in the market, not even in the first week following the presidential campaign.
“My buyers are all shutting their doors right now,” Maury said. “They don’t want to get off the fence. After the election, I thought everyone would hop off that fence and go buy a house and move on. Everybody’s saying, ‘No, Bill, let’s wait until the first of the year.’”
By the numbers
The number of sales isn’t the only statistic dropping. The average home sales price in October was $123,869, down 9.7 percent from $137,150 in October 2007. And the total sales volume in terms of dollar amount was $165.5 million, a 30.2 percent dropoff from $237.1 million the same month a year ago.
Compared to the previous month, October’s numbers (bank and non-bank sales combined) fared a little better. October fell 4.2 percent from September’s total of 1,395 homes sold, while October’s average sales price dipped just 1.5 percent from September’s $125,739 and the months’ total sales volume dipped just 5.6 percent from September’s $175.4 million.
Year to date, Shelby County has notched 14,338 home sales, down 21.8 percent from 18,331 in the same period of 2007. The average sales price of $134,735 is off 12.6 percent from $154,197 in 2007, and the total dollar amount of $1.93 billion is off 31.7 percent from $2.83 billion in 2007.
Eight ZIP codes saw sales increases in October from the same month a year ago – a rarity in this slumping market – and certain areas such as Downtown’s 38103 and Bartlett’s 38134 enjoyed solid months. Downtown’s sales increased 26.3 percent and Bartlett’s increased 5.8 percent.
The top ZIP code for Shelby County in October in terms of total number of sales was Raleigh’s 38128, which notched 37 non-bank sales and 41 bank sales for a combined 78. And the top ZIP in terms of average sales price was Germantown’s 38139 at $499,451.
Despite the overall dropoff, a few numbers represent positive signs for Scott Sherrin, marketing and communications director for the Memphis Area Association of Realtors (MAAR).
“Obviously, the sales decline has continued, but from our perspective and from our numbers, that number has somewhat moderated in the last couple of months when you’re looking at year-over-year numbers,” Sherrin said. “While it’s still a decline, it’s not as significant a decline, which I think is pointing to things hitting that plateau at the bottom.”
Sherrin also noted that inventory of new and existing homes is diminishing, moving the market toward a healthier balance – a key factor for market recovery.
“As inventory starts to decrease, it’s going to catch up with the demand,” he said. “At least we hope it will.”
What’s harder to control is financing for homes, which has been tight since the credit crunch hit last year and took a chunk out of the home-buying population. Monica Mauricio, affiliate broker at Dan Stewart Realtors, said that factor has played a huge role in the industry, forcing the hand of potential homebuyers.
“For so long anybody could buy a home for no money down, go into that home for not one cent,” Mauricio said. “Now, if you don’t have 3 percent (down payment), unless you’re able to qualify for a THDA (Tennessee Housing Development Agency) or Memphis or Shelby County down-payment assistances, you’re not going to go into a house for zero down. You’re going to have to have money to invest in the house, which is a good thing.”
What goes down…
It’s a good thing, sure. But it has meant the market getting worse before it can get better, and whether it improves quickly remains to be seen. A plan announced this week to bring federal aid to at-risk homeowners might help, but the winter season also represents a natural slowdown in home sales.
Lorraine Williams, an affiliate broker for Crye-Leike Inc.’s Bartlett office, admits that business has been bad, but she also understands the cycle of real estate and she knows that what goes down usually comes back up.
“If I have a seller that calls me and asks, ‘Should I list it?’ I say, ‘Well, do you have to sell right now?’” Williams said. “To be honest, it’s not a good time. If you’re expecting to get the equity you thought you’d get three years ago, you’re not going to. But if everybody’s straightforward and positive, this is just one of many times we’ve gone through this economy, and we’ll do it again. We’ll readjust, and once the readjustment is over, we’ll be back to square one again.”
Chandler Reports is a division of The Daily News Publishing Co.