VOL. 127 | NO. 30 | Tuesday, February 14, 2012
New Home Permits Climb 29 Pct.
By Sarah Baker
New home construction was up 28.9 percent last month, and local industry professionals hope the trend continues into spring.
Shelby County homebuilders filed 49 permits in January compared to 38 the same month a year ago, according to real estate information company Chandler Reports, www.chandlerreports.com.
The average January permit was 2,924 square feet and $200,920, as compared to 3,134 square feet and $224,645 in January 2011.
Sean Carlson, principal with Regency Homebuilders, is bullish that 2012 will outpace 2011’s homebuilding activity.
“Our outlooks for 2012 look good,” Carlson said. “I think we’ll be up from 2011, I don’t think it’s going to be a huge jump by any stretch of the imagination, but I think all our signs are pushing upwards right now. Our traffic in our models are great, we’re getting contracts in almost virtually everyday, so we’re very, very optimistic about this year.”
Regency Homebuilders filed the most permits for the month, with 15 averaging 2,619 square feet and $198,913. Next was Grant Homes, with 10 permits averaging 2,851 square feet and $187,759.
Keith Grant of Grant Homes said his company has been stable for two years now, and that’s an indication that builders are gaining more confidence in the market.
“We’ve had consistent sales in all of our neighborhoods for the last 24 months and with the overall economy improving and traffic improving in models, we’re feeling more confident in the new home market over the next 12 months,” Grant said.
January’s most active subdivision was Maple Grove PD in Arlington’s 38002 ZIP code, with 6 permits averaging 3,148 square feet and $207,479. Other subdivisions with movement last month included Olive Grove in Arlington, the Gardens of Grays Creek in Cordova North’s 38106 ZIP code and Bartlett Pointe in Bartlett/Brunswick’s 38133.
Arlington was the highest performing ZIP by a landslide, with 18 new home permits averaging 2,892 square feet and $191,536.
Carlson said Arlington appeals for new homebuyers for several reasons but advises those looking to make the leap to act fast.
“You’ve got some newer schools in Arlington, which is very appealing obviously to people with children, and the prices have come down to a good price point, it’s more affordable than it was a couple of years ago,” Carlson said. “It’s a wonderful place, and I think it’s mainly driven by the schools and small-town atmosphere that Arlington provides. But, I will also say, if people want to buy a house in Arlington, they probably need to hurry, just because the lot supply is definitely dwindling in Arlington and there’s not too many lots left.”
Builders sold 32 new homes in January averaging $231,091 and totaling $7.4 million. That’s a 35 percent drop-off from the 49 that were sold in January 2011, averaging $240,770 and $11.8 million.
It’s also a 42 percent decrease from January 2010, when 55 new homes were sold, averaging $226,997 and totaling $12.5 million.
But there are two important factors in January’s lower home sales totals than 2011 and 2010, Grant said. First, January 2010 was artificially inflated with the tax incentive that ended in April of 2010. And second, it’s still challenging for builders to obtain financing.
“It’s difficult in this market for builders that are not actively building quite a few homes to get speculative construction loans anymore, so I think at the end of the day, there’s a shortage of new homes in the market,” Grant said. “Though there’s less sales in January of 2012 compared to January of 2011, the inventories are much lower, and so there’s less out there for buyers to pick from.”
Chandler Reports is a division of The Daily News Publishing Co. Inc.