VOL. 127 | NO. 139 | Wednesday, July 18, 2012
By Sarah Baker
Local homebuilders filed 54 percent more new home permits during the second quarter compared with the same period last year.
Regency Homebuilders LLC led all builders in the number of permits filed in the second quarter. Recent activity has included Cordova’s Windsor Park, shown here.
(Photo: Lance Murphey)
Shelby County homebuilders filed 247 permits during the quarter (April to June), compared with 160 filed during Q2 2011, according to real estate information company Chandler Reports, www.chandlerreports.com.
Second-quarter permits also posted a 27 percent increase from 195 permits filed during the first quarter of this year.
Don Glays, executive director of the Memphis Area Home Builders Association, said permits are up because sales are up and builders are having to build to meet demand. That demand is thanks to historically low interest rates and increasing consumer confidence, both huge factors in the purchasing decisions.
“Home ownership is still very much alive and well, it’s very much a part of the American dream,” Glays said. “People are coming to realize, ‘Hey, you know what, if I haven’t lost my job already, the chances are, I’m not going to, so now is a good time to make a move.’”
Glays also pointed out that he’s hearing “a dramatic increase” in inquiries and activity from mortgage writers, architects and engineers.
Q2 permits averaged 3,222 square feet and $230,437. That compares to Q2 2011 averages of 2,987 and $228,819, respectively.
Regency Homebuilders LLC filed the most permits last quarter by a landslide, with 48 averaging 3,016 square feet and $214,078. Other busy builders were Grant Homes (28, 2,743 and $173,431), Charles Morgan of Vintage Homes LLC (20, 2,441 and $166,668), Hallmark Builders Inc. (16, 4,666 and $257,800) and Karen Garner of Magnolia Homes (12, 4,157 and $345,833).
A recent survey by the National Association of Home Builders showed the confidence among builders stands at its highest level since 2007. Glays said that sentiment rings true in Memphis as well.
“Our president, Jimmy Moore, has got a contract to build a house; hasn’t had a contract in three years,” Glays said. “And we’re hearing that from others. My vice president, Don Caylor, has had no less than six families looking at some new homes he has for sale in DeSoto County. There’s a lot of activity going on out there, and it’s just starting to pick up.”
The subdivisions with the most activity during Q2 were Kensington in Arlington’s 38002 ZIP code (14, 2,967 square feet and $179,469) and Gerland Creek in Southeast Shelby County’s 38125 (14, 2,554 and $173,426).
The highest performing ZIP code was 38002, with 71 permits averaging 3,553 square feet and $223,757.
Builders sold 176 homes last quarter, averaging $248,986 and totaling $44 million in sales volume. That’s a 25 percent drop from the second quarter of 2011, when they sold 201 homes averaging $223,028 and totaling $45 million.
And it’s a 171 percent drop off from the second quarter of 2010, when 347 sales averaged $217,610 and totaled $75.5 million.
Glays said the fact that sales and permits in this market are tracking each other is a positive sign.
“We had 5,000 homes in inventory in 2008,” he said. “That has pretty much been eaten up, or builders are not building (speculative) houses, which is a positive thing. Builders are building to a demand for sales. At the end of the day, it’s a much more economically viable way of doing business.”
Chandler Reports is a division of The Daily News Publishing Co. Inc.