‘New Enthusiasm’ Yields Permit Rise

By Sarah Baker

While new-home sales remain low, average new-home sales prices are increasing, along with the number of permits and permit amounts.

Shelby County homebuilders filed 75 permits in April – up 36 percent from the 55 filed during April 2011 – according to real estate information company Chandler Reports, www.chandlerreports.com.

Permits averaged 3,355 square feet and $230,067 last month. Those averages compare to 2,882 square feet and $212,803 in April 2011.

Don Glays, executive director of the Memphis Area Home Builders Association, said there is an apparent “new enthusiasm” among builders and consumers alike.

“I’m hoping obviously that this trend continues, but we would like to see it accelerated,” Glays said. “We are expecting that this year we’ll finish significantly better than last year, but next year is when we see the breakout happening.”

Builders sold 51 homes last month, averaging $248,179 and totaling $12.7 million in sales volume. That falls short of 58 new homes sold in April 2011 (averaging $222,363 and totaling $12.9 million), and 88 new homes sold in April 2010 (averaging $234,058 and totaling $20.6 million).

Because homebuilding creates jobs, Glays said, MAHBA recently created a plan that would give a $6,000 grant for about 1,650 new homebuyers throughout the state. If Tennessee saw that many new buyers, it would create about 5,000 jobs.

“We’re working now with the legislature, but we’re looking for ways to make that happen without it affecting the taxpayers like a stimulus plan would,” Glays said. “For example, working through an agency like (Tennessee Housing Development Agency) would make those funds available on a bond issue basis, but it wouldn’t affect the taxpayers. Plus the payback to the state of Tennessee is incredible. For a $10 million investment, the payback in six or less months would be somewhere around $68 million – close to a 700 percent return on investment.”

Grant Homes filed the most permits in April, with 11 averaging 3,160 square feet and $193,720. Kim Grant also filed five permits averaging 2,766 square feet and $220,000, and R G Grant filed two permits averaging $202,500.

The next busiest builder was Regency Homebuilders LLC, with seven permits averaging 3,093 square feet and $211,620. Other active builders were Barry Duke of Creekside Homes LLC (four; 2,750; $149,900), Karen Garner of Magnolia Homes (four; 4,840; $357,500), Hallmark Builders Inc. (five; 4,348; $289,400) and Charles Morgan of Vintage Homes LLC (four; 2,508; $173,770).

The subdivision with the most activity during April was Wolf River Ranch in Collierville’s 38017 ZIP code, with six permits averaging $328,000. Other subdivisions with filed permits included Kensington in Arlington’s 38002 (five; 2,756; $173,761) and Estanaula Trails in 38017 (five; $242,200).

And the highest performing ZIP code in April for homebuilding was Arlington’s 38002, with 25 permits averaging 3,230 square feet and $195,827. It was followed by Collierville’s 38017, with 15 permits averaging $298,200.

Chandler Reports is a division of The Daily News Publishing Co. Inc.