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VOL. 127 | NO. 203 | Wednesday, October 17, 2012

Building Permits Show Little Change

By Andy Meek

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Local homebuilders didn’t change much the amount of new home permits they filed during the third quarter compared with the same period last year.

Shelby County homebuilders filed 218 permits during the quarter (July to September), compared with 216 filed during the same period in 2011, according to real estate information company Chandler Reports, www.chandlerreports.com. Third-quarter permits marked a 12 percent drop from the 249 permits filed during the second quarter of this year.

Don Glays, executive director of the Memphis Area Home Builders Association, said permit filing typically slows down during the winter months. So, in that sense, the drop-off from the second quarter – and the near parity with the third quarter last year – is not surprising.

“Reports I’m getting back from builders (and about) the number of closings that are happening – we’re seeing a pretty good increase in a couple of areas,” Glays said. “The third quarter numbers are not truly reflective of year to date, because most houses are built March through July. That’s when permits are pulled.

“As we go into the winter months, we don’t pull that many permits.”

Third quarter permits averaged 3,250 square feet and $243,515. That compares to third quarter 2011 averages of 3,044 and $231,196, respectively.

Regency Homebuilders LLC filed the most permits last quarter, with 51 averaging 2,876 square feet and $209,711. Other busy homebuilders were Grant Homes (22, 2,870 and $181,924), and Charles Morgan of Vintage Homes LLC (18, 2,619 and $181,504). A recent survey by the National Association of Home Builders showed the confidence among builders stands at a level that’s as high as it’s been in years. Glays said that sentiment rings true in Memphis as well.

There’s a sense that the worst of the recession may have run its course, he said. Glays pointed to The Vesta Home Show, which kicked off Oct. 6 and continues through Oct. 28 at St. James Place, a gated subdivision in Germantown. The houses there, starting at 4,500 square feet, are on one-acre lots and range between $675,000 and $750,000.

Glays said four of the five houses already have sold.

“Traffic through the summer in show homes was way up,” he said. “People are making offers. I think what I’m hearing is if anybody was expecting to lose a job in the recession, they’ve already lost it. People who still have a job are regaining some confidence.”

The local subdivisions with the most activity during the third quarter were Bartlett Pointe in Bartlett’s 38133 ZIP code (15, 2,941 square feet and $182,193) and Rolling Meadow in Collierville’s 38017 (14, 2,885 and $265,000). The highest performing ZIP code was 38017, with 52 permits averaging 3,430 square feet and $320,592.

Builders sold 195 homes last quarter, averaging $256,412 and totaling $50 million in sales volume. That’s a drop from the third quarter of 2011, when they sold 227 homes averaging $225,471 and totaling nearly $52 million.

Still, the Federal Reserve, in its monthly economic roundup called the “Beige Book” for October, cited broad improvement in real estate market conditions in the regional Fed district that includes Memphis.

“Home sales increased throughout most of the Eighth District on a year-over-year basis,” the report states. “Compared with the same period in 2011, August 2012 year-to-date home sales were up 15 percent in Louisville, 6 percent in Little Rock, 11 percent in Memphis, and 17 percent in St. Louis. … August 2012 year-to-date single-family housing permits increased in the majority of the District metro areas compared with the same period in 2011.”

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

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PROPERTY SALES 119 482 10,051
MORTGAGES 119 497 11,811
BUILDING PERMITS 268 1,056 21,366
BANKRUPTCIES 50 263 6,700

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