Shelby County’s homebuilding industry showed signs of cooling in the third quarter, with builders pulling 14 percent fewer permits than in the same period a year ago.
(Daily News File/Lance Murphey)
Builders filed 197 permits in Shelby County in the third quarter, compared with 229 permits in third quarter 2012, according to real estate information company Chandler Reports, www.chandlerreports.com.
The average size of those permits decreased 1.5 percent to 3,160 square feet, compared with 3,210 in 2012. The average price dropped 4.8 percent to $236,306, compared with $248,148 in the year-ago period.
Don Caylor, owner of Summerset Homes Inc. and president of the West Tennessee Home Builders Association, said several reasons were to blame for the slowdown. For one, developed lots are scarce, which could lead the builders who own those lots to sit on them for a little longer.
“They’re having to plan for the next two or thee years based on the inventory they’ve got,” Caylor said. “Builders are cautious.”
In addition, Caylor said worries over the economy, including the government shutdown, congressional budget battles and the implementation of the Affordable Care Act, are prompting some builders to take a wait-and-see approach.
The top homebuilder in the third quarter, as tracked by number of permits, was Regency Homebuilders LLC (50 permits, averaging 2,875 square feet and $213,362). Grant Homes tallied the second-highest number (18 permits, averaging 3,012 square feet and $210,619). The third-highest ranking was a tie, with 12 permits each for Charles Morgan of Vintage Homes (averaging 2,841 square feet and $196,977) and Karen Garner (averaging 3,889 square feet and $365,250).
Two ZIP codes, 38002 in Arlington/Lakeland and 38017 in Collierville, tied for the most activity in the third quarter, with 38 permits each. In 38002, permits averaged 3,127 square feet and $217,695; in 38017, they averaged 3,574 square feet and $321,856.
September Permits Drop 37 Percent
Homebuilding began to show signs of cooling off in September, with builders pulling fewer permits than last year.
Builders pulled 51 permits in September, down 37 percent from 81 permits in September 2012. The 51 permits filed by builders in September was down 29 percent from 72 permits in August.
The September permits averaged 3,465 square feet and $270,425, compared to 3,311 square feet and $264,720 in September 2012.
Regency Homes was the most active builder as tracked by permits, with 15 permits averaging 3,073 square feet and $251,061. Karen Garner of Magnolia Homes pulled the second-highest number, with four permits averaging 4,082 square feet and $342,500.
Builders sold 41 new homes in September, down 26 percent from 67 new homes sold last September. The average sales price for a new home was $247,226, up 5.1 percent from $235,324 a year ago.
Regency Homebuilders led the way in sales, with 11 averaging $223,388. Grant Homes sold five homes averaging $207,384, and Charles Morgan of Vintage Homes sold five homes averaging $164,780. The Woodgrove subdivision in Collierville saw the most activity.
– Amos Maki
Two subdivisions had at least 10 permits in the quarter: Wolf River Ranch in Collierville (12 permits, averaging 3,923 square feet and $381,583) and Gerland Creek in Southeast Shelby County (10 permits, averaging 2,825 square feet and $196,004).
Builders sold 178 new homes during the quarter, averaging $266,152 and totaling $47.3 million.
Year to date, homebuilders have pulled 681 permits, down 2.6 percent from the 699 permits pulled in the first nine months of 2012, according to Chandler Reports.
While the number of permits decreased, the average square footage increased 1.2 percent to 3,243 square feet, compared with 3,204 square feet year in the same period of 2012. The average price rose 2.2 percent to $251,099, compared with $245,671 in 2012.
The homebuilders pulling the most permits year to date are Regency Homes (173 permits, averaging 2,971 square feet and $220,721), Grant Homes (53 permits, averaging 3,004 square feet and $206,337) and Charles Morgan (52 permits, averaging 2,607 square feet and $$175,224).
The ZIP codes notching the most permits year to date are Arlington/Lakeland’s 38002 (144, averaging 3,506 square feet and $238,386), Collierville’s 38017 (139, averaging 3,555 square feet and $306,060) and Southeast Shelby County’s 38125 (67, averaging 2,872 square feet and $195,040).
Active subdivisions year to date are Wolf River Ranch in Collierville (43, averaging 3,978 square feet and $371,244), Kensington Subdivision in Arlington (30, averaging 3,021 square feet and $199,736) and Woodgrove, also in Collierville (23, averaging 2,973 square feet and $252,939).
Year to date, builders have sold 604 homes, up 5 percent from 574 over the same period in 2012.
Chandler Reports is a division of The Daily News Publishing Co. Inc.