Shelby County Building Permits ‘Stable’ in August

By Amos Maki

Shelby County home building activity was relatively flat in August, with builders pulling slightly more permits while selling fewer new homes compared to August 2012.

A crew works on cornices and windows on a home at Woodlands of Cordova by Regency Homebuilders. Permits were up slightly in August. 

(Daily News File/Lance Murphey)

Homebuilders pulled 72 permits in August, up 9 percent from 66 permits filed in August 2012, according to real estate information company Chandler Reports,

The average permit in August measured 3,090 square feet and $217,548, compared to 3,255 square feet and $251,064 in August 2012.

The 72 permits pulled in August was down 6.5 percent from 77 permits in July. The average permit in July measured 2,958 square feet and $225,199.

The home building market has vastly improved since the dark days of 2009 and is now more organic and sustainable when compared to the inflated numbers of 2004 to 2006, said Don Glays, executive director of the West Tennessee Home Builders Association.

“We’re climbing out of the doldrums,” said Glays. “Nobody is jumping up and down saying we’re back, and we never want to get back to where we were in 2005 and 2006 with the predatory lending and subprime loans.”

Glays is predicting that Shelby County could see 1,000 permits pulled this year, the first time the county has reached that mark since 2007.

Year to date, builders have filed 629 permits, a slight increase from 618 for the same eight-month period in 2012.

Homebuilders didn’t sell as many homes in August as they did the same month a year ago. Builders sold 59 new homes in August, down 23.4 percent from 77 new homes sold in August 2012. The average sales price of a new house in July was $262,778, down 0.7 percent from $264,593 in August 2012.

The 59 new homes sold by builders in August was down 8 percent from 67 sold in July.

“It’s pretty flat, and flat is good at this point,” said Keith Grant of Grant Homes. “We’re not going down anymore. It’s stable.”

Rising interest rates have had an impact on the market, but limited supply and demand are keeping pricing healthy, said Grant.

“You have a limited supply for a limited demand, which is good as far as pricing is concerned,” said Grant. “The rates have impacted it some, but not enough to where it brought our market down in any significant way.”

Regency Homebuilders LLC was the top builder as tracked by permits in August, with 20 averaging 2,767 square feet and $197,474. Regency was followed by Grant Homes (six; 2,823; $120,000) and Charles Morgan of Vintage Homes (five; 2,833; $196,733).

Regency Homebuilders led the way in sales, with 15 averaging $264,810. Charles Morgan of Vintage Homes sold seven homes averaging $148,189, Grant Homes sold four homes averaging $204,216 and Karen Garner of Magnolia Homes sold four homes averaging $419,515.

The Gerland Creek subdivision in Southeast Shelby County saw the most activity in August, with five permits averaging 2,833 square feet and $196,733. The Uptown development Downtown was second, with four permits averaging 1,590 square feet and $110,561. The Wolf River Ranch subdivision in Collierville also saw four permits; those averaged 3,966 square feet and $398,750.

Three ZIP codes led the way in permits with 11 each. The 38002 ZIP code (Arlington/Lakeland) had 11 permits averaging 2,594 square feet and $169,933. The 38016 ZIP code (Cordova North) had 11 permits averaging 2,539 square feet and $183,160. And the 38125 ZIP code (Southeast Shelby County) had 11 permits averaging 2,841 square feet and $197,009. They were followed by the 38017 ZIP code (Collierville), which had nine permits averaging 4,059 square feet and $370,125.

The Memphis market remains on the National Association of Home Builders/First American Improving Markets Index. The index measures three sets of independent monthly data – employment growth, house price growth and single-family housing growth – to identify improving markets.

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