Housing Market Stumbles in First Quarter

Monday, April 14, 2014, Vol. 129, No. 72

Shelby County home sales slowed in the first quarter when compared to the same three-month period in 2013.

Shelby County recorded 3,270 home sales in the quarter that ended March 31, down 3 percent from the 3,383 homes sold in the first quarter of 2013, according to real estate information company Chandler Reports, www.chandlerreports.com.

Real estate agents said an unusually cold winter – temperatures in January and February were well below normal – helped keep a lid on the housing market during the first quarter. The overall sales numbers weren’t able to recover from an especially slow January, when 1,101 homes were sold, an 18 percent drop from 1,338 homes sold in January 2013.

“Based on conversations I’ve had and based on my own personal experience my opinion is that it was the weather,” said Tommie Criswell of Crye-Leike Realtors Inc. “The weather was just so bad that buyers and agents just hunkered down.”

While the number of sales in the first quarter was down compared to last year, pricing showed strong improvements. The average sales price of a home in the first quarter was $133,822, up 11 percent from $120,730 over the same period a year ago. Total sales volume in the first quarter was $437.59 million, up 7 percent from $408.43 million in the first quarter of 2013.

Greg Glosson, president of the Memphis Area Association of Realtors, said the steep increase in pricing was a result of declining inventory, which can also impact overall sales numbers when potential buyers are unable to find an appropriate property.

“I believe that is a function of the inventory right now,” he said. “We all have qualified buyers who are ready to purchase something but because of the lack of inventory they’re not able to buy something that fits their needs.”

Glosson said the shrinking inventory and continued price appreciation should make the market attractive to potential sellers.

“That is why I think right now is such a good time for sellers in the market,” said Glosson. “They can probably get much more money today than they could have over the last several years.”

The Cordova North 38016 and Cordova South 38018 ZIP codes each recorded 224 sales to lead the county. Collierville’s 38017 ZIP code recorded 204 sales while Raleigh’s 38128 ZIP recorded 182 sales. Collierville led the way in sales volume, recording $61.9 million in sales in the first quarter.

After seeing a significant decrease in bank, or foreclosure, sales in 2013, the number of bank sales continues to plummet in 2014.

There were 628 bank sales in Shelby County in the first quarter, down 22 percent from 808 bank sales over the same period last year. The average price for a bank sale was $71,676, down slightly from $71,792 last year.

Glosson said the market has nearly worked its way through the massive glut of foreclosed homes that swelled to historic highs following the housing bust and recession.

“Most of those have made it through the process now and that number will go to a more reasonable level now where it won’t be such a large part of our inventory,” Glosson said. “We knew it would take time and ultimately we’ve just worked our way through it.”

There were 2,642 non-bank sales in the first quarter, up 3 percent from 2,575 non-bank sales over the same period in 2013. The average price for a non-bank sale in the first quarter was $148,594, up 9 percent from $136,087 in the first quarter of 2013.

Real estate agents sold 3,100 existing homes in the first quarter, down 3 percent from the 3,192 existing homes that were sold over the same period last year. The average sales price for an existing home in the first quarter was $126,258, up 12 percent from $112,652 over the same period last year.

And 170 new homes were sold in the first quarter, down 11 percent from 191 new home sales for the same period of 2013. The average sales price for a new home in the quarter was $271,757, up 6 percent from $255,734 over the first three months of 2013.

Real estate agents came into 2014 with high hopes after 2013 produced the strongest year for sales since the onset of the recession. The county netted 15,892 home sales in 2013, up 6 percent from 14,936 homes sold in 2012.

Glosson said that market fundamentals, such as historically low interest rates attractive to buyers and price increases enticing to sellers, have agents hopeful as they head into the traditionally strong spring and summer home selling seasons.

“I think Realtors right now are more optimistic than they have been in the last several years,” Glosson said. “I think we have the right ingredients for a very successful spring and summer season.”

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