VOL. 129 | NO. 155 | Monday, August 11, 2014
Shelby County Home Sales, Prices Dip in July
By Amos Maki
From 2008 to 2012, bank sales – or foreclosure sales – propped up what was an otherwise crumbling real estate market.
Shelby County home sales dipped in July. Realtors say the declining amount of bank sales is impacting overall sales figures.
(Daily News File/Lance Murphey)
After several years of historically high bank sales, that inventory has finally thinned out and their months-long decline is impacting overall sales figures, according to several Memphis-area Realtors.
That steady decline continued in July, with 162 bank sales in Shelby County, down 39 percent from the 264 bank sales in July 2013, according to real estate information company Chandler Reports, www.chandlerreports.com.
The average price for a bank sale in July was $79,416, up 3 percent from $77,357 a year earlier. Raleigh’s 38128 ZIP code recorded 16 bank sales, followed by Westwood’s 38109 with 15 and Hickory Hill South’s 38141 with 13.
Through July, Shelby County recorded 1,373 bank sales, down 28 percent from 1,896 over the same period last year.
The decline in bank sales is reflected in overall sales figures for Shelby County.
Despite excellent weather conditions, the county experienced a drop in home sales and prices in July when compared to last year.
Shelby County recorded 1,535 home sales in July, down 9 percent from 1,693 sales recorded in July 2013 and down 3 percent from the 1,586 sales recorded in June.
“We were just down,” said Greg Glosson, president of the Memphis Area Association of Realtors. “I don’t know that there’s an explanation for a single month like that. You have to go back and look at what’s changed in the market, and the decline in bank sales has had a significant impact.”
Steve Brown, Crye-Leike Realtors Inc. Memphis general manager, also pointed to the dip in bank sales resulting in lower overall sales numbers.
“We know that bank sales as a whole are decreasing, so units are decreasing and prices have been going up since 2012, and that’s a good thing,” said Brown. “I don’t have any other rational explanation. Rates have not gone up precipitously and we haven’t lost a major employer and we can’t say it was the weather, so we can’t explain it other than the fact that bank sales are a lesser percentage of the sales. That does help us on the flip-side with prices going up.”
The average sales price in Shelby County in July dipped just slightly to $155,499, compared with $156,474 in July 2013. Roughly 44 percent of all Shelby County home sales for the month were valued under $100,000. Total sales volume for July was $238.7 million, down 10 percent from $264.9 million in July 2013.
Steve Young of Keller Williams Realty Inc. pointed out that while July’s sales numbers were down from last year, they were still far above the levels experienced during and after the recession.
“I think it is important to note that July 2013 was, by far, the highest number of units sold in the last five years,” said Young. “July 2014 was the second best sales year behind 2013, since 2008. At the same time, average home price has continued to hold fairly steady.”
Collierville’s 38017 ZIP code lead the way in sales, with 125 averaging $306,277. That was followed by 38118 (Oakhaven/Parkway Village), with 94 sales averaging $49,064, and 38016 (Cordova North), with 91 sales averaging $140,768.
Out of the 33 Shelby County ZIP codes, 11 experienced an increase in overall sales activity for the month and 20 had an increase in average sale price.
Shelby County recorded 1,373 non-bank sales in July, down 4 percent from 1,429 in July 2013. The average price for a non-bank sale was $164,476, down 4 percent from $171,090 in July 2013. Through July, 7,611 non-bank sales have been recorded in Shelby County, up 3 percent from 7,405 over the same period last year.
Realtors sold 83 new homes in July, up 11 percent from 75 new homes sold in July 2013. The average sales price for a new home was $250,616, up 2 percent from $245,417 a year earlier.
Realtors sold 1,452 existing homes in July, down 10 percent from 1,618 existing homes sold in July 2013. The average sales price of an existing home was $150,062, down 2 percent from $152,351 in July 2013.
Through July, Shelby County has recorded 8,964 home sales, down 3 percent from 9,301 over the same seven-month period a year ago.
Young said sluggish job growth and the number of people ages 18 to 34 who were spooked by the housing crash and are choosing to rent instead of buy is impacting the market.
“Although the economy is growing, we are not back to a healthy economy and the jobs growth rate is not where we need to be to see sustainable growth in the real estate market,” said Young. “Combine that with the fact that millennials are not as active in the home market due to student loan debt and difficulty of finding jobs, and it is clear we still have some ground to cover in getting back to ‘the good old days.’”
While he is still bullish on the Memphis market, Young said the sluggish homebuilding industry remains a major challenge. Builders sold 367 homes in Shelby County during the first half of 2014, down 13 percent from 422 homes over the same period last year, and the number of building permits was down 17.6 percent.
“Our greatest challenge is still the lack of new home growth,” said Young. “We all know that new construction stimulates a lot of areas of the home market. That is one area we are just not getting back to where we need to be, and it is going to be a while.”