Shelby County’s homebuilding industry showed slight improvement in the third quarter, with builders filing 3.4 percent more permits in the quarter than in the same three-month period a year ago.

Shelby County’s homebuilding industry showed slight improvement in the third quarter, with builders filing 3.4 percent more permits in the quarter than in the same three-month period a year ago.

(Daily News File/Andrew J. Breig)

However, the number of permits was down from the second quarter, and new home permits and sales remains significantly behind last year’s pace.

Builders filed 212 permits in Shelby County in the third quarter, compared to 205 permits in the third quarter of 2013, according to real estate information company Chandler Reports, chandlerreports.com. The 212 permits filed in the third quarter was down 13.4 percent from the 245 permits filed in the second quarter.

The third-quarter permits averaged 3,261 square feet and $269,717, compared to 3,152 square feet and $234,534 in the same period last year.

Homebuilders said still-attractive financing and steadily rising home prices are helping keep people in the market, with consumers wanting to lock in home prices and relatively low interest rates.

“People are starting to realize these interest rates won’t be around for long and prices are going up, and I think the public is aware of that and acting on it,” said David Goodwin Jr., owner of the David Goodwin Jr. Cos. LLC.

The top homebuilder in the second quarter, as tracked by the number of permits, was Regency Homebuilders LLC (57 permits, averaging 2,943 square feet and $222,801). Karen Garner of Magnolia Homes tallied the second-highest number (16; 4,177 square feet; $422,182), and Grant Homes came in third (13; 3,087 square feet; $228,298).

The subdivisions notching the most permits in the second quarter were Fountain Brook in Cordova North’s 38016 ZIP code (14; 2,618 square feet; $188,346). The Enclave in the 38139 ZIP code recorded the second-highest number (13; 4,798 square feet; $474,500) and Windsor Park in the 38133 ZIP code was third (11; 3,045 square feet; $246,748).

Through the first nine months of the year, builders have pulled 665 permits, down 9.6 percent from 736 permits pulled over the same period last year.

A shortage of developed lots is helping to keep the lid on inventory, which is pushing prices north.

“If you look at the value, it’s significantly increased because of the lot shortage,” said Kim Grant Brown, president of the West Tennessee Home Builders Association. “We’ve been expecting that and now we’re seeing it.”

“There’s really no inventory right now,” said Grant Brown. “Everything we’re building, we’re selling it before we finish so there is demand, a need for housing out there.”

Builders sold 182 homes in the third quarter, down 17.2 percent from 220 homes sold in the third quarter of 2013 and down 6.1 percent from the 194 homes sold in the second quarter of 2014. The homes sold in the third quarter averaged 2,970 square feet and $271,879, compared to 3,236 square feet and $270,554 a year ago.

The top builder for sales in the third quarter was Regency Homebuilders LLC, with 46 averaging $241,369. Grant Homes sold 21 homes averaging $254,468, and Kevin Hyneman sold 17 homes averaging $150,556.

Through September builders sold 569 homes, down 13.9 percent from the 661 homes sold through the first nine months of 2013. Regency Homebuilders LLC led the way in sales with 141 averaging 2,792 square feet and $241,880. Grant Homes sold 49 homes averaging 2,880 square feet and $245,250. Kevin Hyneman recorded 47 sales averaging 2,051 square feet and $160,064.

Homebuilders entered 2014 with optimism after the industry showed signs in 2012 and 2013 that it had finally begun to recover from the housing bust and recession.

Homebuilders filed 870 permits in 2013, down 5.2 percent from 918 permits filed in 2012, but still far above the 698 permits filed in 2011.

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