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VOL. 8 | NO. 19 | Saturday, May 2, 2015

Quarterly Economic Data Shows Improvement

By Andy Meek

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Based on several metrics related to the local economy in the first quarter, there would appear to be plenty of data to back up the optimism real estate professionals like Tommie Criswell, broker-manager for Crye-Leike’s East Memphis office, say they feel at the moment.

“We’re very encouraged by the activity in the marketplace right now,” she said, coming off a quarter when mortgages were up, foreclosures were down and personal bankruptcies sunk, as well. “There are more buyers in the market. Sellers are slowly but surely beginning to realize that property values have begun to increase somewhat, so there are a few more properties that are coming on to the market, but we still have a situation where demand seems to be surpassing supply somewhat.”

That, of course, means she and her fellow Realtors are seeing multiple offers on properties in multiple markets, Criswell said, meaning that “good properties that are priced appropriately and in the right conditions” are welcoming plenty of activity.

To get a sense of what that looked like during the first three months of 2015, mortgages grew about 7 percent during the quarter, according to real estate information company Chandler Reports, www.chandlerreports.com. The top three lenders during the quarter by number of mortgages, for which a lender was listed, included Community Mortgage Corp., Magna Bank and Iberiabank.

To get a sense of the strength of the quarter from a mortgage lending perspective, Magna’s average mortgage amount during the quarter topped $200,000.

“I’m hearing that Realtors are extraordinarily busy and in just an upbeat mood about the market having improved,” Criswell said. “It’s a good time for sellers to come into the marketplace if they’re contemplating that, and it’s a good time for buyers. Interest rates are good, properties are selling, and there are homes out there for those who are looking.”

The ability for borrowers to move forward with home purchases in large numbers would naturally be blunted if their personal balance sheets weren’t particularly strong. But the first quarter also presented evidence that some of the most challenging forces working against borrowers in the Memphis area have been on the wane.

Bankruptcies, for example, were down in the quarter by about 12 percent. And bankruptcy cases involving some of the hardest-hit debtors – those who file for Chapter 7 bankruptcy, in which debts can be mostly liquidated or sold off as opposed to Chapter 13, which involves a court-ordered repayment plan – were down even more, by 18 percent.

That reflects an anecdotal observation local bankruptcy attorneys have shared for some time now. Namely, debtors and their creditors are more frequently working out their problems outside the courtroom and using bankruptcy proceedings as a kind of last resort.

Foreclosure activity, meanwhile, has continued its steady decrease for much of the recent past, something that didn’t change in the first quarter. A drop of about 8 percent in the first quarter was seen for foreclosure notices, which are the first step in the chain of foreclosure activity on the way to a sale.

The notices in Tennessee are required to be published in a newspaper of general circulation before a sale can occur. And the totals for notices don’t necessarily match up with total foreclosure activity for a quarter, because the notices are intended to give borrowers time to correct the default that’s led to a potential foreclosure action.

Looking at total foreclosures during the quarter, residential foreclosures were down about 10 percent. Though a few inner city neighborhoods tend to get hit hardest from one quarter to the next when it comes to foreclosures, some of the biggest percentage jumps in foreclosures during the first quarter were actually in the suburbs.

In Arlington, for example, foreclosures were up 17 percent. In Germantown, the increase was 40 percent, while Millington saw a 50 percent jump.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 57 280 1,209
MORTGAGES 55 244 916
FORECLOSURE NOTICES 8 52 151
BUILDING PERMITS 158 699 2,751
BANKRUPTCIES 37 157 618
BUSINESS LICENSES 12 77 276
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0