VOL. 131 | NO. 115 | Thursday, June 9, 2016
May Home Sales Rise, Low Inventory Hiking Prices
By Madeline Faber
After a strong April, home sales in Shelby County continued to perform well in May.
Home sales in May were up 29 percent from a year ago, with total sales volume rising 27 percent compared to last May.
(Daily News File/Andrew J. Breig)
Total home sales increased 29 percent, from 1,266 recorded in May 2015 to 1,630 sales in May this year. Total home sales volume soared to $251 million, which is up 27 percent from last year, according to data from real estate information company Chandler Reports, chandlerreports.com.
“Stunning reversal of fortune is what it is, relative to a few years ago,” said Kent Anderson, who sits on the Memphis Area Association of Realtors board of directors and works for Crye-Leike Realtors Inc.
Year-to-date home sales and volume are both up 13 percent from the same period last year.
And a healthy decrease in bank sales is a healthy sign for the Shelby County housing market.
“Nothing really stands out, I would say, other than bank sales continue to decline as a percentage of the overall market, so that has to be a good thing,” said Felix Bishop, a board member with MAAR and Realtor with Crye-Leike.
Foreclosure activity was down 19 percent, with 189 recorded compared to 234 last May. Of the properties that were foreclosed on, 7 percent have been resold by the bank. These properties were owned an average of 13 years prior to foreclosure.
The Cordova North ZIP code of 38016 had the highest foreclosure inventory value of $15 million across 104 properties.
“There’s not as much (foreclosure activity) coming down the pipe as we’ve seen in the past,” Anderson said. “In looking at the numbers, individual areas are bouncing back a little bit.”
The average price of a home, coming in at $154,210, marked a 2 percent decrease from last year. The median sales price for a home was $120,000, down 6 percent from last May.
Out of Shelby County’s 33 ZIP codes, 22 saw an increase in overall sales activity and 20 saw an increase in average sales prices.
Forty-one percent of home sales in the county were valued under $100,000. There were 44 homes that sold for $500,000, which is up 42 percent from May of last year. Year-to-date home sales of over $1 million are up 58 percent from the same period last year.
Still, a low inventory impacts Shelby County home sales.
“Inventory is way down. In fact, it’s at winter levels,” Bishop said. “We’re 800 units fewer on the market mix in May than we were of May of last year. The scuttlebutt is that things are selling quicker and there are more multiple offers on properties.”
April new home permits were down 59 percent, with 37 recorded for the month, down from 90 permits filed in April 2015.
New home sales, however, were up 53 percent in May, according to Chandler Reports data. There were 69 sales of new homes for the month compared to 45 in May 2015.
“The new construction sector is performing better than last year to meet the thirsty demand,” said Albert Lee, a board member at MAAR and a Realtor with Century 21 Maselle & Associates.
The average price-per-square foot increased 34 percent to $127.45, compared with $100.18 last year.
“If we don’t have any inventory, Economics 101 say that prices have got to move,” Anderson said.
Anderson said that Collierville, which has traditionally been among the strongest areas for home sales, illustrates how slow-to-grow inventory bears down on the market. Sales decreased 7 percent in Collierville while prices increased 8 percent.
“To me, that’s just because there’s no inventory in Collierville,” Anderson said. “That’s an area where we constantly have turnover, and also, what little bit of new construction out there has been absorbed.”
The Arlington/Lakeland and Collierville areas recorded the most new home sales for the month, each recording 15.
“There’s not a lot of new development going on, and there’s no indication of interest rate hikes in the near term,” Bishop said. “So if we’re continuing with low interest rates and if inventory remains low, then these trends should continue for at least remainder of the summer.”
Chandler Reports is a division of The Daily News Publishing Co.