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VOL. 131 | NO. 50 | Thursday, March 10, 2016

New-Home Sales Lag in February, Inventory Remains Low

By Madeline Faber

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February home sales in Shelby County rose 18 percent over February 2015 while the average sales price fell 6 percent to $135,216.

Area Realtors say low inventory is one of the most pressing market issues in Shelby County.

(Daily News File/Andrew J. Breig)

With 1,111 total sales for the month, home sales revenue increased 10 percent year-over-year, according to data from real estate company Chandler Reports, chandlerreports.com.

The median sales price for the month was $97,850, down 11 percent from February 2015.

“Depressed numbers on sales in some of the areas are a result of low inventory – either lack of new construction that’s available for market or existing homes,” said Tommie Criswell, incoming president of the Memphis Area Association of Realtors and a Realtor with Crye-Leike Realtors.

Low inventory continued to be a problem in February. New home sales were down 24 percent with 60 sales recorded for the month compared with 79 last year.

“The biggest thing I’m seeing is there’s this huge drop in new construction sales, so that’s going to skew those numbers,” said Kent Anderson, MAAR board member and a Realtor with Crye-Leike, of the month’s 6 percent drop in average prices. “If you assume new construction is going to be fairly high-end, that’s going to skew those numbers down. I don’t think it’s necessarily a trend. I think it’s a function of a mix.”

The average sales price of a new home increased 21 percent to $281,927.

Anderson added that the market peaked at about 12,500 available properties during the Great Recession while January and February saw an inventory of 5,400 houses.

“So there’s going to be some moving around and some oddball spikes in various areas,” he said.

Builders pulled 44 new home permits in January, down 14 percent from January 2015.

“The fact that the high demand is there and inventory levels are low bodes well for sellers,” said Criswell. Personally, her team has a surplus of buyers looking to purchase in the market.

“When something new hits the market, it’s not uncommon to get multiple offers,” she added.

In February, foreclosures increased 7 percent with 184 recorded, compared to 172 last year. The average amount of a foreclosed property was $80,278 with an average tax appraisal value of $113,413.

The increase in foreclosures dragged down overall home sales prices, with 51 percent of Shelby County home sales valued under $100,000.

“The foreclosure numbers may have bumped up, but I don’t believe it’s a trend. I think it’s a timing issue in getting out from under what was done during the recession,” Anderson said. “I don’t see that as being something that is alarming.”

The Cordova ZIP code of 38109 had the most home foreclosure inventory value at the end of the month at $17 million across 111 properties. The Westwood ZIP code had the most home foreclosure inventory – 188 properties valued at $8 million.

Most of the homes in foreclosure inventory belonged to Fannie Mae, with 233 homes valued at $24 million.

“In looking at that overall chart for that month of February, it’s not that much compared to what we’ve been through the past year,” said Sally Summerlin, MAAR board member and principal with Summerlin and Associates LLC.

“I think our numbers are trending normal, as they should,” Summerlin added. “This time of the year is usually a slight bit slower, however with the weather we had in December and January, I think that definitely has helped us, and I think this year will continue to be a positive year both for buyers and sellers.”

PROPERTY SALES 85 205 21,165
MORTGAGES 76 206 24,338
BUILDING PERMITS 183 321 43,755
BANKRUPTCIES 48 92 13,560