A solid spring has sown the seeds for an even better summer as the red-hot Memphis area real estate market enters its busiest time of the year.

New homes in a Collierville neighborhood off South Shea Road are selling fast. May home sales increased 9 percent from a year ago ahead of the busy summer season. (Daily News/Alan Howell)

The average home sales price in May was $169,549, a 10 percent increase from $154,171 a year ago, according to real estate information company Chandler Reports, chandlerreports.com.

“It’s just really been a good run for the last 12 months,” said Lee McWaters, owner of McWaters & Associates Realtors and vice president with the Memphis Area Association of Realtors. “It’s a good time to be selling.”

McWaters is confident that now, after a decade, the Memphis housing market has completely recovered from the recession.

“The last few years we have been climbing out, but I believe that, pretty much across the market, we have finally come back to the prices that we were at in 2006,” McWaters said.

The market should continue this positive growth for the next few years, he added.

“The future looks bright as far as I can see,” he said. “Consumer confidence is great right now, unemployment rates are near 15-year lows – it’s a good time for us.”

It’s a good time to be a buyer as well, he said.

Contractor Melchor Pineda works to install siding on new homes at South Shea Road and Jennings Mill Lane. (Daily News/Alan Howell)

 

“I read a report from a local lender on interest rates and they quoted 4 percent for a 30-year conventional, and for a 15-year conventional it was 3.25 percent,” McWaters said. “When I bought my first house I had a 9.5 percent interest rate, which was pretty good at the time, so as you can see, it’s a good time to be a buyer – but I wouldn’t wait.”

The volume of home sales in May reached $300.3 million, up 20 percent from $250.5 million a year ago, according to Chandler Reports data.

Eads’ 38028 ZIP code recorded the highest average price at $368,688.

The number of units sold was up 9 percent in May, with 1,771 sales recorded for the month compared with 1,625 in May 2016.

Existing-home sales in May increased year over year, with 1,697 recorded last month compared to 1,555 in May 2016. The average price of existing homes, meanwhile, reached $162,611 in May, up 10 percent from $147,897 a year ago.

There were 74 new-home sales recorded for the month averaging $328,656 compared to 70 last May averaging $293,548.

Arlington/Lakeland’s 38002 ZIP code recorded the most new-home sales for May with 15 sales averaging $279,451.

Through the first five months of this year, home sales are up 8 percent, average home sales prices are 7 percent higher and total home-sales volume is up 15 percent from the same period in 2016.

In addition to high-performing ZIP codes like Arlington and Eads, Vinh Le with First National Reality said areas such as Cordova are also performing well.

“A lot of people are moving to Cordova,” Le said. “Three years ago people were moving out of Cordova, but now people are moving back in.”

One of the reasons behind this, Le said, was that the price range and access to amenities were an especially attractive combination to first-time home buyers.

“It’s close to pretty much everything you need,” Le said. “Shelby Farms, the mall, and access to (Interstate) 240. It’s a good value.”

Although, one suggestion Le said he would like to give to all first-home buyers would be to lead with your best and highest offer, because under the current market climate, multiple offers are becoming more and more common.

“If you really like a house, just make your highest offer – don’t try to test out the market, because you will end up losing that house,” he said.

Building permits

Developers pulled 93 new-home permits in April, more than double the 42 pulled in April 2016.

Grant Homes was the top builder in April, with 10 new-home sales recorded averaging $454,400 and 17 new-home permits filed.

Arlington/Lakeland’s 38002 ZIP code filed the most new-home permits in April with 23 averaging $383,139.

Foreclosure activity

Shelby County residential foreclosures continued to drop in May, according to Chandler Reports, with 186 recorded for the month, a 2 percent decrease from last May. Of those 186, the average foreclosure amount was $68,982 and the average tax appraisal value was $104,963.

Southeast Shelby County’s 38125 ZIP code had the highest foreclosure inventory value of $16 million across 95 properties, while Westwood’s 38109 ZIP code had the most homes in foreclosure inventory through May with 155 valued at $5.8 million.

Among lenders, Fannie Mae had the highest foreclosure inventory, with 153 homes valued at $16 million.

Bank sales – or foreclosure sales – accounted for 7 percent of all Shelby County homes sold in May. The 130 bank sales recorded last month marked a 17 percent decrease year over year. The volume of bank sales dropped 18 percent to $10 million.

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