VOL. 133 | NO. 141 | Tuesday, July 17, 2018
Shrinking Inventory Keeps Home Prices Climbing
By Patrick Lantrip
Limited lot space, lack of lumber and a labor shortage are just a few of the reasons behind increasing home sales prices in Shelby County.
Homes at South Shea Road and Jennings Mill in Collierville. (Daily News File/Alan Howell)
In June, the average home sales price was $192,514, an 8 percent increase from $178,655 a year ago, according to real estate information company Chandler Reports, chandlerreports.com.
The volume of home sales in June reached $363 million, up from last year’s $331 million mark last, according to the Chandler Reports data.
The number of units sold was up 2 percent in June, with 1,888 sales recorded for the month compared with 1,851 last year
“Until there starts to be a real supply of new inventory out there, it feels like it’s a definitely a sellers’ market for the time being,” homebuilder Griffin Elkington of Griffin Elkington Residential Construction and Development said. “Once the new construction comes online, I could see things shifting, but for the time being, I think it will be a similar situation for the rest of the year.”
Elkington said despite the lack of inventory, he thinks the overall market is strong.
“The biggest thing for us is the lumber prices – it’s just insane how high they are right now,” Elkington said. “Everybody is seeing all the statistics about prices going up, which is great, but it’s not like we’re making more money, it’s just getting passed on, because the cost of doing business is going up.”
Elkington also cited a shortage of skilled construction workers and the possibility of a looming trade war as other factors behind the rising construction prices.
“(The prices) are always really slow to go back down,” he said. “They take advantage of those shocks to the system, so takes a while to get back down.
“The market is strong and things are moving quickly,” Elkington said. “But there’s just still such a storage of inventory, especially when it comes to new housing.”
Meanwhile, Germantown East’s 38139 ZIP code recorded the highest average price, at $483,034.
Existing-home sales in May rose with 1,832 recorded last month compared with 1,789 in June 2017. The average price of existing homes, meanwhile, reached $186,898 in June, up 9 percent from $171,459 a year ago.
Sales of new homes dropped 10 percent for the month, with 56 sales recorded, compared with 62 in June 2017. The average price of a new home also declined 3 percent to $376,231 from $386,317 a year ago.
Collierville’s 38017 ZIP code recorded the most new-home sales for June, with 17 sales averaging 358,524.
Developers pulled 85 new-home permits averaging $300,322 in May – down 32 percent from May 2017’s 125 permits averaging $311,266.
Grant Homes was the top builder in May for new-home sales with eight home sales that averaged $377,590. Regency Homebuilders was the top builder for new-home starts with 26 permits recorded, averaging $219,099.
Collierville’s 38017 had the most new-home starts in May with 24 averaging $420,551.
Shelby County residential foreclosures continued to drop in June, according to Chandler Reports, with 112 recorded for the month – a 35 percent decrease year over year.
Of those 112, the average foreclosure amount was $62,414 and the average tax appraisal value was $99,205.
Southeast Shelby County’s 38125 ZIP code had the highest foreclosure inventory value of $14 million across 80 properties, while Westwood’s 38109 ZIP code had the most homes in foreclosure inventory through June with 160 properties valued at $6.4 million. Among lenders, Fannie Mae had the highest foreclosure inventory, with 129 homes valued at $13 million.
Bank sales – or foreclosure sales – represented 5 percent of all Shelby County homes sold in June. The 86 bank sales recorded last month marked a 21 percent decrease year over year. The volume of bank sales dropped 6 percent to $9 million.
Meanwhile, non-bank sales increased 3 percent to 1,802 last month, with the volume of non-bank sales also increasing 10 percent to $354 million.
Residential mortgages filed at the time of sale were up one percent in June with 1,215 loans recorded for the month compared to 1,204 recorded in June 2017.
The average mortgage amount was $199,789, with an average sales price of $234,085, making the average loan-to-value ratio 85 percent.
Collierville’s 38017 had the most residential loans recorded at the time of sale with 93 mortgages averaging $324,000.
The top lenders in June, based on the total number of residential mortgages filed at the time of sale, were Community Mortgage Corp. with 80 loans, Pinnacle Bank with 70 loans and IberiaBank with 61 loans.
Loans from private lenders were down 46 percent from last year with 46 recorded for the month averaging $91,576.
Chandler Reports is a division of The Daily News Publishing Co.