Condo Boom in Downtown Memphis

March 30, 2006, 12:26 PM

MEMPHIS - For just the second time in 22 years the Memphis Area Home Builders Association is holding the Vesta Home Show downtown. The reason? The sudden boom in the condo market in the south end. Development that shows no signs of slowing down.

The Memphis Area Home Builders Association says there are $250 million dollars worth of condo projects going up downtown and that is expected to double in the next couple of years. The units at the various developments are selling anywhere from $110,000 to a million. The Home Builder's Association says developers are just meeting the demand of baby boomers scaling back and young professionals who want to live downtown.

"I tell you a lot have sold out. A lot are still for sale. There are about 60-70,000 people who work in downtown," said Dalene Wilson, of the Memphis Area Home Builders Association.

"I've never seen anything like it. There are 80 million of us out there at the age where our kids have left the nest," said Gary Garland.

Gary Garland has already put a down payment on two condos in "The Horizon," a 16 story high rise that will soon be going up along Riverside Drive. As general manager of the project, he's also selling the units. A model inside the sales office is giving buyers a chance to see what the condos will look like once they are finished, but he says the view and location are selling the units.

"We are a little over 50 percent pre-sold in the first phase. We just started before the holidays. Around Thanksgiving," said Garland.

There is also lots of new development in the north end of town. If you would like to look inside some of the new condos you can attend the Vesta Home Show. It beings April 15th.

Tapping the Hispanic Market

Insurance agent tailors new businesses to growing population

Recent Lead Stories Recent Lead Stories
ANDY MEEK | The Daily News

Lauda Martin Davis has seen the puzzled looks before. When she sees them directed at Hispanics in Memphis who are struggling to accomplish mundane tasks, she thinks of her Hispanic father, a man who never quite overcame his own language barrier.

"He had the thickest Spanish accent you've ever heard in your life, and I saw how much trouble he had because of it," said Davis, vice president of Servicios Bilingual Services.

It's a memory that puts her current job in perspective.

From behind the counter in a small Hickory Hill office, Davis and a handful of other Spanish-speaking employees do what few business people in Memphis can: offer basic services to Hispanics in the hope that people like her father don't have to be met with blank stares when they need help.

Following the demographics

The place where Davis works actually is three businesses in one. A grand opening for the entire thing will be held Monday.

SBS - Davis' division - offers a mix of services to Hispanics, including help with bookkeeping, translation and getting a driver's license. It shares space with a U.S. Post Office branch that was set up to handle Spanish-speaking customers.

Occupying most of the building at 3546 Hickory Hill is a Nationwide Insurance agency. It, too, deals especially with a Hispanic clientele.

All the divisions are under the umbrella of Larry E. Crum & Associates. Crum is the Nationwide Insurance agent who jumped at the chance to serve a demographic that's leading a seismic shift in the area's population statistics.

One estimate has put the Memphis area's Hispanic population between 260,000 and 300,000 people, which does not include undocumented residents. The most recent census figures put Shelby County's general population at slightly more than 900,000.

"The people, they're just like we are," said Crum, who owns nine Nationwide agencies in the Memphis area. "They want the same things we want: good jobs, good homes, good schools for their kids, and they pay their bills.

"It's just another culture is all, and we've learned how to deal in that culture because it seemed like another way to solidify our relationship with the community."

Cashing in

The three new businesses share space in a well-established, 17,000-square-foot strip center that's owned by Boyle Trust and Investment Co. and not far from the hustle and bustle of the Winchester Road corridor. It's less than half a mile from the Hickory Ridge Mall at 6075 Winchester Road.

Crum said customers from all over Memphis and DeSoto County already have flocked to his agency since it opened around the first of the year. Many of them might notice at least one thing that's not typical for businesses in the area: employees at Crum's agency don't lock the door whenever a customer comes in.

Hickory Hill is popularly known as a stretch of Memphis where the housing market is sluggish, the foreclosure rate is high, crime is up and businesses aren't exactly flocking for new opportunities.

The area's bad reputation aside, Crum's insurance agency has had a presence in Hickory Hill for about three years, and he said he likes it just fine.

"We don't have bulletproof glass," Crum said, noting a feature other businesses in the area have. "And we're open until six at night, which is an hour past when most businesses are open."

"You know, I was concerned when we went to Hickory Hill. But we're in a strip center that's pretty safe, and we haven't had any incidents of any kind. Hickory Hill has been okay with us."

Cultural enclave

Ivette Monzon, assistant for Hispanic affairs to Shelby County Mayor A C Wharton Jr., said the Hickory Hill community is home to a large Hispanic presence.

"Many businesses around there are closing, so I think (Crum's office) is a good idea," said Monzon, a Costa Rica native who has lived in the Memphis area for almost 30 years.

Davis, whose background is in accounting, is overseeing both the postal and bilingual services divisions of Crum's new enterprise.

"A lot of people here don't understand the ordinary things about living here," she said. "Typical things to you just aren't understood by them."

Some of those needs include writing business plans, basic birth certificate translation and aid with taxes. Davis has dreamed of working in her current job in some form or another since she saw her father struggle through life in America.

"I saw how much trouble he had, so I've always had the concept that I was going to do something like this," she said.

Monday's grand opening ceremony will be attended by officials from Nationwide's corporate office, the U.S. Postal Service and some influential Hispanic personalities, Crum said. As of mid-week, he was still in the process of confirming who would be able to show up.

If the office becomes successful over time, Crum said it could become a prototype for Nationwide agencies across the country.

All of the nine offices he owns reflect his desire to reach out to Spanish-speaking citizens and make sure people like Davis' father have somewhere to go for help.

"We put a bilingual person in our Olive Branch office, we put another bilingual person in our West Memphis office, and we just opened, on the first of January, a Hispanic insurance agency in Nashville," Crum said. "So we just recognize the diverse community is a good market."

New Homes Sales Fall in Jan.

5 percent decline shows softening in housing; Memphis market remains strong

By Martin Crutsinger
Associated Press
February 28, 2006

WASHINGTON -- The backlog of unsold new homes reached a record level last month, as sales slipped despite the warmest January in more than 100 years.

The Commerce Department reported Monday that sales of new single-family homes dropped by 5 percent to a seasonally adjusted annual rate of 1.233 million units last month.

That was the slowest pace since January 2005 and left the number of unsold homes at a record high of 528,000.

Analysts viewed the new data as further evidence that the nation's red-hot housing market, which hit record sales levels for five straight years, has definitely started to cool.

"The decline in new home sales in January makes it clear that there is some real softening in the housing market," said Joel Naroff, chief economist at Naroff Economic Advisors.

While the national market may be softening, a year-over-year comparison of local home sales indicates the housing market has not slowed down in the Memphis area, according to the Memphis Area Association of Realtors.

MAAR said 1,153 home sales were reported in January 2006, compared with 937 homes sold in January 2005, an increase of 23.1 percent over last year.

With the average sales price of a home increasing 14.3 percent from $150,400 in 2005 to $171,900 in 2006, total sales volume reflects a 40.4 percent increase over a year ago.

"With long-term interest rates still very low, the Memphis area is a highly desirable housing market," said MAAR president William Mitchell.

The national 5 percent decline was bigger than expected, dashing hopes that the milder-than-normal January would help to bolster demand. The warm weather had pushed up the level of construction starts last month by 14.5 percent, the fastest rate in three decades.

But the new report showed that with sales lagging, the increase in building activity left a total of 528,000 new homes still for sale at the end of the month, a nine-year high.

Even with the softening in sales, prices were up in January with the median price climbing to $238,100, up 4 percent from December, but below the all-time high of $243,900 set in October.

For the past few years, home prices have been surging at double-digit rates, gains that analysts said will likely slow now that sales are softening and inventories of unsold-homes are rising.

Ian Shepherdson, chief U.S. economist at High Frequency Economics, predicted "real downward pressure on prices over the next few months."

David Seiders, chief economist at the National Association of Home Builders, said surveys showed that the number of builders who are throwing in various amenities for free in order to move homes has risen to 41 percent.

Seiders predicted that home price gains, which were running around 12 percent last year, will slow to about 6 percent this year.

He said a lot of this year's change will reflect less speculative investor activity and more sales spurred by people desiring to live in the homes. "Hopefully, that is all that is developing here," Seiders said.

Some economists are worried that with the inventory of unsold homes rising, there could be significant downward pressure on home prices, triggering a chain-reaction similar to the bursting of the stock market bubble in 2000, a development that contributed to the 2001 recession.

But new Federal Reserve Chairman Ben Bernanke told Congress earlier this month that for now he was looking for a moderate slowdown in the housing industry, not a crash.

The 5 percent January drop in sales followed a revised 3.8 percent increase in December and was the biggest setback since a 7 percent drop in November.

The biggest decline in sales was a 14.9 percent decrease in the Northeast, which followed an even bigger 23 percent plunge in sales in December. Sales in the Midwest were down 10.8 percent after having risen by 21.2 percent in December.

In the South, sales fell by 10.3 percent in January, following a 1.2 percent gain in December.

Bucking the national trend, sales in the West posted an 11.3 percent increase in January after a 6.3 percent gain in December.

Mortgage rates have been rising gradually with the 30-year mortgage now at 6.26 percent, according to the latest Freddie Mac survey. Many analysts believe 30-year mortgages will rise to between 6.5 percent and 7 percent by the end of this year.

They think that increase will be enough to trim sales of both new and existing homes and slow the double-digit gains in prices seen in recent years. The National Association of Realtors reported this month that a record 72 metropolitan areas saw double-digit gains in home prices in the final three months of 2005 compared with price levels at the end of 2004.