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Home sales set Sept. record

But increases slip, more 'for sale' signs sprout
By Amos Maki

October 17, 2006
The Memphis housing market continues to buck national trends as local home sales hit a record for September.
However, there are signs of the local market slowing as sales and sales volume posted smaller increases than in previous months, and a larger supply of homes on the market has some analysts worried about a drop in prices.

According to the Memphis Area Association of Realtors, 1,522 homes were sold in September, up from 1,516 last year.
Although the increase is small, it is still the highest number of sales ever recorded for the month of September.

Sales volume for September hit $263.6 million, up from $260.6 million over the same period last year.

For the year, sales volume hit $2.3 billion, up 17.4 percent from $2.7 billion over the same period last year. Total sales volume for 2005 was $3.2 billion.

There was also a spike in the number of homes on the market. In September, MAAR recorded 11,178 home listings, up 22.6 percent from 9,121 last year.

"Buyers have plenty of homes to choose from, " said MAAR president William Mitchell. "Those factors make the time right to find that perfect home, and sellers need to respond with homes that have move-in readiness and are priced to be competitive in the given market."

MAAR recorded 10,962 home listings in August, up 18.9 percent from 9,217 in August 2005.

With more homes on the market and the possibility of falling prices, now is a good time to consider buying, said Jennifer Burda, general manager of Chandler Reports.

"It is more of a buyer's market," she said.

According to Chandler Reports, 7,176 homes were sold in Shelby County in the third quarter, up from 7,175 over the same period last year.

Cordova's 38016 Zip Code led the way, with 503 homes selling over the three-month period ending Sept. 30. The 38018 Zip Code, which also includes Cordova, posted 426 sales.

The fast-growing Lakeland/Arlington Zip Code of 38002 recorded 445 home sales, an 11.3 percent jump over the same period last year.

Collierville's 38017 Zip Code recorded 428 sales.

"Collierville used to be where all the growth was going, but it shifted gears to Northeast Shelby County," Burda said.

Nationally, home sales are bottoming out with lower home prices attracting buyers across many parts of the country, according to the National Association of Realtors.

Prices of new houses will fall this year for the first time since 1991, and existing homes will have the smallest gain ever, NAR said.

The median price for a new home will probably dip 0.2 percent to $240,500, the first decline since a drop of 2.4 percent 15 years ago, NAR said. The price for previously owned homes will probably rise 1.6 percent to $223,000, the smallest gain on record, NAR said.

The inventory of new and existing homes for sale ballooned to record levels as the five-year housing boom slowed. The large supply of properties is forcing sellers to accept lower offers.

Total sales for 2006 are expected to drop 8.9 percent to 6.45 million. However, 2006 will still be the third-strongest year on record, following 2004 and 2005.

"Many potential home buyers who have been taking a wait-and-see attitude or taking their time and being methodical in the search process are being enticed by lower home prices," said David Lereah, chief economist for NAR.

"Given a positive economic backdrop of lower interest rates and job creation, we expect sales activity to pick up early next year."

-- Amos Maki: