« A Great Equalizer | Main | Disarray and Memphis »

Most Recent Data Show The 'Sky Isn't Falling' In Residential Market

Real Estate & Development
ERIC SMITH | The Daily News

For Bill Maury, a broker and vice president at Hobson Co. Realtors, the best defense is a good offense.

A couple of months ago, after getting numerous phone calls and e-mails from clients asking about the slumping residential housing market, he decided to send them each a letter explaining that Memphis doesn't face the same problems that plague other cities, namely those on either coast.

He didn't want to lie to them - or turn Pollyanna by painting an overly rosy picture of Memphis real estate - but he did want to set the record straight.

"A customer will see through if you're telling them it's great. It's not great, but it's good," said Maury, a 23-year industry veteran and newly elected director to the Memphis Area Association of Realtors (MAAR). "If you sit down with someone, you can show them the numbers and let them know that the market here is not as bad as everyone thinks - that the sky is not falling."

Signs of hope

The sky might not be falling, but residential home sales nationwide are limping into the final month of 2007.

Each week of the past year has produced some headline or another depicting doom and gloom in the housing market, and many local Realtors will be happy to see this year vanish - if only so they'll no longer hear how sluggish 2007 has been compared to the record sales of 2006.

During these last few months, however, some glimmers of hope have appeared on the horizon. For example, residential housing in Shelby County registered a decent October with sales increasing from the previous month for the first time since early summer.

The month's sales totaled 1,747 units sold, up 10.4 percent from the 1,582 sold in September, according to the latest data from real estate information company Chandler Reports, www.chandlerreports.com.

Granted, that was down about 18 percent from the 2,134 homes sold in October 2006, a year that rewrote the real estate record books, but it's a sign nonetheless that people are continuing to sell and buy homes - housing woes notwithstanding.

"October was a good month for us," said Elsie Ward, broker for Crye-Leike Inc. and vice president-elect of MAAR. "We've been encouraged because there are still buyers, properties are still being shown and properties are still selling."

No Seasonal Affective Disorder here

Of course, they aren't selling at the same pace as 2006. Year-to-date sales are down 15.8 percent for 2007 through Oct. 31. The 18,296 homes sold in Shelby County are down significantly from the 21,722 sold in 2006 for the same period.

But it could still wind up being a banner 12 months for the county.

"What we're seeing is that this will be the second or third-best year in the last decade, so we're not having that bad a year," Ward said. "It's not going to last year, but last year was outstanding, far and above the best year anybody has had."

Moreover, while November and December are typically flat, they have the potential to be active as families look to reap the many benefits of home ownership and take advantage of low rates and healthy inventory.

"I find that November and December sometimes are the best months of the year because people are trying to get into a house before Christmas, before the end of the tax year, for whatever reason," Maury said. "For me, four out of five years, I'm going to be the busiest in those two months."

Ward agreed that the shorter, colder days - what many would consider a dreadful climate for the housing market - don't necessarily translate to a darkened sales period.

"Houses sell every month of the year," Ward said. "There will still be sales made in November and December. Many people still like to buy before the end of the calendar year, so we never write the year off. Some years, November has been my very best month."

Not stellar, but not awful, either

One of the surprising stories from October's numbers was the oft-maligned suburb of Cordova, whose 38016 ZIP code notched a county-high 115 sales during the month at an average sales price of $172,223.

"Sometimes the perception is that houses aren't selling well in Cordova, and that's really far from the truth," Ward said. "Houses sell every day in Cordova, so it's still doing well. It's a very affordable area, a good place for first-time homebuyers to go. There's all price ranges in Cordova, but it's especially good for first-time buyers.

"What we find is that there's houses selling all over town."

Still, the usual suspects - Germantown and Collierville, plus a few smaller outlying areas such as Arlington and Lakeland - led the way in October as they have all year.

No matter what happens to close out 2007, Realtors are ready to start anew. Maury called this year "unusual" because of the subprime fallout and the rise of foreclosures and the lack of consumer confidence.

But like many in the profession, he said he believes Memphis will rebound once 2008 rolls around.

"The buyers and sellers in Memphis got caught up in so much of the national news that it really affected Memphis more than it should have," he said. "I've always thought of Memphis as a relatively stable market. I think this year has been a good year.

"It certainly hasn't been an awful year."