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Real Estate Recap: February 28, 2013

February 28th, 2013 Comments off

The University of Memphis has filed a $43.5 million permit for a 285K square foot residence hall to be built on campus. Click here to read the full details from Eric Smith with The Daily News.

According to the National Association of Realtors, pending home sales rose 4.5% in January to the highest level since April 2010. Click here to read the full story.

Eric Barnes, Publisher for The Daily News will be on Fox 13’s Good Morning Memphis show on Monday, March 4th at 8:45AM to discuss the 2013 Shelby County Tax Reappraisal and Chandler Reports’ 2013 Tax Appeal Kit. Click here for more information.

Be sure to register for our complimentary “Pulse Report” to receive the
latest updates on local real estate trends. Our February report will be
published next week. Click here to register.

Master Your Market Seminar Recap: Uncertainty Pervades Real Estate

February 18th, 2013 Comments off

Seminar: Uncertainty Pervades Real Estate

Article by: Sarah Baker, Real Estate Reporter for The Daily News

2013 will be a big year on many real estate fronts – foreclosures, property taxes and property values.

That was the message industry professionals heard Thursday, Feb. 14, at real estate information company Chandler Reports’ 2012 year-end “Master Your Market” seminar at the Holiday Inn University of Memphis.

Attendees learned about two ongoing issues that affect every homeowner and taxpayer – the 2013 Shelby County reappraisal and the Shelby County school consolidation.

Although separate but related topics, one word was used throughout both presentations from Andy Raines, property tax attorney with Evans Petree PC, and Eric Barnes, publisher of The Daily News and The Memphis News – uncertainty.

“We don’t really know what’s going to happen with the schools yet,” Barnes said. “From a really callous real estate point of view … if the schools are a big driver of where people buy and sell their homes, all of this uncertainty isn’t helping a market move forward. From a somewhat civic point of view, the only people it helps is the private schools.”

Despite the uncertainty with the ongoing legal and legislation situation, Barnes said one thing is almost certain: county taxes are going to go up, perhaps considerably.

“It is a strange dynamic, even if they get a separate municipal school district, county taxes, I think in general, are going to up,” Barnes said. “The city of Memphis, the City Council is committed, and they really mean this, to lowering property taxes in the city. That’s interesting from a real estate point of view. People who say, ‘I want to get out of that really high double taxation in the city of Memphis,’ you could envision over the next four to eight years, a time when that difference isn’t quite as dramatic.”

To that end, Raines said the 2013 county reappraisal is very crucial because, generally speaking, as property taxes go up the value of property goes down. With commercial property, that affects buyers because when taxes are higher, net operating income is lower. With residential property, buyers look at property taxes as a component of what they’re going to pay for the house.

“Taxpayers need to be aware and very diligent about keeping an eye on the property taxes,” Raines said. “In Tennessee, with no state income tax, the property tax and the sales tax has to make a break. In Shelby County, you have unique issues such that the city of Memphis and Shelby County combined rate is significantly higher than any other rate in the state.”

But what value is it that the Shelby County Assessor of Property is trying to put on the property every four years? Raines said under state law, Jan. 1, 2013, is the date at which the fair market value – what a willing buyer would pay for the property and what a seller would be willing to sell it for.

“For a number of years, especially back in the 70s and 80s, the assessor’s values were usually less than you could really sell it for,” Raines said. “But over time, as reappraisals became every four years, that gap has narrowed. Now, the game is really what is the 100 percent fair value?”

Raines said for the first time in history, the value of a reappraisal is going down. How much the value decreases won’t be official until April 20.

“Typically in a reappraisal, because it’s every four years, values were going up, up, up – you would expect that the overall appraised value to go up, perhaps go up significantly,” Raines said. “The best indication we have now is that the overall value of the property will go down.”

The assessor uses a mass appraisal technique and it’s different for residential and commercial. This is because there are 350,583 parcels in the county. For commercial property, various appraisers use an income-approach model based on market data and then tailor it to each property type.

For residential, values come down to neighborhood comparable sales – hence the relevance of a homeowner’s proximity to foreclosures. Raines said the assessor uses “a common sense test” – if a neighborhood has 10 sales and eight of them are foreclosures, deeper analysis is directed at those foreclosures. But if there were only two foreclosure sales out of 10, it’s not as applicable.

Barnes said foreclosure attorneys and trustees are predicting foreclosures will jump about 20 percent – a result of two recent settlements with Bank of America and Wells Fargo.

Barnes said statewide, “the seriously over 90-days delinquent number” is down from the 2008 and 2009 peak. But it’s still historically very high.

“Even though we had this really bad housing recession/depression, there are a lot more loans out there now than there were back in 2005,” Barnes said. “The unemployment rate is better, but it’s still high; lending is happening, but the requirements on buying homes is still difficult. So the foreclosure mess isn’t going away, but it has come down from its real peak. There’s a lot of problematic homes still under the radar.”

Back in 2004 and 2005, in a good economy when unemployment was low and “people were feeling good,” Barnes said there were still 7,500 homes in Shelby County that went into the foreclosure process. Last year, there were 8,000 homes foreclosed in a much worse housing market.

“To some extent, we’re coming down,” Barnes said. “I think it’s going to level out. Even if the economy is booming, there are going to be 7,000 to 8,000 homes that go into foreclosure.”

 

Shelby County January Home Sales Report

February 8th, 2013 Comments off

Home Sales

If January home sales are any indication of what’s to come in 2013 it’s going to be a banner year for residential real estate!

1,344 home sales were recorded for the month, up 46% from January 2012 and up 14% from December. 

Average home sales prices were up 4% from last year to $114,120 compared to $109,716.

28 out of 33 zip codes in the county had an increase in overall sales activity and 79% of the zip codes had improvements in average sales prices.

Bank sales were up 12% from last year with 317 recorded accounting for 24% of total home sales. The average price of a bank sale was up 13% to $72,438 compared to $63,905 in January 2012.

61% of all home sales were valued under $100,000.

Home sales over $1 million were up 300% with 3 filed for the month compared to zero last January. 

Click here to review our January Market Trends reports.

Attend our Master Your Market seminar on Thursday, February 14th to review all of our 2012 Market Trends reports in detail and hear from guest speakers about local real estate topics. Register here.

Commercial Sales

Commercial sales were up slightly in 2012 with 743 sales recorded for the year compared to 725 in 2011, a change of 2.5%.

Average sales prices for commercial properties were up 32% to $1.5 million and total revenue was up 36% with $1.1 billion in total sales compared to $798 million last year.

Sales of Churches and Schools saw the most improvement, up 29% from last year followed closely by Industrial sales with 28% improvement from 2011.

Vacant Land Over 1 Acre (150), Warehouses (95) and Apartments (80) had the most sales recorded for the year. Click here to review the top 5 commercial transactions for 2012.

Commercial bank sales were up 12% from last year with 55 recorded compared to 49 in 2011. Foreclosures on commercial properties were down 14% for the year with 100 recorded averaging $1.1 million.

Click here to review our Year-End Commercial Market Conditions reports.

Residential Foreclosure Analysis

Residential foreclosures were down 9% with 402 recorded compared to 443 last January.

The average amount of a foreclosed home was $84,464 and the average tax appraisal value was $114,717.

Foreclosure activity was down in every city except Bartlett, Lakeland and Germantown. Memphis claimed the most foreclosures with 286 total, down 9% from January 2012.

Foreclosure notices were down 15% for the month with 627 recorded compared to 741 last year.  

Frayser (38127) had the most foreclosure inventory at the end of the month with 235 homes valued at $12.7 million.

Fannie Mae owned the most homes in foreclosure inventory with 391 valued at $50.6 million.

Click here to review our January Market Trends reports.

New Housing & Builder Activity

New home sales were up 20% in January with 71 sales recorded compared to 59 last year.

The average sales price of a new home was up 6% for the month to $247,094. 

Bartlett (18), Collierville (12) and Arlington (12) recorded the most new home sales.

884 new home permits were filed in 2012, up 26% from 2011. Arlington had the most new home permits filed with 206 total averaging $227,109.

Regency Homebuilders ended the year as the top builder with 208 new home starts and 167 new home sales averaging $222,506.

Click here to review our January Market Trends reports.

Mortgage Trends & Lending Analysis

624 residential loans were filed at the time of sale, up 34% from last January.

The average mortgage amount was $148,310 with an average sales price of $169,955 making the average loan to value ratio 87%.

365 loans filed were conventional fixed rate, 169 were FHA fixed rate, 21 were VA fixed rate and 24 were short term loans, loans due within one year.

The top lenders based on the total number of residential loans filed at time of sale were Community Mortgage with 62 loans followed by Magna Bank with 37 loans and Regions Bank with 32 loans. 

Click here to review our January Market Trends reports.