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June 2013 Real Estate Update

July 9th, 2013 Comments off

Home Sales

June closed out the second quarter with 1,444 home sales, up 9% from 1,327 in June 2012.

Average home sales prices were up 11% to $158,056 from $142,341 last year.

Year-to-date home sales are up 9% and average sales prices are up 10%. 2nd Quarter sales were up 11% from 2Q 2012.   

Bank sales accounted for 15% of total home sales  for the month and were down 39% from last June with 214 recorded. Year-to-date bank sales are down 18% from the same period last year.

21 out of 33 zip codes in the county had an increase in overall sales activity in June and 22 zip codes had an increase in average sales prices. 

45% of all home sales for the month were valued under $100,000.

Home sales over $500,000 were up 12% from last year with 47 recorded  compared to 42 in June 2012. 

Attend our “Master Your Market” 2013 Mid-Year Review for a full recap of real estate trends through the first half of the year. Guest speaker Cheyenne Johnson, Shelby County Assessor, will discuss the 2013 tax reappraisal and Don Caylor, President of the Memphis Area Home Builders Association, will review the latest in new housing and builder activity. Click here to register.

Click here to download our Residential Market Conditions reports.

Commercial Sales

Commercial sales were down 14% in May with 61 recorded compared to 71 in May 2012.

Average sales prices were down 70% to $560K compared to $1.8 million last year. 

Through the first 5 months of the year overall commercial sales are up 5% and average prices are down 21% from the same period last year.

The largest commercial transaction recorded in May was the sale of 5155 Citation Drive in Oakhaven for $11.3 million. The 398,992 square-foot warehouse was purchased by Exeter Property Group on May 21st. Click here to read the full details of the transaction.

Office and Special Purpose properties saw an increase in overall sales activity in May while all other property types had decreases or were unchanged from May 2012.

Vacant Land Over 1 Acre (10), Apartments (9) and Warehouses (8) had the most sales by property type in May. 

Click here to download our latest Commercial Market Conditions reports.

Residential Foreclosure Analysis

Residential foreclosures were down 16% in June with 253 recorded compared to 301 last June.

The average amount of a foreclosed property was $78,418 and the average tax appraisal value was $109,009, both down slightly from June 2012. 

Year-to-date foreclosures are down 15% from the same period last year.

Foreclosure activity was down in June for virtually every municipality. Arlington and Millington had slight increases while the city of Memphis had a 13% decrease. 

Foreclosure notices were down 7% for the month with 601 recorded compared to 646 last June. 

Westwood (38109) had the most properties in foreclosure inventory at the end of the month with 237 homes valued at $11.4 million. Frayser, Raleigh and Oakhaven all have over 200 properties in their foreclosure inventory. 

Fannie Mae owned the most foreclosed properties with 372 total valued at $40.7 million.

Click here to download our Detailed Foreclosure Analysis reports.

New Housing & Builder Activity

New home sales were up 9% in June with 79 sales recorded compared to 70 in June 2012.

The average sales price of a new home was up 11% to $255,581.

Year-to-date new home sales are up 17% and average new home sales prices are up 6%. 

Arlington (18), Collierville (17) and Southeast Shelby County (7) had the most new home sales recorded for the month.  

105 new home permits were filed in May, up 4% from May 2012. Collierville had the most new home permits filed in May with 20 total averaging $297,184. 

Regency Homebuilders was the top builder in May based on new home sales and new home permits with 21 sales recorded averaging $240,256 and 28 permits filed averaging $219,309.

Click here to download our New Housing Inventory & Analysis reports.

Mortgage Trends & Lending Analysis

802 residential loans were filed in June at the time of sale, up 8% from June 2012.

The average mortgage amount was up 7% from last year to $183,958 with an average sales price of $211,731 making the average loan to value ratio 87%.

Collierville had the most loans recorded at the time of sale with 106 total averaging $255,650.

480 loans filed were conventional fixed rate, 185 were FHA fixed rate, 40 were VA fixed rate and 10 were short term loans, loans due within one year.

The top lenders in June based on the total number of residential loans filed at time of sale were Magna Bank with 90 loans, Community Mortgage Bank with 69 loans and BancorpSouth Bank with 47 loans.

Click here to download our Residential Lender Analysis reports.

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.”