Memphis Awaiting Housing Upswing from the Memphis Commercial Appeal

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By Cassandra Kimberly


Memphis Commercial Appeal


Saturday, October 25, 2008


With existing home sales on the rise in September nationwide, local real estate professionals are hoping the data is a sign the housing slump has finally hit bottom and the market is on the way up.


“I think what we’re seeing going on right now is we may be running along the bottom of the trough,” said Dick Leike, co-founder of Crye-Leike, Realtors Inc., the largest residential real estate firm in Memphis. “We may see an increase in sales beginning anytime.”


The National Association of Realtors said Friday that sales of existing homes rose by 5.5 percent in September compared to August, the best showing since a 5.6 percent increase in July 2003, during the five-year housing boom.


September existing home sales — including single-family, townhomes, condominiums and co-ops — were also 1.4 percent higher than the same month in 2007 marking the first year-over-year increase since 2005, according to the report.


Memphis, however, seemed to lag behind national trends in September with total existing homes sales at 1,107 — down 5.7 percent from August and 3.1 percent from September 2007, according to the Memphis Area Association of Realtors Multiple Listing Service.


Historically, Memphis feels the impact of the national market much later than the rest of the country, said Doug Collins, president of the Memphis Area Home Builders Association.


“This downturn in housing started in some parts of the country in 2005, but we didn’t feel it until 2006,” he said. “And we didn’t see the pullback or the huge decreases because our market is a much more stable market and our housing values are much more affordable.”


Median sales prices in Memphis also decreased by 11.1 percent in September over last year, bringing prices down to $120,000 compared to $135,000 in 2007.


Nationally, the median sales price has dropped to $191,600, down by 9 percent from a year ago.


A mix of low rates, low prices and tax credits makes a perfect opportunity for first-time home buyers and investors to jump into the real estate market, said Steve Brown, vice president and general manager ofCrye-Leike’s Memphis region.


Buyers will find the biggest discounts in foreclosures and distress sales, he said. However, they should expect to find major discounts on home sales due to “normal life events” such as empty-nesters moving to a smaller home or job transfers.


“Those people are only discounting their houses by 5 percent…” he said. “Those big discounted prices are available, but you don’t find them in nondistressed homes.”


While brokers hold out for the best, the changes in Memphis may not be seen until after the elections and the holidays, Leike said.


“I really believe the real estate industry is headed for better times, I just don’t know if it’s going to be at the beginning of the year or midyear,” he said.


Contact Reporter Cassandra Kimberly: 901-529-2786