Is COVID boosting home sales? (As Reported by The Daily Memphian)

Is COVID boosting home sales? (As Reported by The Daily Memphian)

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By , Daily Memphian Updated: October 12, 2020 7:36 AM CT | Published: October 12, 2020 4:00 AM CT


His East Memphis backyard had become a COVID-era office for the business owner, in part because his wife and two college-age children filled the contemporary house with their own work and studies.

And unusually long hours the businessman spent in his backyard brought him to a revelation: It’s noisy back there trying to talk on the phone and work on the laptop, what with the neighbors on three sides of him.

“The yard became his sanctuary. But there’s always something going on with people in their pool, cutting grass, trimming trees,” said Crye-Leike Realtors agent Lisa Harris. “He said, ‘I can’t believe all the noise here.'”

Before, the man wasn’t even considering moving. But now Harris has helped his family buy a house that “backs up to nothing” on the east side of Germantown.

Sellers rule as home listings keep shrinking

“I don’t think he would have bought if he hadn’t been out in the yard so much,” Harris said.

Which suggests a new irony for at least one business sector: The pandemic, combined with low interest rates, may now be starting to boost home sales. At least among those who have job security.

September sales rise substantially

September home sales for the Memphis area rose 7.9%, stanching what has mostly been a pattern of monthly losses during both a pandemic and a time when the inventory of houses for sale continues to drop.

The Memphis Area Association of Realtors reported Sept. 7 that 1,813 housing units were sold during September, compared to 1,681 in September 2019.

Year to date, sales are down 3.8%. During the first nine months of this year, 14,314 houses were sold compared to 14,886 during the first nine months of 2019.

Sales volume — the total dollar amount of the home sold —continues to rise thanks largely to the average and median prices of houses sold.

Memphis-area home sales fall 5.3% in August, but prices rise

Year to date, sales volume was $3 billion, up 5.6% from the first nine months of 2019 when $2.84 billion worth of homes had been sold.

The average sales price September to September rose 14.7% to $224,713. The median sales price rose 15%, from $163,000 in 2019 to $187,500 this September.

Inventory continued to slide, but by a small amount. In September, 2,863 units were listed for sale, down a half-percentage point from a year before.

“Sales were up almost 8% from the same time a year ago, when there wasn’t a pandemic,” said Kathryn Garland, MAAR president. “And average sales price continues to rise.”

Crye-Leike’s best month?

In some ways, September was the best month in the history of the city’s largest realty firm, Crye-Leike Realtors, indicated Neil Hubbard, executive broker for the agency.

Crye-Leike sold 19% more houses in September than a year ago, and the agency’s sales volume for the month rose 46% compared to September 2019, Hubbard said.

Memphis-area home sales rise a ‘pretty remarkable’ 1.9% in July

“Best September in company history,” Hubbard wrote in an email to The Daily Memphian.

COVID-19, social distancing and working/studying from home are spurring some sales instead of tamping them down.

“Some people are in fact moving because they are spending much more time at home and have decided they want or need something a little different,” Hubbard said.

Agent Judy McLellan leads Crye-Leike in sales both for September and over the year’s first nine months.

“It’s been incredible to see the amount of activity and the number of sales,” McLellan said.

She credited low mortgage interest rates and job-secure buyers spending more time at home because of the pandemic and feeling they need more space.

Many of the buyers also are focused on the outdoors of these properties, with special interest in pools, McLellan said.

“Typically, if a house has a pool that tends to be eye-candy that is driving the purchases,” she said. Even if the buyers don’t swim, she said, “they love to have it to look at because it’s a great way to decompress.”

For much of this difficult year, many agents have been framing sales as occurring “in spite of the pandemic,” Lisa Harris said.

“But we’re selling houses like crazy,” said Harris, whose $5 million in September sales marked the best month of her 37-year career. “I would say it’s because of the pandemic. What else could be the reason?”

She believes the pandemic and social distancing have forced people to slow down, and to assess their homes and their lives more than ever.

Once all the “fluff” – like eating out, socializing and going to events – is removed, she said, “you have your family under your roof.”