For the second straight quarter, homebuilders pulled more permits than the previous period, perhaps signaling the beginning of the end for the housing crisis.
Builders started 144 homes during Q3 (July through September), according to the latest data from Chandler Reports, www.chandlerreports.com. That marked a 47.3 percent drop from 273 starts in Q3 2008, but it also marked a slight improvement over 141 permits made during the second quarter of 2009.
Also, the number of permits filed last quarter improved with each month: July saw 42, August saw 45 and September saw 57.
Sean Carlson, a partner at Regency Homebuilders LLC, said the vibe has improved for builders, who are “cautiously optimistic.” He attributed the rise of building permits, in part, to the $8,000 first-time homebuyers tax credit, which expires Nov. 30 unless Congress decides to extend it.
“Hopefully we can kind of build on this momentum,” Carlson said. “That’s the thing. I think you’ll see more optimism if we can keep building on each month, each quarter.”
Builders’ permits last quarter averaged 2,718 square feet and $196,226. While both of those numbers reveal slight decreases from previous quarters, they are close enough to the averages over the past couple of years to portend the beginnings of recovery, although it might be too soon to begin using that word.
“It’s like every business right now,” Carlson said. “Everybody’s trying to fight it out and work hard, but it is a day to day, week to week, month to month thing. But I don’t think we can point to any one number and say the recovery is coming.”
Tentative but noticeable
Carlson’s company was the top Shelby County builder during Q3. The Cordova-based builder started 21 new homes during the quarter. Its homes averaged 2,346 square feet and $155,128.
Regency was followed by Charles Morgan of Vintage Homes with 20 permits averaging 3,001 square feet and $206,770; Grant Homes with 13 permits averaging 2,741 square feet and $222,602; Kevin Hyneman with 11 permits averaging 1,703 square feet and $139,909; and Leader Five Start with eight permits averaging 2,063 square feet and $181,231.
Carlson said his company has benefited this year from a nice run of sales and starts in a variety of communities. He credited the efforts of everyone affiliated with the company – from employees to subcontractors to real estate agents – for pulling together and working hard to weather the storm.
“It truly is a total team effort in every phase of homebuilding that’s allowed us to get to this point right now,” Carlson said. “We feel real blessed by it, and we just hope we can continue it.”
Regency has perhaps created some of its own blessing by being in a good variety of subdivisions, including Franklin Farms in Cordova North’s ZIP of 38016. Franklin Farms was the top subdivision with 18 permits averaging 2,051 square feet and $114,510.
It was followed by Sutton Place in Cordova North with 12 permits averaging 1,702 square feet and $139,583; Elpine Gray Estates in Bartlett with 10 permits averaging $162,620 (square footage not available); and Hacks Crossing in Southeast Shelby County with six permits averaging 1,927 square feet and $169,308.
The top ZIP codes last quarter were Cordova North’s 38016 with 51 permits averaging 1,987 square feet and $139,237; Arlington/Lakeland’s 38002 with 32 permits averaging 3,340 square feet and $197,856; and Southeast Memphis’ 38125 with 21 permits averaging 3,087 square feet and $222,540.
Source: Memphis Daily New