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Memphis, TN - Newest New Home Sales Decline Year-Over-Year in February After Rising Year-Over-Year in January

Posted on: May 07, 2012 09:27:45 AM

Sales of new homes in the Memphis, TN market dipped year-over-year in February, moving downward after a rise in January 2012. There was an 9.0% decline in new home sales from a year earlier. In comparison, new home sales in the same month last year saw an 8.2% rise year-over-year in January.

A total of 1,052 new homes were sold during the 12 months that ended in February, down from 1,058 for the year that ended in January.

Out of all housing sales, new home sales accounted for 4.0%. This is less than the a year earlier when new home sales made up 5.9% of total sales. For new and existing homes, sales climbed year-over-year in February after also increasing in January year-over-year.

Pricing and Mortgage Trends

In February, the average price of newly sold homes increased 3.5% year-over-year to $215,170 per unit. This is a reversal from the 11.8% decline in January from a year earlier.

For newly sold homes, the average mortgage size saw a rise year-over-year along with new home prices. Average mortgage size rose 4.9% to $193,187 in February from a year earlier. In January 2012, average mortgage size on newly sold homes saw a 6.2% decline from a year earlier. The overall percentage of sale price that was being financed increased 1.2 percentage points year-over-year to 89.8% in February 2012. This was another rise after January 2012 when there was a 5.5 percentage point rise from a year earlier.

Other Market Trends

As a share of new home sales, single-family home sales have climbed from last year while the share belonging to attached units has fallen. The share of new home sales belonging to single-family homes jumped from 95.5% in February 2011 to 96.7% of sales in February 2012. Meanwhile, attached units as a percentage of all new home sales sank to 3.3% of sales from 4.5% of sales.

The average unit size of newly sold homes declined 9.3% year-over-year to 2,151 square feet in February 2012. This drop was opposite the price rise, a pattern also seen in January 2012 when the average size of newly sold homes dropped 32.2% to 1,781 square feet.

Foreclosures and real estate owned (REO) sales remained a burden on the market. Together, foreclosures plus REO sales represented 63.3% of existing home sales. In February 2011, they accounted for 65.9%. The percentage of existing home sales involving foreclosures rose to 36.2% in February from 34.3% a year earlier while REO sales as a percentage of existing home sales fell to 27.1% from 31.7% a year earlier.

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