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Old Posted May 11, 2010, 4:06 PM
Johnny Ryall Johnny Ryall is offline
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Condo Market Shows Signs of Rejuvenation
ERIC SMITH | The Daily News

As the housing market begins a slow but steady comeback, the condominium sector is contributing its part after a particularly dreadful slump. Shelby County saw 67 condo sales in April, a 5 percent improvement from 64 condo sales in April 2009 and a 24 percent improvement from 54 condo sales in March, according to the latest figures from real estate information company Chandler Reports, www.chandlerreports.com. And the area’s largest submarket, Downtown, also is headed in the right direction. Condo sales in the 38103 ZIP code totaled 15 last month, up 114 percent from 7 in April 2009 and unchanged from March. For Joel Hobson of Hobson Co. Realtors, it’s another number – 17 – that sums up the condo market’s revival. That’s how many condos he and his team have sold at the 24-unit Goodwyn Condominiums since taking over for the building’s 21 unsold units following a high-profile foreclosure of the property last year. The 18-story tower at 127 Madison Ave. was a picture of the real estate’s woes – an ambitious redevelopment that began when the housing market was booming but came online with overpriced condos at a time when values and consumer confidence were plummeting. Now the building is almost sold out, giving a real estate veteran like Hobson reason to believe that the housing market has turned a corner. “I think it shows that there is still a solid demand for Downtown condominiums,” Hobson said. “It’s a pricing issue really as much as anything, a supply and demand issue. Because there were so many different condos on the market, the supply got inflated. The demand is still there.”

The positive news comes at an important time for Downtown, which has seen some large-scale projects like the Horizon fizzle after being nearly completed and others like One Beale never get off the ground. A host of smaller condo developments, especially in the South Main Historic Arts District, have faltered because of financial trouble or slow sales. But after three years of declining interest in Downtown condos, the market is showing signs of rejuvenation. For example, the 39-unit RiverTown on the Island condominiums on Mud Island, a Grant & Co. development, has seen positive activity this year and is close to selling out. And a 12-month study conducted by the Center City Commission shows that an estimated 2,000 people will move Downtown in the next four years, helping its population of 22,578 grow to almost 25,000, or a 10 percent increase.

Bolstered by the recent opening of the University of Memphis Cecil C. Humphreys School of Law on Front Street, which is bringing 460 college students Downtown, the market should see more demand for residential properties while supply continues to get absorbed. Memphis College of Art is bringing its graduate school to South Main Street, adding about 100 students to the area next year. And later this year, the Visible School, a music and worship arts college, will bring another 120 students to Downtown. Also, the University of Tennessee-Baptist Research Park is expected to generate about 9,000 jobs once finished.

Sue Tines, a broker for Downtown Condo Connection, already is seeing demand pick up. When she heard about a foreclosed condo and sent an e-mail blast about the property, she wound up with a bidding war for it just days after it listed. That’s the type of story that wouldn’t happen a year ago. “We’ve had a lot of people coming in,” Tines said. “It’s been building up.” Prices are building up too. Condo sales in Shelby County last month averaged $104,911, up 16 percent from $90,594 in April 2009 although down 31 percent from a spike of $152,915 in March. April’s total sales volume of $7 million marked a 21 percent increase from $5.8 million in April 2009 but a 15 percent decrease from $8.3 million in March. As for Downtown, the submarket saw its condo sales average $216,807 in April a 7 percent improvement from $202,550 in April 2009 and a 14 percent improvement from $190,487 in March. Downtown’s total sales volume last month was $3.3 million, a 129 percent jump from $1.4 million in April 2009 and a 14 percent jump from $2.9 million in March. Year to date, condo sales have outpaced 2009. Through April 30, Shelby County notched 201 sales, up 6 percent from the same period a year ago. Condo sales this year have averaged $126,839 and totaled $25.5 million, both of which are above the 2009 average of $102,951 and total of $19.6 million. Chandler Reports is a division of The Daily News Publishing Co. Inc.
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