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Real Estate Guru: ‘There’s a lot of pent-up demand’

After 37 years of selling houses, Steve Brown, executive vice president of Crye-Leike Realtors Inc. and vice president of the Memphis Area Association of Realtors, is well aware of the current real estate climate.

He knows that Memphis and Shelby County are a ways away from pre-recession totals. So far away, in fact, that he characterizes recent home sales activity as the “new norm.”

“Frankly, we had anticipated a stronger second half, but we’ll take any steady improvement,” Brown told The Daily News for Wednesday’s home sales story. “Volume is less predictable than units. I think the market is consistently tracking somewhere around 1994 to 1996 volume – not ’04 or ’06 volume – but ’94 to ’96 volume.”

But in contrast, he’s bullish that there’s a lot of pent-up demand. And that’s not just the salesman in him talking.

“I’m not trying to be Pollyannaish about it,” he said. “There are a lot of people that are doubled up right now – like kids staying at home longer, relatives staying with each other. I think people are going to be sick of each other in two or three years.”

Couple that with hundreds of thousands of homes that are destroyed every year – by fire, natural disasters, etc. – and the sub-par rate of new construction, and you’ve got a recipe to get things moving again.

“You take the combination of immigration, the destruction of housing stock and the people that are doubled up…when the economy turns improves, you’re going to see some pretty significant home buying going on,” Brown said. “But we’re going to have to get done with these foreclosures before you really see that kick in a big way.”

Dansette

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