Southeast housing update: Recent Atlanta Fed polls show housing slump continues
The Federal Reserve of Atlanta's monthly survey of regional residential real estate brokers and homebuilders saw home sales weaken again in August. Reports from Florida brokers, however, indicated that declines moderated somewhat. A look at sales on a month-to-month basis indicated that sales softened from July to August across the region, with more respondents indicating that sales were down significantly compared with more modest responses in July.
Many contacts reported that there was a great deal of uncertainty, and buyers were hesitant to move ahead. Many commented that those who seek financing to purchase a home were finding it difficult to secure a mortgage. Brokers and builders remained frustrated with changes in finance regulation, and some noted that the process has become increasingly confusing and inconsistencies seemed to abound based on broker observations.
Many contacts reported that cash deals continued to move ahead. Data from the Orlando Regional Realtor Association confirmed demand by cash buyers held fairly steady, while financed deals continued to weaken in August.
Buyer traffic remained weak in August on a year-over-year basis. Builders continued to note that traffic softened further; however, brokers said that year-over-year declines held steady from July to August. Florida brokers actually noted a pick-up in buyer traffic, slightly ahead of a year earlier, while elsewhere in the region buyer traffic continued to weaken. Contacts across the region commented that since the close-out of the housing stimulus, traffic had been at low levels. Many commented that another housing stimulus was essential to improving conditions while an equal number were opposed to more government intervention.
Southeast brokers indicated that home listing inventories continued to rise, while builders reported that new home inventories remained below the year-earlier level but trended up slightly. Both brokers and home builders reported that downward pressure on home prices remained intense. Builders in particular were concerned about the number of foreclosed and bank-owned properties coming to market. Some noted that they could only cut prices so far while banks sold homes well below loan value.
Southeastern brokers and home builders indicated that the outlook for sales over the next several month continued to weaken in August. However, comparisons are against strong sales stimulated by the initial housing stimulus.
Note: The August survey results are based on responses from 149 residential brokers and 54 homebuilders and were collected Sept. 7–15, 2010.
The housing survey's diffusion indexes are calculated as the percentage of total respondents reporting increases minus the percentage reporting declines. Positive values in the index indicate increased activity, while negative values indicate decreased activity.
By Whitney Mancuso, a senior analyst in the Atlanta Fed's research department
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