Southeast housing update: Polls show existing home sales softened in April
As noted in Atlanta Fed President Dennis Lockhart's speech last week, "The housing sector impacts economic growth in two basic ways—one direct and one indirect." Because of its importance we continue to closely monitor developments in our region.
Last week, the National Association of Realtors released first quarter 2011 existing home sales numbers by state, confirming brokers' recent reports on sales activity in the Southeast. Sales in the Southeast increased 4 percent during the first quarter compared with a year earlier. Sales were boosted by strong sales gains in Florida, up 17 percent, while declines in the remainder of the region moderated. Nationally, sales over the same period were down nearly 1 percent, an improvement following a 21 percent year-over-year decline during the fourth quarter.
The Federal Reserve of Atlanta's most recent monthly poll of regional residential real estate brokers indicated sales weakened across the region on a year-over-year basis in April; however, the majority of Florida brokers continued to report gains. Once again, Florida contacts report distressed sales, with cash buyers driving the market.
Southeastern home builders continued to report that new home sales and construction remained at anemic levels in April. More than half of builders reported that sales and construction were down from weak levels a year earlier. Interestingly, half of the Alabama builders we contacted did not respond to our questionnaire, presumably the result of the recent damage sustained by the tornadoes that hit the state on April 27.
Despite slightly weaker sales reports in April, contacts did indicate that home inventory levels eased somewhat on a year-over-year basis. The Orlando Regional Realtors Association reported that available inventory in its MSA continued to decline in April as well. It reported the number of new listings continued to steadily decline, also noting that the Orlando market had a 4.8-month supply of homes in inventory. The Greater Nashville Association of Realtors reported that inventory was down slightly in April from a year earlier, and months' supply continued to move more toward a balanced market.
Southeastern brokers indicated that home price declines eased in April. Reports from builders, meanwhile, indicated new home prices were little changed, with most continuing to report declines.
Southeastern brokers reported stronger buyer traffic in April while builders continued to note that buyer interest weakened.
Note: April poll results are based on responses from 86 residential brokers and 35 homebuilders and were collected May 2–11, 2011. The housing poll'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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