Southeastern housing update: Polls show sales ahead of weak levels in 2010
Reports from the Atlanta Fed’s southeastern housing contacts indicated that home sales growth remained slightly ahead of weak levels a year earlier in August while the outlook for sales and construction activity picked up slightly.
Florida brokers reported that home sales growth slowed notably in August; less than half reported sales gains compared with more than half in July. Outside of Florida, southeastern brokers noted a modest pick-up in sales growth.
We have been hearing for some time that cash buyers were major players in the southeastern housing market, so we asked brokers about these cash buyers. According to our sources, investors, second-home buyers, international buyers, and retirees are purchasing with cash. Our sources also note that investors dominate cash purchases across most of the Southeast. These anecdotal reports appear to line up with available data. The National Association of Realtors reported that cash buyers accounted for 29 percent of August home sales and 22 percent of total sales while the organization noted that investors accounted for the bulk of cash purchases. The Orlando Regional Realtors Association reported that cash sales accounted for 50 percent of August home sales. Knoxville Area Association of Realtors data indicated that cash purchases accounted for 25 percent of sales in August.
More than half of southeastern builders reported that home inventories were below the year-earlier level in August while close to half of brokers reported declines. Brokers indicated that August inventories were similar to July, while builders indicated declining inventories over the period.
Just over half of Southeastern builders continued to report declining home prices in August while fewer brokers reported declines than they have in recent months.
Southeastern brokers and builders reported that buyer traffic slowed in August on a year-over-year basis, but the outlook for sales growth improved slightly over weak results last year.
Note: August poll results are based on responses from 82 residential brokers and 44 homebuilders and were collected September 6–14, 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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