Southeast Housing Update: Investors Continue to Contribute to Improvements in the Region
Southeastern housing contacts continued to indicate sales gains in September. Brokers indicated that sales remained slightly ahead of the year-earlier level while builders reported that sales growth had slowed notably in September. Most builders described new home sales as flat to slightly up in September on a year-over-year basis (see the chart).
In the Atlanta Fed's latest housing poll, we asked Southeast brokers about the distribution of home buyers in their market. They indicated that existing homeowners account for the largest share of market participants in the Southeast, close to half, while first-time home buyers and investors both account for about a quarter of the market. Investors are more active in the Florida markets and account for nearly a third of buyers across the state, according to our poll. However, several brokers reported that there are submarkets where investors account for close to two-thirds of sales.
Digging a little deeper, we heard that Florida investor-buyers were both foreign and domestic, while outside of Florida, investors were mostly domestic (see the chart).
The majority of Florida brokers also indicated that investor sales had improved from earlier in the year, while areas outside of Florida reported that investor sales were flat to slightly up (see the chart).
The outlook for sales to investors next spring remains strong among Florida brokers, but the majority of brokers outside of Florida anticipate sales to investors will be similar to recent levels (see the chart).
Perhaps contributing to the lower levels of sales to investors in some Southeast markets are low home inventories. Both builders and brokers indicated that home inventories continued to decline on a year-over-year basis. Most brokers reported that home inventories were flat to down from August to September while most builders indicated no change.
The majority of Southeast builders and brokers continued to report modest annual home price gains again in September (see the chart).
The outlook among Southeast builders and brokers remained positive. Builders' prospects were a bit more upbeat while brokers anticipated flat to modestly positive annual sales growth over the next several months.
Note: September poll results are based on responses from 58 residential brokers and 28 homebuilders and were collected October 1–10, 2012. 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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