Southeast Housing Update: Homes Sales Rise, Inventory Levels Fall
Southeastern housing contacts ended on a positive note in 2012. The majority of brokers and home builders indicated that sales were ahead of the year-earlier level. A third of brokers reported that sales were up significantly, and a third indicated more modest increases in December compared with a year earlier (see the chart). Half of builders said new home sales were up slightly on a year-over-year basis.
Brokers and builders indicated that home inventories remained below the year-earlier level in December (see the chart).
Once again, broker comments indicated that listing inventories are very low in many parts of the Southeast, restraining sales. A look at listing inventories around the region confirms that inventories continued to decline in December (see the chart).
More than two-thirds of contacts reported that home prices rose in December, indicating that prices increased slightly compared with a year earlier (see the chart).
Two-thirds of southeastern home builders reported that construction activity in December was ahead of the year-earlier level (see the chart), and close to three-fourths anticipate that construction activity will be ahead of the year-earlier level over the next several months.
On the labor front, reports from southeastern home builders suggested that the average number of hours worked by their employees during the fourth quarter of 2012 was slightly ahead of the year-earlier level, and the outlook for the first quarter of 2013 also suggested a slight increase in average workweek hours (see the chart). Most builders reported that wages were flat or up slightly, 1 percent to 3 percent, on a year-over-year basis.
Contacts indicated that buyer traffic remained strong in December and reports on activity in early January were encouraging (see the chart). Most continue to expect modest home sales growth over the next several months.
Note: December poll results are based on responses from 68 residential brokers and 33 homebuilders and were collected January 7–16, 2013. 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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