Southeast Housing Update: Inventory Shortages Appear to Constrain Sales
Once again, southeastern housing contacts reported that March home sales remained ahead of the year-earlier level. More than three-fourths of brokers and two-thirds of home builders indicated that sales were ahead of the year-earlier level (see the chart). Most brokers indicated that sales in March met or exceeded their expectations.
Reports of shortages of available homes for sale continued. As the chart below shows, nearly all brokers indicated that home listing inventories were below the year-earlier level. Low listing inventories continued to restrain home sales and generate multiple offers for properties, particularly at the low end of the market.
Both builders and brokers continued to indicate rising home prices in March. Most brokers reported that home prices rose slightly in March on a year-over-year basis (see the chart). Builders’ responses indicated slightly more positive home price gains, with nearly a third of builders describing home price gains as “up significantly,” and only 13 percent of brokers reported that prices were up significantly.
Once again, southeastern builders indicated that construction activity was ahead of the year-earlier level. However, most builders reported that construction activity had met or fallen below their plans for March (see the chart).
The outlook for sales among brokers and builders over the next several months remained positive (see the chart). Most brokers indicated that buyer traffic was ahead of the year-earlier level in March, and the outlook for sales growth over the next several months was better than expectations for sales a year earlier.
The outlook for new home construction activity among southeastern builders remained positive, as did their outlook for new home sales this spring. Participants indicated that they expect new home sales and construction to be slightly ahead of the year-earlier levels (see the charts).
Note: March poll results are based on responses from 56 residential brokers and 29 homebuilders and were collected April 1–10, 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, senior economic research analyst in the Atlanta Fed’s research department
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