Southeast Housing Update: Sales Continue to Rise despite Constraining Factors
The Atlanta Fed’s monthly poll of regional brokers indicates that home sales remained ahead of the year-earlier level during April. However, Florida brokers continued to report the strongest growth. As the chart below shows, all of the Florida brokers in our latest poll said that home sales exceeded the year-earlier level.
Reports from Southeast brokers outside of Florida were not quite as robust (see the chart). However, two-thirds reported that sales in April exceeded the year-earlier level.
Despite sales gains, Southeast brokers continued to note that sales were restrained by lack of inventory. Nearly 80 percent of Southeast brokers polled said that inventories were below the year-earlier level. Several described the housing market as very tight and said that buyers were finding it difficult to find homes. When buyers did find a home, they were urged to act quickly because many properties were receiving multiple offers. Brokers also noted that appraisals continued to be a problem: appraisals below market rates were delaying, and in some cases halting, sales. However, brokers indicated stronger year-over-year home price gains in April than earlier in the year.
Our poll of regional home builders indicates that new home markets in the Southeast continued to improve. More than two-thirds of the builders reported that sales in April were ahead of year-earlier levels, and many indicated that sales levels were “up significantly.” Construction activity appears to be tracking closely to new home sales, which are in line with the comments of builders that access to construction finance and shortages of lots restrained the new home market.
Builders continued to report new home price appreciation in April, with most indicating that new home prices rose “modestly.” At the same time, builders reported that material and labor costs continued to rise as well.
The outlook for sales among brokers and builders over the next several months remained positive and ahead of year-earlier expectations (see the charts).
Note: April poll results are based on responses from 45 residential brokers and 27 homebuilders and were collected May 6–15, 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.
If you are a real estate broker or homebuilder and would like to participate in this poll, please send a note to RealEstateCenter@atl.frb.org.
By Whitney Mancuso, a senior economic analyst in the Atlanta Fed’s Research Department
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