Southeast Housing Update: Traffic, Sales, Prices Up
The Atlanta Fed conducts a monthly poll of southeastern broker and builder contacts in an effort to detect emerging real estate trends prior to the release of the official statistics. Besides our standard questions on key metrics, we will occasionally add a special question or two with the goal of better understanding the mechanics behind the emerging trends.
We recently received results from the he March poll, and instead of discussing all of the results, I wanted to highlight just a few of the findings:
- The number of brokers and builders reporting an increase in buyer traffic rebounded in March. This rebound supports the notion from earlier reports that weather conditions were in fact weighing down buyer traffic.
- More brokers reported an increase in home sales in March than in February. At the same time, more builders reported a decline in home sales from February to March.
- For the first time since February 2011, more builders reported that inventory levels had increased than decreased. However, the opposite was true for brokers, most of whom continued to report a decline in inventory levels.
- The vast majority of brokers and builders continued to report that home prices increased from the year-earlier level.
Based solely on these poll results, it’s difficult to draw any sort of clear conclusion about what activity might look like going forward.
At this point, our special questions come in handy. We posed two special questions this month to our business contacts. Brokers were asked if they expect to see a “snapback” in the home sales trend, and builders were asked if they expect to see a “snapback” in the home building trend (see the charts). (We defined “snapback” as above-normal growth that would roughly put the industry on par with the previous level and help to at least partially recoup lost activity from the first few months of the year.)
You can see from the poll results that only 22 percent of brokers and 11 percent of builders expect to see a snapback in home sales and home building activity. The majority of respondents—56 percent of brokers and 68 percent of builders—indicated that they expect to see growth from the current level, but not a snapback. The remaining respondents indicated that they don’t expect to see a snapback, either because they expect the weakness to persist or because activity never slowed down in their market.
The results of the special questions aligned nicely with the results of the outlook questions that we posed. In the final analysis, most brokers and builders in the Southeast indicated that they expect growth to be flat to slightly up from the year-earlier level.
Note: March poll results are based on responses from 41 residential brokers and 19 homebuilders and were collected April 7–16, 2014. 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, and negative values indicate decreased activity.
Detailed results from the construction and real estate survey are available. If you are a real estate broker or homebuilder and would like to participate in this poll, please let us know by emailing RealEstateCenter@atl.frb.org.
By Jessica Dill, senior economic research analyst in the Atlanta Fed's research department
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