02/07/2012
Florida real estate looking up
Last week I spent a few days in Florida, accompanying our Jacksonville Regional Executive Chris Oakley on some of his meetings with businesses in central Florida. One visit was with the Florida Realtors group in Orlando.
The group recently expanded its economic research function and has two Ph.D. economists and a research analyst working on several projects designed to track and report on Florida's real estate sector. It has also revamped its website, which now includes data and charts on single-family and condo sales and prices, news reports that focus on Florida real estate trends, and even reports on commercial and international sales. It's a great resource for anyone looking to keep current with the real estate sector in Florida.
The group held its 2012 Florida Real Estate Outlook Conference in December, which looked at emerging trends in the sector. A file containing all the presentations can be found here. At the conference, Dr. John Tuccillo, chief economist for Florida Realtors, said that
"Our state is in a mini-recovery. Sales are trending up, listing inventories are falling, the supply of lender-related properties has stabilized, and we are seeing multiple offers on homes in some local markets."
His comments reflect what the Atlanta Fed's poll of real estate contacts reported throughout 2011. This trend continued in January. The majority of Florida participants was positive on sales and remained optimistic that sales growth would continue. That sentiment does not mean that the state's real estate sector has recovered, but our information and that gathered by Florida Realtors show that a recovery is under way.
By Mike Chriszt, an assistant vice president in the Atlanta Fed's research department
February 7, 2012 in Florida, Housing | Permalink
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10/31/2011
Southeastern housing update: Atlanta Fed polls show sales mixed in September
Reports from southeastern housing contacts were mixed in September. Builders indicated that new home sales slowed notably, falling below the year-earlier level in September. Meanwhile, brokers reported that sales growth improved in September, with nearly two-thirds reporting gains. However, most described gains as modest.
More than two-thirds of southeastern builders reported that home inventories were below the year-earlier level in September, while close to half of brokers reported declines. By most broker accounts, September inventories were flat to slightly below August levels, while nearly half of builders described declining inventories over the period.
Reports from throughout the region confirm significant declines in home inventories on a year-over-year basis and more modest declines from August to September (see the table).
Home Inventory Changes, September 2011 |
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Market |
Year/Year |
Month/Month |
Source |
Alabama |
–11.0% | –2.1% | Alabama Center for Real Estate |
Jacksonville, FL |
–14.5% | –1.4% | Northeast Florida Realtors Association |
Knoxville, TN |
–16.9% | –14.3% | Knoxville Area Realtors Association |
Orlando, FL |
–39.3% | –1.2% | Orlando Regional Realtors Association |
Nashville, TN |
–12.7% | –3.5% | Greater Nashville Association of Realtors |
Tampa, FL |
–40.3% | –8.7% | Greater Tampa Association of Realtors |
Despite fewer available homes for sale, contacts continued to report downward pressure on home prices in the region. More than half of southeastern builders and brokers reported declining home prices in September.
Southeastern builders reported a sharp drop-off in buyer traffic in September on a year-over-year basis, while brokers noted a small improvement.
On balance, the outlook in September was little changed from August reports. However, the outlook among Florida brokers remained slightly positive but continued to weaken from its recent peak this past spring.
Note: August poll results are based on responses from 70 residential brokers and 35 homebuilders and were collected October 3–13, 2011. 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
October 31, 2011 in Housing | Permalink
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09/26/2011
Southeastern housing update: Polls show sales ahead of weak levels in 2010
Reports from the Atlanta Fed’s southeastern housing contacts indicated that home sales growth remained slightly ahead of weak levels a year earlier in August while the outlook for sales and construction activity picked up slightly.
Florida brokers reported that home sales growth slowed notably in August; less than half reported sales gains compared with more than half in July. Outside of Florida, southeastern brokers noted a modest pick-up in sales growth.
We have been hearing for some time that cash buyers were major players in the southeastern housing market, so we asked brokers about these cash buyers. According to our sources, investors, second-home buyers, international buyers, and retirees are purchasing with cash. Our sources also note that investors dominate cash purchases across most of the Southeast. These anecdotal reports appear to line up with available data. The National Association of Realtors reported that cash buyers accounted for 29 percent of August home sales and 22 percent of total sales while the organization noted that investors accounted for the bulk of cash purchases. The Orlando Regional Realtors Association reported that cash sales accounted for 50 percent of August home sales. Knoxville Area Association of Realtors data indicated that cash purchases accounted for 25 percent of sales in August.
More than half of southeastern builders reported that home inventories were below the year-earlier level in August while close to half of brokers reported declines. Brokers indicated that August inventories were similar to July, while builders indicated declining inventories over the period.
Just over half of Southeastern builders continued to report declining home prices in August while fewer brokers reported declines than they have in recent months.
Southeastern brokers and builders reported that buyer traffic slowed in August on a year-over-year basis, but the outlook for sales growth improved slightly over weak results last year.
Note: August poll results are based on responses from 82 residential brokers and 44 homebuilders and were collected September 6–14, 2011. 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
September 26, 2011 in Housing | Permalink
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08/19/2011
Southeastern housing update: Polls show improved July sales, weakened outlook
Reports from southeastern housing contacts indicated that sales growth rebounded modestly in July while the outlook for sales and construction activity weakened notably.
Reports from southeastern builders and residential brokers indicated that sales in July were flat to slightly up compared with a year earlier. The most positive reports continued to come from Florida residential brokers.
The majority of southeastern contacts reported that housing inventories remained below the year-earlier level in July.
The Orlando Regional Realtors Association reported that housing inventories continued to decline in July from earlier in the year and compared with a year earlier. They reported that total housing inventory was down 38 percent from July of last year; single family home inventory was down 33 percent while condo inventory was down 53 percent.
Reports from the Northeast Florida Realtors Association also show declining home inventories in July. Inventory declined 6 percent from June to July and was 31 percent below the year-earlier level.
July 2011 data from Greater Nashville Association of Realtors indicated reduced inventory levels as well. Residential inventories declined 8 percent from a year earlier, and condominium inventories declined 18 percent.
Brokers and builders continued to report downward pressure on home prices. Just over half of Southeastern builders and brokers reported that home prices were below the year-earlier level in July.
The outlook among Southeastern brokers and builders dropped sharply in July. More than half of brokers reported that they anticipate sales growth will decline over the next several months. The outlook from builders weakened as well. More than half of builders anticipate new home sales will be flat over the next several months. In June, most builders' expectations for growth were flat to slightly up.
Note: July poll results are based on responses from 78 residential brokers and 39 homebuilders and were collected August 1–10, 2011. 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
August 19, 2011 in Housing | Permalink
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07/19/2011
Southeast housing update: Atlanta Fed polls show softening home sales in June
Reports from Southeast housing contacts indicated that activity in the region softened somewhat in June on a year-over-year basis.
However, the majority of Florida brokers continued to report year-over-year gains.
We asked brokers to let us know what was preventing buyers in the Southeast from purchasing a home during the first half of 2011. Brokers' most common response was the inability of buyers to qualify for financing, followed closely by the buyers' inability sell their current home. Slow response from banks came in third, and Florida brokers reported this slow response was the chief obstacle to home purchase.
We then asked brokers which obstacles to buying a home had been the most problematic for buyers. Southeastern brokers clearly reported that the inability of buyers to sell their current home was most problematic.
However, a look at Florida brokers' responses indicated that the buyers' inability to sell their current home along with slow response from banks was hindering sales.
Southeastern builders reported that construction activity was similar to weak levels a year earlier while the outlook improved a bit.
In June we revisited questions on home improvement construction that we posed at the end of the first quarter. The majority of builders reported that home improvement construction exceeded the year-earlier level, an improvement over first-quarter activity. The outlook also improved from earlier in the year as well.
However, builders indicated that it remained difficult to pass along cost increases in the home improvement work they were bidding.
Southeastern brokers indicated that buyer traffic remained positive in June on a year-over-year basis while builders noted buyer interest was similar to a year earlier.
Note: June poll results are based on responses from 82 residential brokers and 37 homebuilders and were collected July 5–13, 2011.
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
July 19, 2011 in Housing | Permalink
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06/24/2011
Southeast housing update: Polls show Florida sees improved May home sales
A first glance of recent reports from southeastern housing contacts indicates that activity in the region improved on a year-over-year basis. The majority of builders reported that sales in May were flat to slightly up compared with a year earlier, and close to half of brokers reported sales increased.
However, the May new home sales increase is over weak levels a year earlier; builders' comments indicate that sales remain at low levels. Southeastern broker reports may be a tad misleading as well. Reports from Florida brokers continued to be more upbeat than reports from other brokers in the region. As noted in last month's update, Florida contacts reported that cash sales of distressed homes continued to drive activity.
Actually, sales activity in Florida aside, sales in the region appear to be more in line with recent national trends; the majority of brokers outside of Florida reported that sales in May were below the year-earlier level. Additionally, many noted that comparisons were expected to be down compared with last spring's sales when the federal housing stimulus was in play.
Most southeastern contacts reported that home inventory levels were flat to down compared with a year earlier. The majority of Florida brokers reported that inventories were down from a year earlier. A Jacksonville broker reported, "When a home comes on the market in our area that is priced at a great value, we are seeing multiple offers on a regular basis. We have actually seen some foreclosures with multiple offers sell for more than list price. There are fewer homes to show buyers especially in some of the better neighborhoods."
Contacts indicated more modest year-over-year home price declines in May.
Looking ahead, most southeastern contacts anticipate home sales growth will weaken over the next several months.
Note: May poll results are based on responses from 89 residential brokers and 38 homebuilders and were collected June 6–15, 2011. 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
June 24, 2011 in Housing | Permalink
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06/07/2011
Regional housing activity remains in the doldrums
The decline in real estate activity is a significant contributor to the depth of the economic downturn here in the Southeast, and it is also a big part of why our national recovery has been slow. Dennis P. Lockhart, president and chief executive officer of the Federal Reserve Bank of Atlanta, spoke to the National Funding Association's Council for Quality Growth in Atlanta in mid-May. The title of his remarks was "Real Estate and the Economic Recovery." With regard to the national picture, President Lockhart commented that
"The residential real estate market remains depressed. In my baseline forecast, the housing sector will contribute only modestly at best to economic growth this year and next."
The same can be said for housing's contribution to economic activity in the region as well. The theme regionally continues to be that housing is stabilizing at very low levels. Whitney Mancuso noted this in her May 17 SouthPoint post.
Looking again at President Lockhart's remarks, he noted that
"Home sales have not shown any clear trend of improvement since the end of the recession, except for a short pick-up during the period of the federal tax credit last year."
Looking at home sales in the states that have experienced the largest decline in housing activity—Florida and Georgia—the national picture is quite similar. Some areas of Florida have experienced a renewed upward trend in sales, and the chart below reflects this uptick. However, it is important to recognize that our Florida contacts in the real estate sector have told us that this is being driven largely by sales of distressed properties and by investors making block purchases of condos, in many cases with cash. Therefore, we hesitate to conclude that a sustainable recovery in home sales is under way.
With regard to home prices, President Lockhart said that
"S&P/Case-Shiller data show that home prices are down more than 30 percent from their peak. While prices appeared to stabilize in 2009 and 2010, today prices appear to be under renewed pressure from the increasing supply of distressed properties that are selling at a deep discount."
The next chart shows that home prices in Miami and Tampa, two Florida metro areas that are components of the national S&P/Case-Shiller Index, are down much more than the national measure—50 percent in Miami and 46 percent in Tampa. They are down 26 percent in Atlanta, the only other southeastern metro area in the national composite measure. Importantly, as President Lockhart noted, prices have been drifting lower recently, although not at the pace of decline seen in 2007 and 2008. Nonetheless, we do not see a recovery in home prices in the Southeast to date.
Weak sales and drifting prices have resulted in a very slow pace of new construction activity in the region. The last chart shows that permits for new residential construction remain at historically low levels. Reflecting this data, our most recent survey of homebuilders noted that more than half of builders reported that sales and construction were down from weak levels a year earlier.
President Lockhart concluded his remarks by noting that
"Because of the factors I've discussed, I do not expect significant new residential construction nationally. Thus, it's unlikely that residential real estate will directly contribute much to GDP growth this year or next."
Unfortunately, the same can be said for the region's real estate outlook.
By Mike Chriszt, an assistant vice president in the Atlanta Fed's research
department
June 7, 2011 in Housing, Outlook, Real Estate | Permalink
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Posted by:
ryan homes |
11/01/2011 at 09:59 PM
05/17/2011
Southeast housing update: Polls show existing home sales softened in April
As noted in Atlanta Fed President Dennis Lockhart's speech last week, "The housing sector impacts economic growth in two basic ways—one direct and one indirect." Because of its importance we continue to closely monitor developments in our region.
Last week, the National Association of Realtors released first quarter 2011 existing home sales numbers by state, confirming brokers' recent reports on sales activity in the Southeast. Sales in the Southeast increased 4 percent during the first quarter compared with a year earlier. Sales were boosted by strong sales gains in Florida, up 17 percent, while declines in the remainder of the region moderated. Nationally, sales over the same period were down nearly 1 percent, an improvement following a 21 percent year-over-year decline during the fourth quarter.
The Federal Reserve of Atlanta's most recent monthly poll of regional residential real estate brokers indicated sales weakened across the region on a year-over-year basis in April; however, the majority of Florida brokers continued to report gains. Once again, Florida contacts report distressed sales, with cash buyers driving the market.
Southeastern home builders continued to report that new home sales and construction remained at anemic levels in April. More than half of builders reported that sales and construction were down from weak levels a year earlier. Interestingly, half of the Alabama builders we contacted did not respond to our questionnaire, presumably the result of the recent damage sustained by the tornadoes that hit the state on April 27.
Despite slightly weaker sales reports in April, contacts did indicate that home inventory levels eased somewhat on a year-over-year basis. The Orlando Regional Realtors Association reported that available inventory in its MSA continued to decline in April as well. It reported the number of new listings continued to steadily decline, also noting that the Orlando market had a 4.8-month supply of homes in inventory. The Greater Nashville Association of Realtors reported that inventory was down slightly in April from a year earlier, and months' supply continued to move more toward a balanced market.
Southeastern brokers indicated that home price declines eased in April. Reports from builders, meanwhile, indicated new home prices were little changed, with most continuing to report declines.
Southeastern brokers reported stronger buyer traffic in April while builders continued to note that buyer interest weakened.
Note: April poll results are based on responses from 86 residential brokers and 35 homebuilders and were collected May 2–11, 2011. 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
May 17, 2011 in Housing | Permalink
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04/20/2011
Southeast housing update: Polls show existing home sales improve; new home building remains sluggish
The Atlanta Fed's monthly poll of regional residential real estate brokers and home builders indicated sales were mixed in March. Southeastern builders reported that new home sales growth weakened notably in March. More than half said that new home sales declined compared with a year earlier. Reports from southeastern brokers indicated that sales growth improved in March, with half reporting sales increases from a year earlier.
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However, gains reported by Florida brokers largely drove improvements in the Southeast. More than two-thirds of Florida brokers reported sales increases in March on a year-over-year basis. Many Florida brokers reported that distressed sales and cash sales continued to drive sales in many parts of the state, a situation confirmed by recent reports: The Orlando Regional Realtors Association reported that 71 percent of home sales in March were short sales or foreclosures and 54 percent of transactions were cash.
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Both builders and brokers continued to report their growing frustration with their access to financing. Most builders and brokers' complaints focused on bankers and regulators who they felt needed to reevaluate stricter lending guidelines that were shutting out many buyers and giving preference to cash buyers.
Southeastern builders reported that construction activity weakened notably in March on a year-over-year basis, and the outlook softened as well. However, these comparisons are made against last year’s slight bump in activity, which was associated with the federal housing stimulus.
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In recent months some regional builders have reported anecdotally they were doing more home improvement work, so in our March poll we asked our panel about recent activity. Southeastern home builders seemed to indicate that home improvement construction activity in the first quarter was about even with a year earlier. However, builders anticipate improvements in the second quarter, with more than half expecting an increase.
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Similarly, builders have reported persistent rising material prices, accompanied with downward pressure on new home prices. So builders were asked if they have been able to effectively pass along cost increases in the home improvement work they have bid. It appears most builders are unable to pass along rising material costs.
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Similar to reports on sales, the outlook for southeastern brokers continued to improve while builders anticipate new home sales to soften on a year-over-year basis.
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Note: March poll results are based on responses from 91 residential brokers and 43 homebuilders and were collected April 4–13, 2011. 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
April 20, 2011 in Construction, Housing | Permalink
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03/25/2011
Southeast housing update: Polls show home sales soften in February, but outlook improving
The Federal Reserve of Atlanta's monthly poll of regional residential real estate brokers indicated that home sales growth softened in February, similar to the year-earlier level. Southeast home sales growth was slightly positive in February while the National Association Realtors (NAR) reported that, nationally, existing home sales declined slightly, down 2.8 percent from a year ago.
In the Southeast, the positive trend in home sales continued to be driven largely by reports from Florida brokers while brokers elsewhere in the region indicated sales remained below the year-earlier level and were slightly weaker than in our January report.
According to reports from Southeast home builders, new home sales growth was unchanged from January and remained below the year-earlier level. However, reports from Florida and Georgia builders indicated that sales growth weakened in February while elsewhere in the region sales were similar to year-earlier levels:
Southeast builders reported that construction activity remained below the year-earlier level in February. Several brokers and builders from across the region complained that residential construction financing was unavailable. Some noted that much of the activity was limited to remodeling work for homeowners and banks who were rehabbing foreclosure properties. However, the southeastern outlook for construction activity growth over the next several months improved again in February, turning slightly positive.
Reports from Southeast contacts indicated that home inventories eased in February on a year-over-year basis. CalculatedRisk also noted that existing home inventories edged down nationally in February based on NAR figures. Several brokers across the region noted that the number and speed of foreclosures coming to market had slowed. Contacts indicate that rental property is in greater demand as many who have been displaced by foreclosures look for housing. A Tennessee broker noted that transferees preferred renting to buying.
Despite comparisons with sales last spring boosted by the federal housing stimulus, the outlook for sales growth over the next several months continued to improve, according to both builders and brokers. However, improvement among brokers was largely driven by Florida contacts while builders' improved expectations were more broadly based across the region.
Note: February poll results are based on responses from 90 residential brokers and 47 homebuilders and were collected March 7–16, 2011.
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
March 25, 2011 in Housing | Permalink
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Sadly, this is a sign of the times. I don't expect any bullish recovery in the next decade, considering what real estate have dug themselves into.