On April 30, 2010, home buyers and sellers rushed to get contracts signed to take advantage of the latest and perhaps final round of housing stimulus. The same buyers have until June 30, 2010, to complete the purchase.
The Federal Reserve of Atlanta conducts a monthly survey of Realtors and homebuilders in its region. The May results are in and indicate that existing home sales growth continued to rise on a year-over-year basis as sales that went under contract prior to June 1 continued to close. (May survey results are based on responses from 92 Realtors and 49 homebuilders and were collected June 1–10.)
However, reports from Realtors on a month-to-month basis indicate May existing sales were only slightly ahead of April. Southeastern homebuilders indicated that new home sales continued to soften in May and fell below year-earlier levels.
However, Southeastern builders reported that construction activity actually strengthened somewhat, up slightly from a year earlier.
Buyer traffic eased on a year-over-year basis according to Southeastern Realtors, while builders continued to note a pullback in traffic that began in March. However, Florida builders ran counter to the trend, indicating a slight improvement in buyer traffic. Overall, buyer traffic in the Southeast remained above the year-earlier level.
Total home inventories have risen in recent months, and in May Realtors indicated that the trend continued with inventories exceeding the year-earlier level. New home inventories remained well below year-earlier levels and were steady on a year-over-year basis.
Builders continued to report downward pressure on home prices and the difficulty they faced competing with bank-owned properties. However, survey results indicated price declines were little changed among builders while existing home price growth softened notably in May, based on Realtor reports.
The outlook among Southeastern real estate contacts weakened notably in May. Builders and Realtors reported that access to financing for both buyers and builders remained challenging. Many contacts noted that buyers remained uncertain and in a wait-and-see mode.
Note: The housing survey'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 analyst in the Atlanta Fed's research department