If you want to know the housing outlook for Atlanta, Nashville, New Orleans, or other cities in the Southeast, just ask Domonic Purviance. He'll tell you what you need to know and more.
Purviance, a senior financial specialist in the Federal Reserve Bank of Atlanta's Supervision, Regulation, and Credit Division, studies residential real estate markets looking for vulnerabilities that could signal challenges to come. He develops analytics that crunch statistics on measures such as housing inventories and foreclosures to observe evolving real estate conditions. His work helps assess risks associated with housing and its potential effect on the financial sector.
"I feel I have a mission and a cause," said Purviance, who arrived at the Bank eight years ago. "Working at the Fed is my way of having a small impact on the world."
Building a better toolkit
Over several years, he developed an application to help identify risks to a bank based on the real estate conditions in its lending area. Purviance and his colleagues eventually incorporated mapping capabilities into the tool, allowing them to gauge the health of the housing market nationwide.
The Atlanta Fed's Domonic Purviance. Photo by David Fine
Such deep knowledge of housing markets is valuable to Purviance's colleagues in Supervision, Regulation, and Credit who audit banks across the Southeast to make sure they are financially stable and operate safely and ethically, said Carl Hudson, director of the Atlanta Fed's Center for Real Estate Analytics. Hudson hired Purviance in 2010.
"Domonic's work helps examiners ask better questions and have a more critical eye of a bank's situation," Hudson added. "A bank in South Florida is going to be different than a bank in East Tennessee or South Georgia."
Tools that illuminate potential trouble spots for banks based on where they lend can give financial experts a different way of looking at markets, Purviance said. "To me, that's a game changer that could affect millions of people."
A longstanding desire to improve circumstances
Growing up in Baltimore at a time when the economy was failing, taxes were high, and crime was escalating, Purviance had a desire to make cities better. He majored in urban planning at Morehouse College in Atlanta and earned a master's degree in city and regional planning from the Georgia Institute of Technology. After graduate school, he went to work for a property developer on Atlanta's north side and learned "some slick ways of understanding real estate that I still apply today," he said.
Before joining the Federal Reserve, Purviance dabbled in entrepreneurship as the president of Market Advisory Services LLC, a consulting firm that assists in property valuations. At Metrostudy, a residential real estate research company, he supervised consulting operations in the Atlanta region and put together a market study of the condominium portion of the Terminus mixed-use development in Atlanta's Buckhead neighborhood.
In addition to assessing housing market risks, community outreach occupies a considerable portion of Purviance's workday. His many contacts in residential real estate help keep him informed, as do his frequent speaking engagements around the country. Over the years, Purviance has been quoted in real estate articles appearing in metro Atlanta newspapers as well as the New York Times.
The public outreach on real estate is important because most people don't understand the extent to which the Fed seeks to detect threats to banks and the U.S. financial system, Purviance said. "If we see risks or dangers that could potentially impact the economy, it's beneficial for us to have a platform to share our perspective," he noted.
Heightened attention to affordability
In recent public presentations, Purviance has been discussing potential risks to housing affordability, which he likens to an oncoming train whose whistle can't yet be heard.
He explains that in recent years, the focal point for new home construction has shifted upward to prices of $250,000 or more, primarily because of rising costs for labor and land development. Construction restrictions from city and county governments have added to the costs of homebuilding, he said.
At the same time, structural changes in housing are keeping upward pressure on home prices, Purviance added. For example, the wave of mortgage refinancing in recent years allowed homeowners to secure lower rates. As a result, would-be sellers prefer to remain in their homes rather than pay more for another residence, leading to a diminished housing supply, he said. "Home prices can go up only so far before people can't afford to buy," Purviance said.
Away from the office, Purviance seeks to make an impact through his participation in a different kind of community outreach. Inspired by an uncle who was a preacher, Purviance is currently working on a master's degree in Christian leadership and wants to publish a book he's written on life lessons.
"I've always wanted to do ministry," Purviance said. "That is the lens through which I see the world."
Karen Jacobs
Staff writer for Economy Matters