The housing market is hesitantly moving into the fall homebuying season, and so far, the results don't look too promising.
And the one outlier, Texas, is still reporting less-robust demand conditions.
Buyer traffic pulled back in September ,with the buyer traffic index falling to 30 from 35 in August.
According to the latest Credit Suisse [CS] monthly survey of real estate agents, “Agents comments are now squarely focused on buyer resistance to current home price levels, and that many buyers have shifted from a negotiation mindset toward a willingness to sit on the sidelines and wait for lower prices."
“The resistance of buyers to higher home prices was broad-based with comments from agents suggesting that affordability and the future trajectory of home prices was a particularly large part of conversations with buyers,” the report continued.
Here is how the top 5 markets are doing in the country, and the news is not all positive.
Phoenix, Arizona – 5th
As the fifth-largest market, Phoenix remains at depressed levels in September and is not too far off July and August levels. According to agents in the area, demand is challenged amid lackluster job growth. Meanwhile, agents noted that more people are moving out of the area than into it, and most sellers have their homes overpriced and are reluctant to drop price.
Click to enlarge
(Source: Credit Suisse)
Washington, D.C. – 4th
Washington D.C.’s market hit the lowest level in eight years due to a lack of buyer urgency and stubborn job growth stunting the market, with the traffic index falling to 12 from 25 in August. Agents commented that buyers seem to be in no rush and believe interest rates will remain at low levels for a while.
Click to enlarge
(Source: Credit Suisse)
Atlanta, Georgia – 3rd
Even as the third-largest market in the country, Atlanta witnessed a tough month in September, with the buyer traffic index plummeting to a reading of 14 from 40 in August, indicating traffic is well below expectations. A lot of the buyers' caution is being attributed to lack of quality inventory, making shoppers wait. “To purchase a house you have to have confidence in the future and the buyers are very uncertain about the future,” agents said.
Click to enlarge
(Source: Credit Suisse)
Dallas, Texas – 2
Dallas’ market is going strong, moving back to levels that were in-line with agent expectations in September, as indicated by a 50 reading for the traffic index. This is only one of three markets that hit expectations. Agents said there are “more buyers since the spring of 2014 but inventory remains low. Relying on new builds much of the time but even that inventory is low.”
Click to enlarge
(Source: Credit Suisse)
Houston, Texas – 1
Although Houston agents indicated that relocation activity slowed down in September, it was off of August’s very strong levels, and buyers have grown increasingly picky after strong home-price gains. Houston’s buyer traffic index slipped to 33 in September from 50 in August. And the good news: agents said the market is returning to a more normal state after more than three years of price spiking and sizzling sales.
Click to enlarge
(Source: Credit Suisse)
