Orlando, FL – Economic Anxiety, Fiscal Cliff Uncertainty, Drive Traffic Lower In December
TrafficHome PricesIncentivesDecember Market Trends
“Buyers are concerned about the economy.”
(4,554 single-family permits in 2011, 12th largest market in the country)
Traffic slips on economic and political concerns.
Buyer traffic missed expectations again in December, as our traffic index fell to 36 from 42 in November, below a neutral reading of 50 (indicates lower than expected traffic for this time of year). Agents voiced buyers’ anxieties over the direction of the U.S. economy and concerns about taxes and the potential fallout from the fiscal cliff. This is similar to commentary from our November survey, in which agents also mentioned concerns about the fiscal cliff. One agent in December noted, “There is too much uncertainty and my buyers have been showing less confidence.” Another agent noted, “Concern over potential tax increases and higher unemployment is leading to lower traffic levels.” Agents also noted that lower inventories have worked to discourage some buyers, as they do not find the current selection of inventory appealing and find little reason to look for more properties. However, some agents did note steady demand from investors, while others noted that traditional buyers expressed interest in capitalizing on low interest rates.
Pricing moves higher in December.
Prices rose further in December, as our home price index came in at 80 (from 75 in November), with readings above 50 pointing to sequentially higher prices. This marks the region’s tenth consecutive month of higher prices. Meanwhile, inventory levels continued to trend lower in December, as our home listings index came in at 87 (from 75 in November), well above a neutral reading, signaling sequentially lower inventories. Meanwhile, agents pointed to a lower time needed to sell, as our index came in at 83 (from 67 in November), above a neutral reading of 50 (less time to sell). We view the lower inventories and time to sell as positives for future pricing.
Comments from real estate agents:
- “Investors have been supporting traffic. Traditional buyer traffic has been slow.”
- “We’ve seen some better interest from snowbirds.”