Builders’ sales managers responding to Wachovia’s monthly survey reported a sharp increase in January traffic at model centers. And some even reported an increase in sales.
Each month the investment bank surveys 150 home building sales managers in 20 markets throughout the U.S. It asks them about customer traffic, sales, and pricing trends.
Roughly half the sales managers reported that traffic was higher than expected, nearly double the number who reported that the month before. Only 10% of sales managers, many of them in the West, said that traffic was worse than expected. The sales managers tended to play down the surge in traffic as seasonal or only slightly better than seasonal.
“We conclude that while potential buyer interest level has accelerated, actual customers remain in ‘wait-and-see’ mode,” the report states.
The increase in traffic led to a halt in price cuts, which are pretty typical during winter months, the report concludes. Only 8% of the sales managers reported cutting prices, the first time since late 2007 that the metric had fallen below 10%.
The strongest results were recorded in the Southeast and Northeast; the weakest in the West. Midwest and Texas markets were mixed.
Commentary from the sales managers indicated that low mortgage rates drove much of the traffic.
“We have had the best month in a long time,” said one sales manager from Atlanta. “Sales are up. It’s starting to look good again.”
“Just when we felt we were down for the count—boom. Sales,” said a Raleigh/Durham, N.C., sales manager.
Boyce Thompson is the Editorial Director of Builder magazine.
Learn more about markets featured in this article: Durham, NC.