It comes as no surprise to those in the real estate industry that there is a seasonal pattern to home sales data. This concept is also easily understood by those outside of the industry who can picture families with school-age children preferring to purchase homes and move in the summer flooding the market during those months so as to avoid disruption to education. It is also easy to picture singles, young couples, or empty nesters remaining in the market regardless of the season. While there are undoubtedly other potential explanations behind the seasonal pattern in home sales, one does not need to understand all of the possible drivers of a seasonal pattern to understand that it exists.
Realtor® comments and replies this month to the January 2012 survey for the REALTORS® Confidence Index indicate favorable market developments but also continued concern with issues related to lending and appraisals: http://www.realtor.org/research/research/reps.
- REALTOR® confidence in the outlook for the housing markets over the next 6 months has increased significantly.
- Higher prices expected in the next year by 67 percent of Realtors®
- A number of respondents commented on the upswing in buyer activity, multiple bids in a number of transactions, lower inventories of available homes, and substantially increased buyer activity in lower priced properties.
Realtors® continued to report, however, that a number of problems continue to present major challenges:
- Problems with the appraisal process were prominent among the complaints, with concerns over the selection of comps, lack of appraiser qualifications in many cases, and length of time to complete an appraisal.
- Problems confronting potential buyers in obtaining a mortgage included unrealistically tight underwriting processes, a lack of customer service and responsiveness by banks, excessive documentation required in the lending process, and in some cases generally bad attitudes by banking personnel.
- Concern over the ability to finance condos focused on obtaining FHA approvals, given mortgage and homeowner association delinquencies.
- Bargain hunters and low-ball offers continue, but to a lesser degree than previously.
- A number of respondents noted that the overall jobs and economic situation continues to have a major, negative impact on the residential markets.
In conclusion, the results from this month’s survey are positive: confidence in the outlook is up. However, the recovery is slow, and the Appraisal and Lending issues—although evincing some improvement—are still a major concern.