Real Estate Markets Continue to Recover

The Realtors® Confidence Index report provides monthly indicators on current real estate market conditions and the outlook for the residential real estate markets.  The report summarizes information pertaining to Realtor® confidence, price trends and expectations, buyer/seller traffic, buyer profiles, and issues affecting real estate.  The June edition is based on responses of over 3,400 Realtors® to a survey conducted for the time period June 25 –July 3, 2012.[1] Given that all real estate is local, conditions in specific markets may vary from the overall national trends presented in this report.

Respondents’ comments generally indicated expectations of continued market recovery:

  • Realtor® confidence about current market conditions for all types of residential property was sustained in June after a rapid buildup earlier in the year.  The RCI-SF(single family) current index is at 57.9. The levels of confidence in the real estate markets for townhouses and condominiums is weaker, but the indexes are trending up, which indicates that an increasing  proportion of Realtors® have moderate to strong expectations.  An index of 50 reflects a medium level of confidence.

  • Prices continue to firm up with 64 percent of Realtors® reporting constant or increasing prices compared to the same time a year ago.
  • Looking forward, 84 percent of Realtors® expected constant or rising prices in the forthcoming year.
  • There is strong buyer interest but not enough listings: buyer demand is reported to be growing faster than supply, and many respondents are reporting multiple offers. The buyer traffic index is at 60.01, with the seller traffic index at 41.22.
  • The percentage of Realtor respondents reporting distressed  (foreclosed and short sales) sales was stable at 25 percent, compared to approximately 33 percent a year ago.

A lack of inventory for sale, major problems in obtaining mortgages on a timely basis, and appraisals that do not capture the current state of the market were reported as having a negative impact on the housing recovery.

[1] There were 3,415 respondents to the June survey.

Jed Smith, Managing Director, Quantitative Research

Jed Smith is Managing Director, Quantitative Research with the National Association of Realtors®. He has worked on real estate issues for the past 20 years, providing input on a variety of housing, commercial real estate, tax, and planning issues. Recently he has been involved in several international studies.

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  1. How come purchase applications are down year over year when mortgage rates are more than 1% lower?

    Please don’t tell me lending standards are too tight.

    FHA, all you need is a 620 Fico Score, 3.5% down payment, and verified income to show you have the capacity to pay the debt back?

    Is the NAR concerned that renter nation has started since all the major players in housing Freddie, Fannie, home builders and banks all came out with rental themes in 2012?

  2. Patrick Brennan

    As a participant in the study, I’m not sure I understand it entirely. We are asked whether “conditions” are favorable or unfavorable (or something to that extent), and whether our outlook is for better or worse conditions. In my opinion, rising prices and tight/stable credit is not an overall good thing for our market — but for different reasons than if prices and credit were both spiraling out of control or both plummeting. Maybe it’s just that I’m in a historically volatile market (Phoenix), but I think we would prefer to see pricing and credit stabilize so that homebuyers can buy and sellers can sell without too much stress or difficulty, i.e. liquidity without excessive volatility. Perhaps this is where we are headed in the next couple of months, but our current sellers market has been taxing on buyers to an undue extent. Likewise, it has created an environment ripe for dishonest dealings from a few of our less savory real estate professionals.