Each month, the National Association of REALTORS® obtains up-to-date and on-the-ground incisive comments from REALTORS® who participate in the REALTORS® Confidence Index (RCI) survey. The RCI survey tracks expectations about overall market conditions, buyer/seller traffic, price, buyer profiles, and issues affecting real estate.
The selected comments reflect the general sentiment expressed by REALTORS® who participated in the October 2012, conducted during October 22 through November 5, 2012. All real estate is local and conditions in specific markets may vary from the national trend.
Tight Financing/Credit
REALTORS® reported that access to financing remains tight, so cash buyers, who are typically investors, are winning the bids against first-time homebuyers. There are reports that banks are asking for higher credit scores, with a report of a bank rejecting a score of as high as 800. It also appears that self-employment can be a problem in obtaining a mortgage. The mortgage application process continues to be deemed as too drawn out to the point of thwarting or jeopardizing the sale. There is also lack of assistance for helping current homeowners who are slightly delinquent to modify keep their homes.
- “Banks are ignoring settlement dates and can’t even give you a reason for a delay. There is no accountability on their end of the transaction. Three settlements in October were delayed due to lender issues.”
- “1st time buyers finding it difficult to qualify for loans”
- “I had two buyers with over 800 credit score and the bank would not loan. They ended up paying cash and looking for a loan after the closing.”
- “The lack of assistance from the mortgage companies for helping current home owners modifying their loan due to being underwater or slight delinquency to help them stay in their homes!!!!”
- “Cash buyers are winning bids. FHA buyers hardly have a chance.”
- “Concerned about purchases by investor groups – hundreds of homes purchased from Fannie/Freddie – basically no information forthcoming regarding this – concerned about what effect this will have long term in our area – are we going to have no “real” home owners for years to come? Not a good plan – list with realtors, to be purchased by home owner.”
The nation’s job market is slowly recovering. Slowly is the proper description when the one year percentage gain to October has been only 1.5 percent. However, some small-sized cities are moving at a very fast clip. Here are some examples of top flyers with at least four percent growth from one year ago. For some like Elkhart-Goshen it is only a recovery after a deep downturn and the market is still in a hole. For others like Lafayette, something amazing is going on as the employment has hit an all-time local high. And does anyone know what is going on in Pascagoula, where there are some strange ups and downs?
In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses jobless claims.
Each month, the National Association of REALTORS® obtains up-to-date and on-the-ground incisive comments from REALTORS® who participate in the REALTORS® Confidence Index (RCI) survey. The RCI survey tracks expectations about overall market conditions, buyer/seller traffic, price, buyer profiles, and issues affecting real estate, and can be found here.
The selected comments reflect the general sentiment expressed by REALTORS® who participated in the October 2012 survey, conducted from October 22 through November 5, 2012. All real estate is local and conditions in specific markets may vary from the national trend.
REALTORS® reported that the weak job market remains a major concern for buyers, especially given the dependence of credit scores on employment conditions. Policies that are seen to adversely affect the real estate market next year are the fiscal cliff and associated taxes and policies, and potentially regulations from the implementation of Dodd-Frank.
- “Job loss is still causing even the recent HARP homes to now start showing up in short sale and foreclosure market.”
- “Concerned with new Obama tax on sale of real estate. His new 3.5percent tax was slipped in under the guise of the Obama care health bill.”
- “The fear of sequestration is very real in Northern Virginia.”
- “The Dodd-Frank bill is causing chaos with buyers and sellers. Something has got to change!”
Big City Job Recovery
Some small towns have truly kicked into high gear by creating a sizable number of new jobs. The Cajun town of Lafayette, Louisiana, for example, ballooned from 150,000 jobs to now nearly 170,000 jobs in a short two year time span. But what about big cities? Because of the already sizable population, it is much more difficult to attain very high percentage gains as seen for some small towns. The New York metro region added 128,000 net new jobs in the past 12 months, yet matches only the national average growth rate of 1.5 percent. Below is the breakdown of job market conditions among those cities-suburbs that have at least 1.5 million jobs already. For most major cities, recent job gains are only making up for the losses that had occurred during the deep recession a few years ago. Washington, D.C. is one exception because it did not have a recession due to government stimulus money. But outside of the D.C. Beltway, there are two cities which are now setting new highs: Dallas and Houston. The intrastate jobs rivalry also implies why the Texans are a bit happier than the Cowboys.