Market conditions vary across local markets, but the REALTORS® confidence and traffic indices indicate that overall market activity was unchanged in January 2016 compared to January 2015. Compared to December 2015, market activity slightly improved, according to the January 2016 REALTORS® Confidence Index Survey Report. There were some reports that the blizzard that hit the Mid-Atlantic and Northeast in January adversely affected listings and closings, but it was not nearly as disruptive as the blizzard in January 2015 which was later in the month and had a bigger effect on the data figures in the Northeast. Continued job creation and low interest rates are sustaining housing demand, but a lack of inventory and resulting price increases are weighing on sales and affordability.
First-time home buyers accounted for 32 percent of sales, up from 28 percent in January 2015. Purchases for investment purposes made up 17 percent of sales, while distressed properties were nine percent of sales. Respondents from New York and Florida, which follow a judicial foreclosure process that typically takes longer than a non-judicial process, reported an increase in distressed properties that are coming into the market. Cash sales accounted for 26 percent of sales. Properties were typically on the market 64 days nationally compared to 69 days a year ago, an indication that supply remains tight relative to demand. It typically took 42 days to close a sale, up from 36 days in July 2015 when NAR first started tracking this information.
Tight inventories, steep price increases, and lender processing delays were reported as the key issues affecting sales, especially to first-time homebuyers. Delayed and “below-market” appraisals were also reported to be causing transaction delays and cancellations.The collapse in oil prices is also a concern among REALTORS® in some oil-producing states such as Texas, Wyoming and Oklahoma. With spring and summer months coming, respondents were generally confident about the outlook for the next six months across all property types. Respondents typically expected prices to increase 3.4 percent.