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: http://www.realtor.org/reports/realtors-confidence-index.
The selected comments reflect the general sentiment expressed by REALTORS® who participated in the October 2012 survey, conducted during October 22 through November 5, 2012. All real estate is local and conditions in specific markets may vary from the national trend.
REALTORS® continue to report that unrealistically low appraisal values continue to jeopardize sales. Appraisal values are in some cases affected by REOs which in some cases are reported as being used as comparable properties. In other cases, appraisals are reported as not keeping up with the market. Also, there continue to be reports of appraisers having poor knowledge of local conditions as they come from outside areas (in some cases as far as 100 miles according to one REALTOR®).
- “Appraisals and BPO values are likely low because of the sort of comps that are available on the market. REO properties and lower value sales comprise the bulk of market activity which in turn leads to low appraisal and BPO values.”
- “Appraisals are definitely a problem. We are in a Vacation, second home area and we are getting appraisers from 100′s of miles away to appraise Lake Property. They don’t understand the values.”
- “Buyers are coming in with cash to close the gap between low appraisals and sellers sticking to their house price.”
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.
According to the latest REALTORS® Confidence Index survey, a significant number of respondents continued to report problems associated with appraisals, resulting in cancelled, delayed, or negotiated to a lower price problems. Comments from REALTORS® indicated frustration in some cases with the use of appraisers who have limited experience in specific geographic areas.