For the third consecutive month, the diffusion index for foot traffic held roughly steady. This plateau follows a sharp mid-summer decline in the wake of a 1% increase in mortgage rates. Rates eased in October, but crept upward in late November, which could weigh on future trends.
Every month SentriLock, LLC. provides NAR Research with data on the number of properties shown by a REALTOR®. Foot traffic has a strong correlation with future contracts and home sales, so it can be viewed as a peek ahead at sales trends two to three months into the future. For the month of November, the diffusion index for foot traffic eased 2.5 points to 48.1.
Mortgage rates started the month low, but ticked upward in the later part of November on positive economic news and anticipation of a potential taper of asset purchases by the Federal Reserve. However, foot traffic held relatively steady for the 3rd consecutive month. Inventories remain tight in some markets like San Diego, which would constrain an increase in local foot traffic. But several markets across the Midwest have slowed relative to last year. Markets that continue to expand are doing so modestly.
The index eased just under the “50” mark in November which indicates that more than half of the markets in this panel had stronger foot traffic in November of 2013 than the same month a year earlier. This reading does not suggest how much of a decrease in traffic there was, just that the majority of markets experienced less foot traffic in November of 2013 compared to a year earlier.
The post-rate-spike recovery appears to have taken root. However, rates did ease in October and early November. Still, traffic remained strong despite the disruption of the government shutdown. Rates have since increased closer to 4.5% which could weigh on traffic in the coming months if the increases continue.
Twenty-nine percent of respondents to the October 2013 REALTOR® Confidence Index Survey reported that the government shutdown had a temporary effect on ongoing transactions. Other data indicated that the shutdown also apparently impacted buyer confidence to some degree for future transactions. Overall the impact was noticeable but somewhat lower than feared.
The REALTOR® Confidence Index (RCI) for current market conditions continued to drop in October across all property types. An index of 50 marks “moderate” conditions . About 3,500 REALTORS® responded to the October survey: October REALTORS® Confidence Index Survey
A variety of factors were reported as negatively affecting confidence: impacts of the government shutdown, increases in mortgage rates, tight housing inventories, and the impending increase in home flood insurance rates.
 To assess their confidence about current conditions, REALTORS® were asked: “How would you describe the market where you make most of your sales? Concerning their expectations for the next six months, they were asked “What are your expectations for the housing market over the next 6 months where you make most of your sales?”An index of 50 delineates “moderate” conditions and indicates a balance of respondents having “weak”(index=0) and “strong” (index=100) expectations. The index is not adjusted for seasonality effects.
- Earlier today we took a look at labor productivity. REALTORS® on average are very productive, and labor productivity across the board has long term ramifications on homebuyers’ purchasing power.
- In 2012, the typical agent had 12 residential transaction sides—an increase from 10 transaction sides in 2011 and eight in 2010.
- Additionally, 26 percent of members reported having at least one commercial transaction side. Members who are residential specialists typically had a total of 12 transaction sides overall compared to commercial specialists who typically had a total of 10 transaction sides overall.
- REALTORS® with two years of experience or less had a median of four transactions, compared to brokerage specialists with 16 years of experience or more who had a median of 13 transactions.
- The typical member had one transaction side involving a short sale and one transaction involving a foreclosure.
- REALTORS® are hard working. The typical REALTOR® worked 40 hours per week in 2012, a trend that has continued for several years. Managers and appraisers reported working the most hours, at 50 per week. All other members reported working 40 hours per week.
- The median age of REALTORS® continued its climb since 2007, and is now 57-years-old. In past years, median age hovered around 52.
- The incremental increase in age may be attributed to professionals staying in real estate longer and putting off retirement.
- Forty-one percent of REALTORS® are more than 60 years old, while only 2 percent are under 30 years old.
- Those who function as brokers and managers without selling tend to be the oldest.
- For more information on the 2013 Member Profile, visit http://www.realtor.org/reports/member-profile