- Market confidence is strong in most areas of the country, according to NAR's Confidence Index survey.
- Tight supply and finance/lending issues were the leading factors for contracts terminations in July.
- Cash sales and distressed sales accounted for 21 percent and 5 percent of total sales, respectively.
If the National Association of Realtors Confidence Index survey is taken face value, Realtors could see the market as getting stronger — but one may draw a more tempered conclusion after reading further into the report.
According to NAR‘s survey, July’s market conditions and outlook were higher than they were in July 2015. However, they were lower than the previous month.
The survey was are based on responses of 3,454 Realtors. Of those responses, 2,190 closed a sale during the month (July) surveyed.
The index is rated out of 100. Any numbers over 50 mean Realtors view the market as strong in that category. Numbers below 50 mean Realtors view that portion of the market as weak.
Seller traffic was the only area Realtors see weakness.
“Very low supply, declining affordability, appraisal issues and lender processing delays were reported as the key issues affecting sales,” the report reads.
Confidence and outlook may vary
Alaska and Washington D.C. are polar opposites in regard to outlook. Whereas D.C.’s condo and townhome markets are thriving, Alaska isn’t exactly holding its breath. The same goes for single-family homes: Alaska and Connecticut are the only two states with weak outlooks over the next six months.
Realtor confidence outlook for single-family homes for the next six months.
The townhome market along the seven-state northern stretch from the Gulf of Mexico to Wisconsin is seen as weak. But California, Texas, New York, Florida and Maryland reported “strong” and “very strong” outlooks for the townhome market in the coming months.
Illinois Realtors’ surveys indicated outlook was weak for townhomes.
Realtor confidence outlook for townhomes for the next six months.
Distressed sales constituted just 5 percent of total sales in July, the report says, down 1 percent from June and two percent annually. As home prices have increased and foreclosures declined, distressed sales have steadily fallen. Following the housing crisis up to 2012, distressed sales accounted one third to half of all sales.
The report concludes that cash sales, similar to distressed sales, also declined. Of the 21 percent share of total homes bought with cash, only 7 percent were first-time home buyers. According to NAR, most cash buyers are in the second-home, investment and foreign purchaser demographics.
Partly due to tight inventory, 41 percent of homes sold at or above list price. Median home price increased 5 percent annually in July, and growth is expected to be around 3.3 percent by the end of the year, the report says. The survey predicts hot markets in Washington, Oregon and Colorado will continue, as all are expecting median price increases between 5 and 6 percent.
State expectations for median price growth.
California, Texas, New York and Washington D.C. are all expecting median price to increase by 3 to 4 percent.
Florida Realtors are collectively expecting median price to increase 4 to 5 percent, while Illinois’ median price change is expected to stay on par with the national average of around 3.6 percent.
