realtors confidence index: november 2012 report

7/30/2019 Realtors Confidence Index: November 2012 Report

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REALTORS CONFIDENCE INDEXReport and Market Outlook

November 2012 Edition

Based on Data Collected November 26 through November 30, 2012

NATIONAL ASSOCIATION OF REALTORSResearch Department

Lawrence Yun, Senior Vice President and Chief Economist


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Table of Contents

SUMMARY.................................................................................................................................................. 3

Executive Summary--Current Conditions: Major Indicators................................................................... 3

Market Outlook......................................................................................................................................... 6

I. Market Conditions .................................................................................................................................... 8

REALTORS Confidence Index Is Up in November .............................................................................. 8

Seventythree Percent of REALTORS Reported Constant or Higher Prices on Recent Transactions

Compared to a Year Ago .......................................................................................................................... 9

Eighty-five Percent of Responding REALTORS Expect Constant or Higher Residential Prices in the

Next 12 Months....................................................................................................................................... 10

Thirty-Two Percent of Houses Sold in One Month ................................................................................ 11

Median Days on Market at 70 Days........................................................................................................ 12

II. Buyer and Seller Characteristics ............................................................................................................ 15

Cash Sales: 30 Percent of Residential Sales .......................................................................................... 15

Buyers Due to Relocation/Job Changes: 15 Percent of Residential Market ........................................... 16

Residential Sales to Investors: 19 Percent of Residential Market.......................................................... 17

Second Home Purchases: 12 Percent of Residential Market .................................................................. 18

International Transactions: Two Percent of Residential Market ............................................................. 18

Thirty-seven Percent of Sales with Mortgages Had Down Payments of 20 Percent or More ............... 19

Fifty-four Percent of Responding REALTORS Report Rising Rents for Residential Properties ........ 19III. Current Issues........................................................................................................................................ 20

Tight Credit Conditions and Slow Lending Process ............................................................................... 20

AppraisalsA Continuing Problem ....................................................................................................... 21

IV. Comments: Straight from the REALTORS ....................................................................................... 22

V. NAR Recent Articles ............................................................................................................................. 24

Small Town and Big City Job Recovery................................................................................................. 24

Neighborhood Choice ............................................................................................................................. 27

Overview of Foot Traffic Based on SentriLock...................................................................................... 28

Appendix. RCI Historical Data..29


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SUMMARY

Jed Smith and Gay Cororaton

TheREALTORS Confidence Index (RCI) report provides monthly informationpertaining to expectations about overall market conditions, buyer/seller traffic, price, buyer

profiles, and issues affecting real estate. Collection of this data began in January 2008 tosupplement information on existing home sales trends and provide timely feedback fromREALTORS on the real estate market (see the Data Appendix of this Report for the historicalseries).

The November edition is based on responses of about 3,700 REALTORS to a surveyconducted during November 26 through November 30, 2012.1 All real estate is local: conditionsin specific markets may vary from the overall national trends presented in this report.

Executive Summary--Current Conditions: Major Indicators

The current confidence index forsingle family homes held steady at 53,indicating that the market appears tohave stabilized. Activity issignificantly up from its level of 30 inthe same period last year. An indexof 50 means moderate expectations.The index for townhouses andcondominiums remains below 50,below moderate expecations buthigher than in the recent past (see the

Data Appendix for the historicalseries).

Activity is generally better compared to a year ago with generally more REALTORSholding above moderate expectations about both current conditions and the outlook forthe next 6 months. The majority of REALTORS continued to report rising home pricesand declining days on the market. However, REALTORS reported that the marketremains hampered by a demanding and rigid loan qualification process that has mademortgage underwriting a nightmare and the toughest hurdle. This has led to cashbuyers and investors easing out first time buyers using mortgage financing. Lowinventory persists, and REALTORS have reported homes selling above the list price.

Policy uncertainties on a variety of economic and and tax issues, as well as tepid jobgrowth , continue to dampen the market. Hurricane Sandy also caused a temporarymarket slowdown in the affected areas.

1There were 3,766 respondents to the November survey, which was sent to approximately 50,000

REALTORS.

The REALTORS Confidence Index -

Current Conditions for Single Family

Homes held steady at 53 in November,

unchanged from October but

significantly up from last years level of

32. An index above 50 indicates above

moderate expectations.


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Demand continutes to outstrip supply. The buyer traffic index is at 53, while the sellertraffic index is essentially unchanged at 37 from a peak of 42 last year. Buyer traffic dipped

slightly, reflecting in part the seasonal slowdown and possibly a wait-and -see stance asbuyers and sellers await clearer direction withregard to measures to avert the fiscal cliff.Inventory has been generally tight, asREALTORS reported that sellers continue tohold back, waiting for prices to rise further orfor better valued appraisals. REALTORSreported numerous cases of multibidding, withinvestors competing against first time homebuyers. REALTORS have reported thatbank-owned properties go under contract

within 7-10 days, that there are 8-10 offers forhouses that are turn-key ready, and that 85% of all REO properties have multiple offers.

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REALTORS Confidence Index--Nov 2012

Current Conditions

SF TH Condo

SF: 53 TH: 37 Condo 31

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Indexes of Buyer and Seller Traffic -- Nov 2012

Buyer Traffic Index Seller Traffic Index

Buyer: 53 Seller : 37

Demand outstrips supply:

the Traffic Buyers Index is at

53 while the Sellers Traffic

Index is at 37. An index of

50 indicates moderate

conditions .


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The tight inventory of homes for sale hasstrengthened prices and shortened listing time.There are reports that REO properties are selling

over the list price. About 73 percent ofREALTORS reported constant or increasing

prices compared to their average home transactiona year ago.

The median days on the market slightly fell to 70 days in November (70 in October) andis below last years 98 days.

54%58%

62% 64% 64%69% 71%

73% 73%

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Percentage of Respondents Reporting Constant or

Higher Prices Today Compared to a Year Ago

96 97 98 92101 96 98 99 99 97

9183

72 70 69 70 70 71 70

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Median Days on the Market for All Sales

Source: NAR, RCI Survey

About 73% of REALTORS

expect constant or increasing

prices. The median days on the

market is at 70 days.


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Market Outlook

REALTORS generally are upbeat about theoutlook for the next 6 months. The single familysales index rose to 59 and is up compared to October

(58) and a year ago (36) The six-Month OutlookConfidence Index for townhouses and condos alsoimproved although the expectation is somewhatlower.

NARs latest economic projection is for continued increases in residential home salesalong with continued price improvement (although sales and price trends will vary from marketto market). Existing home sales are projected to expand to 4.6 million in 2012 ( 5 million in2013).

The median price for existing home sales is forecasted at $176,100 in 2012 ($185,200 in2013). Shadow inventory is still high, but it is about 1 million fewer homes than two years agoand is anticipated to steadily diminish over time. Decreases in months of inventory of homes forsale and a decline in percentages of existing home sales that are distressed are projected to leadto continued market improvement.

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Six-Month Outlook

SF TH Condo

SF: 59 TH: 41 Condo 36

REALTORS remain generally

optimistic for the next 6 months.

The REALTORS Confidence Index

Six Month Outlook for Single

Family Homes rose to 59 inNovember.


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The forecast is based on an economy expected to grow at 2.1 percent in 2012 (2.5percent in 2013) and with 30-year mortgage rates at 3.7 percent (4.0 percent in 2013) .

What Does This Mean For REALTORS?

The real estate market continues to recover both in terms of sales and price. Continued

restrictive mortgage availability with tight underwriting standards is a problem, butREALTORS report that loans are frequently available at smaller banks and credit unions.Making sure that appraisers are qualified and that appropriate comps are used are important.Finally, tight inventories are making markets increasingly competitive.

3000000

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60000007000000

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Existing Home Sales: Actual and Forecast

Outlook Projects Continued Recovery

Twelve Month Roll Forecast

2012 Forecast: 4.62 Mil

2013 Forecast: 5.05 Mil

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Median Prices by Month, Not Statistically Adjusted

Outlook Projects Improvement

Median Price Forecast

2012Forecast: $176,100


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I. Market Conditions

REALTORS Confidence Index Is Up in November

The current confidence index is essentially unchanged for single-family homes at 53,

indicating no major change in confidence compared to October levels and a level of confidencethat is significantly up from the same period last year (32). The current conditions indexes fortownhouses and condominiums continue to increase.

Across all property types, REALTORS are generally upbeat for the next 6 months.

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Current and Six Month Outlook: Single Family Properties

Current Conditions 6-Month Outlook

Current: 53 Outlook: 59

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Current and Six Month Outlook: Townhouse Properties




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Seventythree Percent of REALTORS Reported Constant or Higher Prices on Recent

Transactions Compared to a Year Ago

Home prices continue to firm up as demand for existing home sales is reported to beincreasing faster than the supply of available homes. About 31 percent of REALTORSreported constant home prices while 42 percent reported rising prices. As the graph belowshows, there are increasingly more REALTORS reporting rising prices compared to year agolevel since the March 2012 survey. Many REALTORS noted a significant increase in multi-bidding on properties, especially for lower priced and ready- to-move- in houses .

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Current and Six Month Outlook: Condo Properties



9% 10%9%

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Prices on Recent Transactions Relative to a Year Ago

Mar-12 Apr-12 May-12 Jun-12 Jul-12Aug-12 Sep-12 Oct-12 Nov-12


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Eighty-five Percent of Responding REALTORS Expect Constant or Higher Residential

Prices in the Next 12 Months

Eighty-five percent of respondents reported the expectation of constant or higher prices inthe next year. Many REALTORS noted a significant increase in multibidding on

properties.The median expected price change in the next 12 months is 3.1 percent.

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REALTORS Price Expectations for Next 12 Months

Nov 2012 RCI Survey

Constant/Rising Prices Falling Prices

85% expect constant/higher prices in next 12 months


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Thirty-Two Percent of Houses Sold in One Month

Multiple offers have led to shorter time on the market for a property to sell.

Approximately a third of REALTORS noted that recently sold properties were on the marketfor less than a month when sold, and 57 percent were sold within 3 months. The percentage ofREALTORS reporting that the house sold had been on the market for 6 months or more isdown to 20 percent from 28 percent a year ago.

32%

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=12

mo

Time On Market When Sold

Apr-12 May-12 June-12 Jul-12 Aug-12 12-Sep 12-Oct 12-Nov

Data shown are for Nov 2012.

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On Market 6 Months or More

Nov '12: 20%

% of closed sales


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Median Days on Market at 70 Days

The median days on market in November was 70 days, down from 98 days a year ago.Tight inventory and multibidding is shortening the days on the market. Although the short saleprocess is still viewed as protracted, short sales were at a median 90 days on market ,

significantly down in the same period last year (119 days). Foreclosures were at 51 median dayson market down from a year ago (74 days) .

Distressed Sales Account for 22 Percent of Sales

About 22 percent of respondents reported selling distressed property (foreclosed and shortsales), down substantially from what had been the case a year or two ago. REALTORSreported strong demand for REOs from investors who typically pay cash and who are willing torenovate the properties and turn them into rentals. Cash sales accounted for roughly 46 percent ofdistressed sales (41 percent in October 2012).

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Median Days on Market

All Short Sales Foreclosed Not distressedSource: NAR, RCI Survey

Nov'12: Shortsale: 90; Foreclosed: 51; Not distressed: 71

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Percent of Respondents Reporting

Distressed Sales

Foreclosed As % of Sales Short Sale As % of Sales

Nov'12: Foreclosed: 12% Shortsale: 10%


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Distressed Real EstateBelow Market Prices

Distressed properties typically sell below the market price of similar property in non-distressed condition. The level of discount fluctuates depending on sales location, type ofproperty, and property condition. Foreclosed property sold on the average at a 20 percentdiscount, while shortsale properties sold at a 16 percent average discount.

Property Condition Affects the Selling Price of Distressed Properties

The discount to market experienced by distressed property is affected by the propertys

physical condition. Well maintained properties tend to sell at a lower discount than is the casefor properties in poor condition. The un-weighted average price discounts to market arepresented for the current survey month as well as the 12 month period from December 2011through November 2012. REALTOR respondents reported price discounts for distressedhouses with above average condition at about 1315 percent, and price discounts of 34-38percent for the properties in the poorest condition.

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Mean Percentage Price Discount of

Distressed Sales

Foreclosed Shortsale

Nov'12: Foreclosed: 20%; Shortsale : 16%


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15.015.9

21.626.9

38.1

13.5 13.216.6

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1-Above

average

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average

4-Well below

ave

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Percent Price Discount by Property Condition (%)

Unweighted Average for Dec 2011 to Nov 2012

Foreclosed Shortsale

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15.6

19.3

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Mean Percent Below Market Value

Nov 2012 RCI Survey

House Condition

1-Above average

Short Sale

11.9

Foreclosure

17.3

2-Average

3-Below average

4-Well below ave

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22.9

28.6

5-Bottom 1% 12.1


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II. Buyer and Seller Characteristics

Cash Sales: 30 Percent of Residential Sales

Approximately 30 percent of REALTORS who made a sale reported cash sales in

November (29 percent in October) . REALTORS reported that cash buyers are primarilyinvestors and international buyers, edging out first time home buyers needing to secure amortgage. Approximately 9 percent of first-time homebuyers paid cash, compared to 70 percentof investors who paid cash.

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Cash Sales as Percent of Market

Nov '12: 30%

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Percent of Cash Sales- Nov 2012


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First Time Buyers: 30 Percent of Residential Buyers

Approximately 30 percent of responding REALTORS reported making a sale to firsttime home buyers (31 percent in October). Normally first time buyers are in the neighborhoodof 40 percent of total residential sales according to NARs Profile of Home Buyers and Seller.

Most first time buyers obtain a mortgage: About 9 percent of REALTORS who made a firsttime home buyer sale reported cash sales (10 percent in October).

The decrease in first time buyers from the typical 40 percent share in part reflects thedifficulty of securing mortgage financing, delays with distressed sales, and purchases of lowerpriced properties by investors. REALTORS have noted that that investors offering all-cashsales to sellers have crowded out first-time buyers in some cases, particularly in the case ofdistressed properties.

Buyers Due to Relocation/Job Changes: 15 Percent of Residential Market

REALTORS reported that 15 percent of residential sales were to buyers for relocationpurposes, i.e., a job move, retirement, etc. (13 percent in October). About 22 percent ofREALTORS who made a sale to a relocation buyer reported a cash sale (17 percent inOctober).

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First Time Buyers as Percent of Market

Nov '12: 30%


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Residential Sales to Investors: 19 Percent of Residential Market

REALTORS reported that investors accounted for 19 percent of total residential salesin November (20 percent in October). Approximately 70 percent of respondents who reported asale to an investor reported a cash sale (69 percent in October ). Investors are reported to beconverting the properties into rentals.

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Relocation Buyers as Percent of Market

Nov '12: 15%

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Sales to Investors as Percent of Market

Nov '12: 19%


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Second Home Purchases: 12 Percent of Residential Market

Second home sales accounted for 12 percent of responses (relatively unchanged sinceAugust). Approximately 52 percent of second home sales were for cash (47 percent in October).

International Transactions: Two Percent of Residential Market

Approximately 1.6 percent of REALTORS reported sales of U.S. residential realestate to foreigners not residing in the U.S (1.9% in October). Approximately 70 percent ofrespondents who reported transactions with international clients reported cash sales (67 percentin October). REALTORS reported about lots ofcash investors from China and Canada.

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Second Home Buyers as Percent of Market

Nov '12: 12%

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Percent of Sales to International Clients

Nov '12: 1.6%


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Thirty-seven Percent of Sales with Mortgages Had Down Payments of 20 Percent or More

Approximately 37 percent of mortage sales involved a down payment of 20 percent ormore (compared to 36 percent in October ). Down payments of 11-19 percent were at 5percent. The trend has remained essentially unchanged since last year, in part reflecting credit

conditions that have been generally reported as tight , stringent, and difficult.

Fifty-four Percent of Responding REALTORS Report Rising Rents for Residential

Properties

About 54 percent of responding REALTORS reported higher residential rents compared

to a year ago and in October (51 percent ) . Rising rental costs make homeownership moreattractive especially at a time when mortages are at their lowest and owning has never been soaffordable.

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Percent of Sales by Downpayment Levels

11-19% >=20%

Nov '12: At least 20% D/P: 37%

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Percent of REALTORS Reporting Changing Rent

Levels as Compared to 12 Months Ago

Higher Rents Lower Rents Constant rents

Nov '12: Rising rent: 54%


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III. Current Issues

Tight Credit Conditions and Slow Lending Process

One of the most frequent comments by REALTORS was a concern over unreasonably

tight credit conditions. Respondents indicated that credit conditions continue to be too tight,that lenders are taking too long in approving an application, and that information anddocumentation required by lenders is excessive. Respondents expressed frustration that somefinancial institutions appear to lend only to individuals with the highest levels of credit scores.

There appears to be an unnecessarily high level of risk aversion. In the 2001-04 timeframea time of normal residential real estate markets before the Great Recession--approximately 40percent of Fannie Maes and Freddie Macs loans went to applicants withcredit scores above 740. In contrast, REALTORS responding to theRCIsurvey indicated thatover 50 percent of loans went to borrowers with credit scores above 740 , including Fannie,Freddie, and other lenders. In the case of Fannie and Freddiewhich are now a smaller part of

the marketin 2011 approximately 75 percent of loans had credit scores of 740 and above.

Estimates by NAR economists have indicated that an additional 500,000 to 700,000additional sales could be made if credit conditions returned to normal. This increased level ofsales activity could generate an additional 250-350 thousand additional jobs on an annual basis,because existing home sales generate jobs across a wide spectrum of the economyi.e.,attorneys, painters, plumbers, landscapers, title companies, furniture manufacturers, etc. Theseare jobs that could be generated at no cost and almost immediately.

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lt 620 620 - 659 660-699 700-739 740+

NAR-RCI Survey Credit Scores

RCI-Feb'12 RCI-Mar'12 RCI-Apr'12 RCI-May'12 RCI-Jun'12

RCI-Jul'12 RCI-Aug'12 RCI-Sep'12 RCI-0ct'12 RCI-Nov'12


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The meaning for REALTORS is clear: In many cases lenders are not making loans topotential buyers with less than perfect credit scores. A potential home buyer who is rejectedby one bank or financial institution should try, try, try again at a different financialinstitution. Rejection of a loan application may be more indicative of the financial state of thelending institution than of the applicants credit worthiness. There are a variety of potentiallending sources in addition to large banks and mortgage brokers. For example, a number ofREALTORS noted that regional and community banks and credit unions could be goodpotential alternative sources of mortgages.

AppraisalsA Continuing Problem

Appraisals continued to be a problem in moving transactions to closure. ManyREALTORS continue to report that appraisal values are not keeping pace with theappreciation in market values. In some cases REALTORS reported that appraisers were usingforeclosures as compswhich they clearly are not. REALTORS also reported encounters without-of-town appraisers who have little knowledge of the neighborhood/local conditions.REALTORS also expressed frustration at the slow turn around time from appraisers andappraisal requirements that are an uncessary expense on the buyer.

Thirty-four percent of REALTORS reported having had a problem with an appraisal in

the past 3 months (same as in September). Approximately 10 percent of the respondentsreported that appraisal problems led to contract cancellation; about 10 percent reported a delay asa result of an appraisal problem, and almost 15 percent reported that the appraisal problems ledto lower prices.

2% 2% 1% 1% 1% 1% 1% 3% 1% 2%

49%

60% 57% 53%58%

54% 53% 53%57% 57%

0% 1%5% 4%

75% 74%

42% 44%

FICO Scores: Recent Scores in 2012 vs.

Scores in 2005

lt620(RCI) 740+(RCI) lt620(Fannie/Freddie) 740+(Fannie/Freddie)


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IV. Comments: Straight from the REALTORSJed Smith, Managing Director, Quantitative Research

REALTORS mentioned low inventories of available homes for sale, tight financingconditions, appraisal issues, and uncertain economic conditions as impacting the housingmarkets.

1. Low Inventory/multiple biddingInventory remains very tight, with multi-bidding becoming the norm, especially for well-

priced homes. Investors, who typically pay cash, almost certainly win against first-time buyers.REOs do not appear to be coming sufficiently to meet demand, while sellers are also waiting forprices to pick up further. There are reports of homes selling above list prices. The process hasbeen distressing with REALTORS calling for more accountability and transparency in theprocess. Here is what REALTORS are saying:

8-10 offers per house if they are turn key ready 85% of our listings are REO and have multiple offers. Now we are seeing the result of the banks

being required to work with Sellers, and our shortsale inventory is far surpassing the REO listings.

A lot of multiple offers. A lot of cash buyer competition. Equity sales are selling above marketand above appraised values. Trends remind me of real estate 6-7 years ago.

Multi-offers for cash, investors trying to chase yields of 6% are everywhere! Multiple offers on 98% of my properties I list for sale in the last 6 months My REO inventory is down 70% since December 2010. I think we are through the worst of the

REO mess but the flow will pick up again in the 2nd quarter of 2013

Most listings are short sales; most sales are REO's and by investors. REO agent accountability is very low there should be a way to prove that your offer was

presented to the seller..PROOF of presentation on all Short sales and REO's

0%

10%

20%

30%

40%

50%

201003

201004

201005

201006

201007

201008

201009

201010

201011

201012

201101

201102

201103

201104

201105

201106

201107

201108

201109

201110

201111

201112

201201

201202

201203

201204

201205

201206

201207

201208

201209

201210

201211

Percent of REALTORS Reporting Appraisal

Problems in Past 3 Months

Contract Cancelled Contract Delayed Negotiated to Lower Price

Nov '12: 34%


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2. Tight Financing/creditAccess to financing remains tight, benefting cash buyers. The process remains protracted,

causing delayed closings and risking cancellations. There are reports that banks are asking forhigher credit scores, with a report of a bank rejecting a score of as high as 800. There is also lack

of assistance for helping current homeowners who are slightly delinquent to modify keep theirhomes. Here is what REALTORS are saying:

Financing taking too long (underwriting/processing with a radical amount of multiple reviewcreating a back log) which results in confusion in the final days leading up to closing.

Lenders are not making closing dates. 45-60 days are being given per contract and we areseeing as much as a 2 month delay in closings.

The mortgage industry is continuing to be in a difficult process. They are taking the process tothe extreme and even offending strong buyers with credit scores in the 800's.

35% of my buyers contracts have been terminated due to lenders and underwriters changingqualifications in the process, and buyers losing money for inspections and appraisals

Lender are being more aggressive (in a good way) working with Short Sales. They need to bemore aggressive with Loan Modification.

3. Appraisal issuesThe most common reports are about out-of- area appraisers who have poor knowledge of

local conditions. Another issue is the demand for unusual repairs by some appraisers.

Appraisals remain a problem. Third party situation creates an environment where persons notfamiliar with the sales or market are doing the appraisal under valuing the property.

I've had contracts canceled, delayed and renegotiated because of low appraisals. Appraisal problems have not been with price but comments and asking for unusual repairs

4. Weak economy and policy uncertaintyAlthough the job market is improving, the slow pace of job creation and job insecurity keeps

buyers on the sidelines, especially since banks typically require some employment track record.Concerns about possible tax measures such as changes to mortgage interest deduction appears tobe causing buyers to just wait and see for now.

People can't buy homes unless they have a job and have been employed for 2+ years, so marketoutlook will be weak until 2 years after stronger job market.

there does not seem to be confidence in the over all economy on the part of buyers. They do notwant to make big decisions now.


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V. NAR Recent Articles

Small Town and Big City Job RecoveryLawrence Yun, Chief Economist

The nations job market is slowly recovering. Slowly is the proper description when theone year percentage gain to October has been only 1.5 percent. However, some small-sizedcities are moving at a very fast clip. Here are some examples of top flyers with at least fourpercent growth from one year ago. For some like Elkhart-Goshen it is only a recovery after adeep downturn and the market is still in a hole. For others like Lafayette, something amazing isgoing on as the employment has hit an all-time local high. And does anyone know what is goingon in Pascagoula, where there are some strange ups and downs?
http://economistsoutlook.blogs.realtor.org/files/2012/11/1_112912A.jpg


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http://economistsoutlook.blogs.realtor.org/files/2012/11/1_112912D.pnghttp://economistsoutlook.blogs.realtor.org/files/2012/11/1_112912C.pnghttp://economistsoutlook.blogs.realtor.org/files/2012/11/1_112912B.png


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But what about big cities? Because of the already sizable population, it is much moredifficult to attain very high percentage gains as seen for some small towns. The New York metroregion added 128,000 net new jobs in the past 12 months, yet matches only the national averagegrowth 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 governmentstimulus money. But outside of the D.C. Beltway, there are two cities which are now setting newhighs: Dallas and Houston. The intrastate jobs rivalry also implies why the Texans are a bithappier than the Cowboys.
http://economistsoutlook.blogs.realtor.org/files/2012/11/Capture11.jpghttp://economistsoutlook.blogs.realtor.org/files/2012/11/tttt.jpg


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Neighborhood Choice

Jessica Lautz, Survey Research Manager

For the past several years, the top factor influencing where a buyer purchased a home wasthe quality of the neighborhood. Convenience to work was the second most significant factor

with just under half of buyers citing its importance. Affordability of homes was also veryimportant, with 39 percent citing it as a factor in their neighborhood choice. By family type thereare variations in the importance of neighborhood factors. Single females place a higher priorityon convenience to friends and family than other family types. Both single males and singlefemales value affordability of homes. Married couples and those with children in the home placemore priority on the quality and convenience to schools than other buyers. Unmarried couplesand single males place a higher value on convenience to entertainment and leisure activities.

Data from the2012 Profile of Home Buyers and Sellers
http://www.realtor.org/topics/profile-of-home-buyers-and-sellershttp://www.realtor.org/topics/profile-of-home-buyers-and-sellershttp://www.realtor.org/topics/profile-of-home-buyers-and-sellershttp://www.realtor.org/topics/profile-of-home-buyers-and-sellers


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Overview of Foot Traffic Based on SentriLock

Ken Fears, Manager, Regional Economics & Housing Finance

Every month SentriLock, LLC. provides NAR Research with data on the number ofshowings. 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. In the latest reading,the diffusion index for foot traffic rose for the second consecutive month, reaching 66.3, up from61.7 in October.

Novembers rise in the diffusion index indicates that more than half of the markets in this

panel had stronger foot traffic in November of 2012 than the same month a year earlier. Thisreading does not suggest how much of an increase in traffic there was, just that the increase wasbroadly spread across the US. Foot traffic had seesawed for several months. However, it isworth noting that in the summer of 2011, traffic rose sharply relative to a year earlier, so theperiod of plateau in the summer of 2012 reflects a comparison to strong increases a year earlier.Furthermore, tight inventories in the West are creating a drag on foot traffic as REALTORS

have fewer properties to show their clients. Still, record low mortgage rates along with stableemployment growth are driving a robust recovery in buyer confidence. A restoration oftraditional, sound underwriting would help to extend credit to a broader section of the market,expanding this trend and further shoring up the recovery.


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Appendix. RCI Historical Data

REALTORS Confidence Index Survey As of November 2012

National Association of REALTORS

Price Expectation

for Next 12

Months Rent Trends

Median Days

on the

Market

Buyer

Traffic

Seller

Traffic

As % of

REALTORS

WhoExpect

Constant/Rising

Prices

As % ofREALTORS

Who Expect

Rising Rents

Year/Month

Current

Conditions

6-Month

Outlook

Current

Conditions

6-Month

Outlook

Current

Conditions

6-Month

Outlook

200801 27 38 16 23 14 19 31 58 - -

200802 27 38 17 24 15 21 31 57 - -

200803 29 39 19 25 15 21 35 56 - -

200804 28 37 19 25 16 22 30 56 - -

200805 31 38 21 26 17 23 34 55 - -

200806 29 37 20 23 18 21 31 57 - -

200807 29 33 20 22 17 19 31 54 - -

200808 26 33 18 22 15 20 33 52 - -

200809 25 28 16 19 14 16 28 48 - -

200810 22 29 14 19 12 17 27 46 48% -

200811 21 31 13 20 12 17 26 42 44% -

200812 19 28 11 17 10 14 25 46 40% -

200901 23 34 13 20 11 18 32 45 45% -

200902 25 35 14 22 12 18 36 46 46% -

200903 28 40 15 23 12 19 39 48 57% -

200904 33 45 18 27 14 22 44 48 65% -

200905 34 44 20 27 16 23 44 48 65% -

200906 35 43 18 24 14 19 43 46 64% -

200907 34 40 18 22 14 18 41 47 64% -

200908 38 42 21 24 16 20 45 47 72% -

200909 35 41 19 22 15 19 41 47 70% -

200910 34 39 17 22 13 17 39 44 69% -

200911 35 41 19 23 15 18 38 43 70% -

200912 33 42 15 23 13 19 37 43 67% -

201001 36 43 18 24 14 18 41 44 66% -

201002 35 43 18 23 14 19 41 46 65% -

201003 36 42 18 22 14 18 42 47 65% -

201004 35 38 19 22 14 17 41 44 68% -

201005 36 40 19 22 17 19 37 43 67% -

201006 27 29 14 14 11 12 27 42 58% -

201007 24 27 11 13 10 11 26 40 55% -

201008 23 26 12 13 10 11 24 40 53% -201009 21 25 12 15 9 11 23 41 49% -

201010 23 26 9 13 8 11 23 38 50% -

201011 23 28 11 15 10 13 25 37 52% -

201012 25 32 13 18 10 15 27 36 59% 39% -

201101 27 37 13 19 10 15 30 37 56% 42% -

201102 30 37 14 19 12 17 33 41 60% 44% -

201103 32 39 17 22 14 18 37 41 58% 46% -

201104 32 39 16 20 14 17 37 42 59% 48% -

201105 33 38 18 22 15 18 37 42 59% 55% 96

201106 31 34 16 19 14 16 33 41 54% 52% 97

201107 31 33 17 19 14 17 34 40 55% 49% 98

201108 31 32 17 18 14 15 32 38 54% 50% 92

201109 29 30 17 18 14 15 30 36 53% 47% 101

201110 30 32 18 20 14 16 33 36 58% 51% 96

201111 30 36 19 22 15 18 33 35 57% 47% 98

201112 32 40 19 24 14 19 36 37 62% 49% 99

201201 37 46 23 29 18 23 44 39 67% 47% 99

201202 43 52 26 32 21 27 51 40 73% 51% 97

201203 49 57 30 36 25 31 55 41 78% 53% 91

201204 50 55 31 36 25 30 55 41 81% 52% 83

201205 57 62 36 41 29 34 55 41 83% 54% 72

201206 58 61 38 42 31 36 54 40 86% 54% 70

201207 54 56 35 38 29 32 54 40 85% 57% 69

201208 54 56 35 38 30 34 55 40 87% 55% 70

201209 53 56 36 39 29 33 53 38 88% 57% 70

201210 53 58 36 41 31 36 54 37 87% 51% 71

201211 53 59 36 41 31 36 53 37 85% 54% 70

/1 In the RCI Survey,a sale refers to the REALTOR's last closed or completed sale/transaction for the reference month.

Prepared by the Research Division. For querries, please contact the Research Division c/o Dr. Jed Smith, Manager, Quantitative Research.

Traffic Index

Single Family Townhouse Condominium

REALTORS Confidence Index (RCI)


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REALTORS Confidence Index Survey As of November 2012

National Association of REALTORS *

Appraisal Issues

Foreclosed

As % of Sales

Short Sale

As % of

Sales

Total

Distressed

Sales As %

of All Sales

Mean Price

Discount of

Foreclosed

Property Sales

Mean Price

Discount of

Shortsale

Property Sales

All Cash

Sales as % of

All Sales

% of Mortgage Sales

with at least 20 %

Downpayment

First-

time

Buyer Investor

Second

home Relocation

International

Buyer

As % of

REALTORS Facing

Appraisal Issues

Year/Month

200801 - - -

200802 - - -

200803 - - -

200804 - - -

200805 - - -

200806 - - -

200807 - - -

200808 - - -

200809 - - -

200810 23% 11% 34% 15% 32% 14%

200811 25% 12% 37% 24% 27% 20%

200812 27% 13% 40% 16% 30% 14%

200901 28% 13% 41% 18% 38% 14%

200902 30% 18% 48% 19% 19% 30% 51% 25%

200903 31% 18% 49% 23% 21% 30% 53% 24%

200904 29% 17% 45% 14% 14% 20% 40% 18%

200905 21% 12% 33% 21% 17% 12% 47% 14%

200906 20% 11% 31% 21% 15% 13% 45% 14%

200907 20% 11% 31% 21% 17% 19% 31% 9%

200908 18% 12% 31% 21% 16% 20% 46% 12%200909 19% 10% 29% 21% 17% 21% 49% 13%

200910 18% 12% 30% 19% 18% 20% 50% 14%

200911 21% 12% 33% 21% 16% 19% 51% 12%

200912 22% 10% 32% 18% 15% 22% 43% 15%

201001 24% 14% 38% 15% 17% 26% 40% 17%

201002 23% 12% 35% 22% 19% 27% 42% 19%

201003 24% 12% 35% 21% 19% 27% 44% 19% 3% 39%

201004 21% 12% 33% 21% 19% 26% 49% 15% 2% 39%

201005 19% 12% 31% 19% 14% 25% 46% 14% 2% 39%

201006 17% 15% 32% 19% 12% 24% 43% 13% 1% 42%

201007 22% 10% 32% 19% 12% 30% 38% 19% 2% 42%

201008 22% 12% 34% 19% 12% 28% 31% 21% 2% 39%

201009 23% 12% 35% 19% 15% 29% 32% 18% 11% 2% 41%

201010 23% 11% 34% 22% 14% 29% 32% 19% 12% 2% 40%

201011 22% 11% 33% 20% 17% 31% 32% 19% 10% 3% 39%

201012 24% 12% 36% 20% 16% 29% 33% 20% 13% 3% 35%

201101 24% 13% 37% 22% 15% 32% 29% 23% 10% 2% 35%

201102 26% 13% 39% 22% 15% 33% 34% 19% 14% 3% 33%

201103 27% 13% 40% 19% 11% 35% 33% 22% 13% 4% 34%

201104 24% 13% 37% 20% 17% 31% 34% 36% 20% 13% 13% 3% 35%

201105 20% 11% 31% 21% 17% 30% 32% 36% 19% 13% 14% 3% 35%

201106 18% 12% 30% 20% 16% 29% 37% 31% 19% 14% 14% 3% 32%

201107 17% 12% 29% 21% 15% 29% 36% 32% 18% 13% 15% 3% 32%

201108 19% 12% 31% 20% 16% 29% 34% 32% 22% 11% 15% 2% 33%

201109 18% 12% 30% 22% 15% 30% 35% 32% 19% 12% 15% 3% 31%

201110 17% 11% 28% 20% 14% 29% 34% 34% 18% 12% 15% 2% 35%

201111 19% 10% 29% 19% 14% 28% 34% 35% 19% 10% 14% 2% 36%

201112 19% 13% 32% 22% 13% 31% 36% 31% 21% 13% 14% 2% 34%

201201 22% 13% 35% 21% 19% 31% 35% 33% 23% 13% 13% 2% 32%

201202 20% 14% 34% 22% 16% 33% 32% 32% 23% 12% 11% 2% 30%

201203 18% 11% 29% 19% 16% 32% 34% 33% 21% 11% 12% 2% 31%

201204 17% 11% 28% 21% 14% 29% 33% 35% 20% 12% 13% 2% 32%

201205 15% 10% 25% 18% 14% 28% 37% 34% 17% 11% 15% 3% 33%

201206 13% 12% 25% 18% 15% 29% 36% 32% 19% 12% 15% 2% 35%

201207 12% 12% 24% 17% 15% 27% 34% 34% 16% 11% 15% 2% 34%

201208 12% 10% 22% 19% 13% 27% 37% 31% 18% 12% 16% 2% 36%

201209 13% 11% 24% 21% 13% 28% 35% 32% 18% 12% 14% 2% 35%

201210 12% 12% 24% 20% 14% 29% 36% 31% 20% 12% 13% 2% 34%

201211 12% 10% 22% 20% 16% 30% 37% 30% 19% 12% 15% 2% 34%

/1 In the RCI Survey,a sale refers to the REALTOR's last closed or completed sale/transaction for the ref erence month.

Prepared by the Research Division. For querries, please contact the Research Division c/o Dr. Jed Smith, Manager, Quantitative Research.

FinancingDistressed Sales /1 Type of Buyer As % of All Buyers /1

realtors confidence index: november 2012 report

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