Professional Documents
Culture Documents
Research Division
NATIONAL ASSOCIATION of REALTORS
500 New Jersey Avenue, NW
Washington, DC 20001
202.383.1000
1
The survey is sent to 50,000 REALTORS who are selected through simple random sampling. To increase the response rate,
the survey is also sent to respondents in the previous three surveys who provided their email addresses. The number of responses
to a specific question varies because the question may not be applicable to the respondent or because of non-response. To
encourage survey participation, eight REALTORS are randomly selected to receive a gift card.
2
Thanks to Jessica Lautz, Managing Director, Survey Research and Communications, and Amanda Riggs, Research Survey
Analyst, for their comments in improving the survey and in editing the report.
Table of Contents
Summary .................................................................................................................................................... 3
I. Market Conditions .................................................................................................................................. 4
REALTORS Broadly Reported an Improving Market Compared to a Year Ago ................................. 4
REALTORS Still Broadly Optimistic Over the Next Six Months ........................................................ 5
REALTORS Reported Stronger Buyer and Seller Traffic Compared to a Year Ago............................ 7
REALTORS Expect Prices to Increase Modestly in Next 12 Months................................................... 9
Properties On the Market at 57 Days ...................................................................................................... 10
II. Buyer and Seller Characteristics ......................................................................................................... 13
Sales to First-Time Buyers: 31 Percent of Sales ..................................................................................... 13
Sales for Investment Purposes: 13 Percent of Sales ............................................................................... 13
Distressed Sales: Six Percent of Sales .................................................................................................... 14
Cash Sales: 24 Percent of Sales .............................................................................................................. 16
Age, Previous Residence, and Type of Property Purchased ................................................................... 18
III. Current Issues .................................................................................................................................... 20
Contract Settlement Issues: Financing and Appraisals are Major Issues ................................................ 20
Summary
Market conditions vary across local markets and states, but REALTORS generally reported
improved housing market conditions in October 2015 compared to a year ago. The confidence
indices for current conditions and the six-month outlook for single-family, townhome, and
condominium properties all increased compared to a year ago. The buyer and seller traffic
indices also increased compared to a year ago, although the below 50 reading of the seller traffic
index indicates continued tight supply across many local markets. Compared to September 2015,
market activity eased, in part due to the seasonal slowdown across many local markets at this
time of the year. Sustained job creation, the low interest rate environment, measures
implemented by government-sponsored enterprises (Fannie Mae and Freddie Mac) to make
credit more accessible through the availability of three percent downpayment mortgages, and the
Federal Housing Authority reduction in the annual mortgage insurance premium rate that lowers
the cost of borrowing are likely sustaining the housing market recovery.
First-time home buyers accounted for 31 percent of sales, essentially unchanged from the
previous months figures. Cash sales made up 24 percent of sales, purchases for investment
purposes accounted for 13 percent of sales, and distressed properties dropped to six percent of
sales. Properties typically sold within 57 days nationally compared to 63 days a year ago. It
typically took another 40 days to close a sale.
Tight inventories, decreasing affordability, continued tight mortgage availability, and
slow/excessively conservative appraisals were the main issues reported by respondents.
Respondents in states with large oil-related industries reported weakening demand given the
continuing slump in oil prices. When asked about the Know Before You Owe/TRID
regulations that took effect on October 3, 2015, respondents reported that it is still too early to
assess the rules impact as it takes at least a month for contracts to go into settlement.
October 2015 REALTORS Confidence Index Survey Highlights
RCI Current Conditions: Single-Family Sales
RCI Six-Month Outlook: Single-Family Sales
RCI Buyer Traffic Index
RCI Seller Traffic Index
1
First-Time Home buyers, as Percent of Sales
Sales to Investors, as Percent of Sales
Cash Sales, as Percent of Sales
Distressed Sales, as Percent of Sales
Median Days on Market
Median Expected Price Growth in Next 12 Months (%)
Oct 2015
57
63
52
40
31
13
24
6
57
3.2
Sep 2015
61
62
53
41
29
13
24
7
49
3.2
Oct 2014
50
56
43
38
29
15
27
9
63
3.0
1 - NARs 2015 Profile of Home Buyer and Sellers (HBS) reports that among primary residence home buyers, 32 percent
were first-time home buyers. The HBS surveys primary residence home buyers, while the monthly RCI Survey surveys
REALTORS and also captures purchases for investment purposes and vacation/second homes.
I.
Market Conditions
57
60
41
40
39
20
200801
200805
200809
200901
200905
200909
201001
201005
201009
201101
201105
201109
201201
201205
201209
201301
201305
201309
201401
201405
201409
201501
201505
201509
Single-family
Townhome
Condominium
3
This is a diffusion index which measures the direction of and broadness of the respondents market conditions or confidence.
An index of 50 indicates a balance of respondents having weak (index=0) and strong (index=100) expectations or all
respondents having moderate (=50) expectations. The index is not adjusted for seasonality effects.
4
FHA and the GSEs have financing eligibility criteria relating to ownership occupancy requirements, delinquent dues, project
approval process, and use for commercial space. See the Statement of the National Association of REALTORS Submitted for the
Record to the Senate Committee on Banking Housing and Urban Affairs on December 9, 2014 at
http://www.ksefocus.com/billdatabase/clientfiles/172/1/2180.pdf
63
47
44
200801
200805
200809
200901
200905
200909
201001
201005
201009
201101
201105
201109
201201
201205
201209
201301
201305
201309
201401
201405
201409
201501
201505
201509
80
70
60
50
40
30
20
10
0
Single-family
Townhome
Condominium
The following maps show the REALTORS Confidence Index - Six-Month Outlook across
property types by state. All states, except for Vermont and Connecticut had broadly strong to
very strong markets. 6 States with large oil-related sectors such as Texas, North Dakota, and
Louisiana still had a broadly strong housing market. In the townhomes market, only 13 states
had broadly strong markets, which included California, Oregon, Washington, Colorado, Texas,
Florida, Maryland, and the District of Columbia. The condominium market remains broadly
weak except in nine states such as California, Washington, North Dakota, Colorado,
Wyoming, Michigan, and Florida. REALTORS have reported difficulty in accessing
condominium unit purchase financing for both FHA-insured and GSE-backed loans. Only 20
percent of condominiums are eligible for FHA condominium unit financing because of strict
eligibility criteria such as those pertaining to occupancy requirements and delinquency dues. 7
5
Respondents were asked What are your expectations for the housing market over the next six months compared to the current
state of the market in the neighborhood(s) or area(s) where you make most of your sales?
6
The market outlook for each state is based on data for the last three months to increase the observations for each state. Small
states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have less than 30 observations. Respondents rated conditions
or expectations as Strong (100), Moderate (50), and Weak (0). The responses are compiled into a diffusion index. Values
25 and lower are considered very weak, values greater than 25 to 49 are considered weak, a value of 50 is considered
moderate, values greater than 50 to 75 are considered strong, and values greater than 76 are considered very strong.
http://www.realtor.org/topics/condominiums/condominium-resource-book
REALTORS Reported Stronger Buyer and Seller Traffic Compared to a Year Ago
While local conditions vary, buyer traffic was broadly strong compared to a year ago. The
REALTORS Buyer Traffic Index registered at 52 (53 in September 2015; 43 in October 2014).
Buyer traffic was stronger compared to a year ago, but was seasonally slower after the strong
spring and summer months.
Meanwhile, supply remains tight. The REALTORS Seller Traffic Index registered at 40 (41 in
September 2015 and 38 in October 2014). While the construction of new privately owned
housing units has been improving, reaching 1.2 million units in the second quarter of 2015,
roughly 40 percent of recent new construction has been multi-family structures which are
typically for rental occupancy. Historically, multi-family structures accounted for only 20
percent of new construction, so the availability of single-units for purchase among recently
constructed properties is lower than is historically normal. REALTORS reported low inventory
of properties in the lower price range and for those that are move-in ready.
80
70
52
60
50
40
40
30
200801
200805
200809
200901
200905
200909
201001
201005
201009
201101
201105
201109
201201
201205
201209
201301
201305
201309
201401
201405
201409
201501
201505
201509
20
Buyer traffic was moderate to very strong across most states, measured by the REALTORS
Buyer Traffic Index. 8 States with the strongest buyer traffic were Washington, Oregon, and
Wyoming.
REALTORS Buyer Traffic Index
AugOct 2015
Respondents were asked How do you rate the past month's buyer traffic in the neighborhood(s) or area(s) where you make
most of your sales? The responses were Strong (100), Moderate (50), and Weak (0). Respondents rated conditions or
expectations as Strong (100), Moderate (50), and Weak (0). The responses are compiled into a diffusion index. Values 25
and lower are considered very weak, values greater than 25 to 49 are considered weak, a value of 50 is considered
moderate, values greater than 50 to 75 are considered strong, and values greater than 76 are considered very strong.
Meanwhile, seller traffic was was broadly weak across most states, measured by the
REALTORS Seller Traffic Index. 9 Seller traffic was strong in Montana, Wyoming, North
Dakota, Texas, Maine, and Alaska.
REALTORS Seller Traffic Index
AugOct 2015
Respondents were asked How do you rate the past month's seller traffic in the neighborhood(s) or area(s) where you make
most of your sales? The responses were Strong (100), Moderate (50), and Weak (0). Respondents rated conditions or
expectations as Strong (100), Moderate (50), and Weak (0). The responses are compiled into a diffusion index. Values 25
and lower are considered very weak, values greater than 25 to 49 are considered weak, a value of 50 is considered
moderate, values greater than 50 to 75 are considered strong, and values greater than 76 are considered very strong.
9
A comparison of the expected price growth for the next 12 months compared to the actual price growth shows the expected
price growth to be more conservative than the actual price growth, but both are generally headed in the same direction.
10
In generating the median price expectation at the state level, we use data for the last three surveys to have close to 30
observations. Small states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have less than 30 observations.
upbeat, with a median expected price growth in the range of five to six percent. In Washington,
Nevada, and Colorado, the median expected price growth among respondents was four to five
percent.
Median Expected Price Change of REALTORS in Next 12 Months, By State
AugOct 2015
11
Respondents were asked For the last house that you closed in the past month, how long was it on the market from listing time
to the time the seller accepted the buyers offer? The median is the number of days at which half of the properties stayed on the
market.
10
All: 57
Foreclosed: 67
201202
200
201108
Not distressed: 57
150
100
50
All
Foreclosed
Short sale
201508
201505
201502
201411
201408
201405
201402
201311
201308
201305
201302
201211
201208
201205
201111
201105
Not distressed
Approximately 33 percent of properties were on the market for less than a month when sold.
About 11 percent were on the market for longer than six months, a decrease from 30 percent in
January 2012. Properties that stay on the market for longer are more likely to sell at a discount.
40%
35%
30%
25%
20%
15%
18%
17%
11%
10%
5%
5%
4%
4%
3%
4%
0%
Less than 1 to less 2 to less 3 to less 4 to less 5 to less 6 to less 9 to less
12
1 month than 2
than 3
than 4
than 5
than 6
than 9 than 12 months or
months months months months months months months
more
201410
201509
201510
11
30%
26%
25%
10%
19%
27%
41%
17%
4%
25%
Less than 1
months
Less than 3
months
6%
23%
6 to less than 9
months
12%
12%
34%
37%
12 months or
more
Days on Market
Net discount of 12% or higher
Net discount of less than 4%
Net premium of up to 4%
Net premium of 12% or higher
Properties typically sold within a month in California, Utah, Colorado, North Dakota, South
Dakota, Nebraska, and the District of Columbia. In Vermont, properties were typically on the
market for longer than 90 days when sold. All real estate is local. State-level data is provided for
REALTORS who may want to compare local markets against the state and national summary.
Median Days on Market for Sales Reported by REALTORS, By State
AugOct 2015
12
31%
30%
20%
10%
200810
200902
200906
200910
201002
201006
201010
201102
201106
201110
201202
201206
201210
201302
201306
201310
201402
201406
201410
201502
201506
201510
0%
12
First-time buyers accounted for about 33 percent of all home buyers based on data from NARs 2014 Profile of Home Buyers
and Sellers (HBS). The HBS is a survey of primary residence home buyers and does not capture investor purchases but does
cover both existing and new home sales. The RCI Survey is a survey of REALTORS about their transactions and captures
purchases for investment purposes and second homes for existing homes.
13
13%
15%
10%
5%
200810
200902
200906
200910
201002
201006
201010
201102
201106
201110
201202
201206
201210
201302
201306
201310
201402
201406
201410
201502
201506
201510
0%
30%
20%
10%
Foreclosed
13
201510
201506
201502
201410
201406
201402
201310
201306
201302
201210
201206
201202
201110
201106
201102
201010
201006
201002
200910
200906
200902
200810
0%
Short sale
The survey asks respondents to report on the characteristics of the most recent sale for the month.
14
20%
15%
11%
10%
13%
10%
18%
12%
5%
0%
Below average
Above average
Foreclosed
Average
Short sale
Distressed sales have fallen, with fewer properties in foreclosure (840,217 properties in the
foreclosure inventory as of the second quarter of 2015 from a peak of two million properties in
2009-2010). 14 Fewer distressed sales and foreclosures improve home values, creating more home
equity for the homeowner. As of the second quarter of 2015, the equity of all households in real
estate was valued at $12.2 trillion, or 56 percent of the value of households real estate assets.
Household equity peaked at $13.3 trillion in the first quarter of 2006.
Foreclosure Inventory
Q1/2014
Q3/2012
Q1/2011
Q3/2009
Q1/2008
0.00
Q3/2006
0.0
Q1/2005
0.50
Q3/2003
1.0
Q1/2002
1.00
Q3/2000
2.0
Q1/1999
1.50
Q3/1997
3.0
Q1/1996
2.00
Q3/1994
4.0
Q1/1993
2.50
Q3/1991
5.0
Q1/1990
As percent of mortgages
As percent of mortgages
14
15
Owner's Equity,
$ bn
14000.000
Owner's Equity,
as % of RE assets
80.00
12000.000
70.00
10000.000
60.00
50.00
8000.000
40.00
6000.000
30.00
4000.000
20.00
2000.000
10.00
0.000
Q1/1980
Q1/1982
Q1/1984
Q1/1986
Q1/1988
Q1/1990
Q1/1992
Q1/1994
Q1/1996
Q1/1998
Q1/2000
Q1/2002
Q1/2004
Q1/2006
Q1/2008
Q1/2010
Q1/2012
Q1/2014
0.00
24%
25%
20%
15%
10%
5%
201510
201506
201502
201410
201406
201402
201310
201306
201302
201210
201206
201202
201110
201106
201102
201010
201006
201002
200910
200906
200902
200810
0%
16
71%
70%
62%
60%
49%
50%
42%
40%
30%
20%
13%
8%
10%
0%
International
Investor
Second
home
Distressed
sale
Relocation
First-time
buyer
Among financed home purchases, respondents reported that 38 percent made a downpayment of
at least 20 percent, about the same since 2011 when NAR started collecting this data. Among
financed purchases by first-time home buyers, 69 percent had downpayment terms of zero to six
percent, a decrease from 77 percent of first-time buyers in 2009. Low downpayment loans have a
higher monthly mortgage payment and typically require a mortgage insurance, but are an option
for home buyers who do not have large savings and are willing to pay the higher monthly
payment. The decreased share of low downpayment loans is one indicator that access to credit
has become more difficult for borrowers who cannot make higher downpayments. In 2015,
Fannie Mae and Freddie Mac started purchasing three percent downpayment mortgages of
borrowers who meet underwriting guidelines.
Percent of Mortgage Sales With Downpayment of
At Least 20 Percent as of October 2015
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
201510
201507
201504
201501
201410
201407
201404
201401
201310
201307
201304
201301
201210
201207
201204
201201
201110
201107
201104
38%
17
200906
200909
201002
201005
201008
201011
201102
201105
201108
201111
201202
201205
201208
201211
201302
201305
201308
201311
201402
201405
201408
201411
201502
201505
201508
69%
Age 35 to 55
201510
201509
201508
201507
201506
201505
201504
201503
201502
201501
201412
201411
201410
201409
201408
201407
201404
201311
201309
201307
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Slightly more than half of all reported buyers lived in homes they owned immediately prior to
their recent home purchase. These buyers include trade-up or trade-down buyers and those who
are purchasing a second home or one for investment purpose. Home buyers who were renting
immediately prior to their recent home purchase accounted for 35 percent of sales, essentially
unchanged compared to past months.
18
201509
201508
201507
201506
201505
201504
201503
201502
201501
201412
201411
201410
201409
201408
0%
Sales data compiled for the November 2014-October 2015 timeframe showed that among buyers
34 years and under, 86 percent purchased single-family homes, compared to the 77 percent rate
for buyers 56 years and older. Buyers of ages 56 and over are about twice as likely to purchase a
condominium as other buyers. REALTORS have also reported a demand for 55 and older
community housing as the large baby boomer population continues to move into retirement.
7%
7%
8%
6%
86%
86%
Age 35 to 55
Single-family
16%
7%
10%
7%
77%
84%
All
Townhome
Condominium
19
9%
26%
10%
26%
9%
28%
7%
29%
6%
29%
7%
29%
6%
30%
7%
29%
65%
64%
63%
63%
65%
65%
64%
64%
60%
40%
20%
0%
Of all contracts settled or terminated, financing, appraisal, and home inspection issues were the
major problems: 18 percent had financing issues, 13 percent had home inspection issues, and 11
percent had appraisal issues.
Among contracts that had a delayed settlement (29 percent), 46 percent had financing issues.
Among contracts that were terminated (seven percent), 32 percent had home inspection issues,
while 27 percent had financing issues.
20
No problems encountered
Issues related to obtaining financing
18%
13%
Appraisal issues
11%
5%
Titling/deed issues
4%
3%
1%
1%
Other
9%
*Will not sum to 100 percent because multiple responses are allowed. "Other" includes buyer or
seller backing out, price disagreement, non-price disagreement, HOA issues, builder delays, etc.
46%
21%
17%
10%
9%
6%
2%
1%
18%
*Will not sum to 100 percent because multiple responses are allowed. "Other" includes buyer or seller
backing out, price disagreement, non-price disagreement, HOA issues, builder delays, etc.
21
32%
27%
Appraisal issues
16%
10%
7%
4%
2%
1%
15%
*Will not sum to 100 percent because multiple responses are allowed. "Other" includes buyer or seller backing
out, price disagreement, non-price disagreement, HOA issues, builder delays, etc.
22
23