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Colorado Association of REALTORS®
Everitt Real Estate Center
2011 Residential Survey Results
Background
The Everitt Real Estate Center (EREC) began working with the Colorado Association of REALTORS® (CAR), Colorado Mortgage Lenders Association (CMLA), and the Colorado Association of Home Builders (CAHB) in January 2011 to coordinate the development of inaugural surveys of their respective memberships to provide a comprehensive view of the residential market in the state of Colorado. As a land-grant university committed to the delivery of industry-applied research for the state of Colorado, we appreciate the time and efforts of CAR, CMLA, and CAHB leadership to fulfill this important mission.
Surveys were jointly designed by EREC and individual associations. Each association disseminated the survey either through notification on web pages or email blasts between mid-February and early March. Final results are based on the number of survey respondents as of midnight on March 18, 2011. The total number of survey respondents by survey are: (A) 272 for CAR, (B) 164 for CAHB, and (C) 138 for CMLA.
Several survey questions were consistent across all three surveys that allows us to test for significant differences in opinions and future expectations. The CAR survey included questions that were similar to the Northern Colorado Residential Survey 2010 such that comparisons of answers between state-wide members in 2011 and Northern Colorado survey respondents in 2010 are possible even though geographic coverage is dissimilar. EREC conducted a CMLA survey in 2010 and comparisons to 2011 results are included as appropriate.
Thank you to the survey respondents for taking the time to answer the confidential online surveys. We trust continued support from CAR, CAHB, and CMLA in the years ahead to track significant trends and expectations for the Colorado residential market.
Colorado Association of REALTORS® 2011 Survey
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Summary findings
• CAR respondents are generally more optimistic in terms of economic issues than CAHB or CMLA respondents
• More transactions, short sales, and regulations in 2011 – No significant change in days on market 2011 expectations over 2010
• Buyer confidence and qualifications remain top barriers to sales
• Distressed sales, appraisals, and seller perceptions impacting residential valuations
• Lack of confidence in proposed changes with Fannie Mae and Freddie Mac
• MMDs? Negative impact on neighboring home values
Colorado Association of REALTORS® 2011 Survey
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Colorado Association of REALTORS® 2011 Survey
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0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Worse Same Better
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Worse Same Better
Employment growth Mortgage rates
CAR CAHB CMLA
Source: Colorado Association of REALTORS®, Colorado Association of Home Builders, Colorado Mortgage Lenders Association, Everitt Real Estate Center, March 2011
% R
esp
on
den
ts
Higher expectations for jobs than interest rates across all three associations in 2011 compared to 2010
Harder to find money in 2011 vs. 2010; mixed results by
association on consumer confidence in 2011
Colorado Association of REALTORS® 2011 Survey
5
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Worse Same Better
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Worse Same Better
Construction financing Consumer confidence
CAR CAHB CMLA
Source: Colorado Association of REALTORS®, Colorado Association of Home Builders, Colorado Mortgage Lenders Association, Everitt Real Estate Center, March 2011
% R
esp
on
den
ts
Representative regional distribution
Denver Metro, 87, 34%
Mountain, 39, 15%
Northeast, 74, 28%
Northwest, 25, 10%
Southeast, 22, 8%
Southwest, 12, 5%
6 Colorado Association of REALTORS® 2011
Survey
Region, # respondents, % distribution
Source: Colorado Association of REALTORS®, Everitt Real Estate Center, March 2011
Approximately 85% residential brokers
225
13 2 3 1
22
0
50
100
150
200
250
Residentialbroker
Appraiser Lender Service provider Governmentagency
Other
# R
esp
on
de
nts
7 Colorado Association of REALTORS® 2011
Survey
# Respondents by Membership Classification
Source: Colorado Association of REALTORS®, Everitt Real Estate Center, March 2011
Two-thirds have 10+ yrs residential experience
0
20
40
60
80
100
120
140
160
180
Less than 1 year 2 to 5 years 6 to 10 years Greater than 10years
Residential Commercial
Colorado Association of REALTORS® 2011 Survey
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# Respondents by Residential Real Estate Industry Experience
Source: Colorado Association of REALTORS®, Everitt Real Estate Center, March 2011
Most work in residential sector
Residential, 220, 83%
Commercial, 29, 11%
Resort, 12, 4% Farmland, land, or ranches,
5, 2%
Colorado Association of REALTORS® 2011 Survey
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Property sector, # respondents, % distribution
Source: Colorado Association of REALTORS®, Everitt Real Estate Center, March 2011
Mortgage rates concern, but upbeat on consumer
confidence and job growth
0
20
40
60
80
100
120
140
160
Local and regionalemployment
growth
Mortgage interestrates
Residentialconstruction
financing
Consumerconfidence
# R
esp
on
de
nts
Much Worse Worse About the Same Better Much Better
Colorado Association of REALTORS® 2011 Survey
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Source: Colorado Association of REALTORS®, Everitt Real Estate Center, March 2011
Compared to 2010, what are your expectations for 2011:
DOM expectations – about the same
2.5
%
32
.8%
39
.3%
22
.1%
3.3
%
2.0
%
33
.0%
38
.0%
23
.0%
3.0
%
0%
10%
20%
30%
40%
50%
Significanlydecrease
Slightlydecrease
Remain thesame
Slightly increase Significantlyincrease
2010 2011
Colorado Association of REALTORS® 2011 Survey 11
Do you expect 2011 days on market compared to 2010 to:
No significant difference
between 2010 and 2011
expectations
Source: Colorado Association of REALTORS®, Everitt Real Estate Center, March 2011
More transactions but more regulations
0
20
40
60
80
100
120
140
Propertytransactions
Foreclosures Short sales Regulatoryrestrictions
# R
esp
on
de
nts
Much less Less About the same More
Colorado Association of REALTORS® 2011 Survey
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Compared to 2010, what are your expectations in 2011 for the following in your local market and business:
Source: Colorado Association of REALTORS®, Everitt Real Estate Center, March 2011
Valuation issues major barrier to sales impacted
by distressed sales, sellers, and appraisals
0 50 100 150 200
Appraisal regulations (HVCC)
Closing due diligence
Seller value perception
Distressed sales
# Respondents
Harder to close sales No or limited impact Easier to close sales
Colorado Association of REALTORS® 2011 Survey
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Compared to 2010, how will the following factors impact your business in 2011
Source: Colorado Association of REALTORS®, Everitt Real Estate Center, March 2011
Buyer confidence and qualifications still highest hurdles
4.9
4.4
3.7
2.9
2.6
2.2
4.2
4.5
4.3
3.0
2.7
2.2
1 2 3 4 5
Interest rates
Advertising and marketing
Inadequate inventory
Impact of distressed sales
Buyer qualitifactions
Buyer confidence
Colorado Association of REALTORS® 2011 Survey
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Average barrier to sales scores
2011
2011
Source: Colorado Association of REALTORS®, Everitt Real Estate Center, March 2011
Hig
he
r b
arri
er
Green homes mystery for now, increasing importance,
but potential for education (standards too?)
0 50 100 150 200
Green homes are easier to market and sell
Demand for green homes will increase overthe next 5 years
Buyers understand the benefits of greenhomes
Green homes demand a premium
Underwriters and appraisers understandgreen home valuation methods
Strongly Agree
Agree
Neither Agree nor Disagree
Disagree
Strongly Disagree
Colorado Association of REALTORS® 2011 Survey
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Source: Colorado Association of REALTORS®, Everitt Real Estate Center, March 2011
Indicate if you agree or disagree with the following statements concerning 'green' homes
Skepticism with Fannie Mae and Freddie Mac proposed
changes
24.0%
53.0%
17.0%
5.0% 1.0%
0%
10%
20%
30%
40%
50%
60%
Much Worse Worse About theSame
Better Much Better
% R
esp
on
de
nts
Colorado Association of REALTORS® 2011 Survey
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Source: Colorado Association of REALTORS®, Everitt Real Estate Center, March 2011
Confidence
How will the proposed changes to scale back Fannie Mae and Freddie Mac impact the residential mortgage market in the future?
Approximately 75% believe MMDs impact
neighboring home values
38% 36%
19%
6%
0%
10%
20%
30%
40%
Significant negativeimpact
Limited impact No impact Not applicable
% R
esp
on
de
nts
Colorado Association of REALTORS® 2011 Survey
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How will residential-licensed medical marijuana dispensary (MMD) properties impact neighboring home values?
Source: Colorado Association of REALTORS®, Everitt Real Estate Center, March 2011
74%
Random respondents’ comments
Colorado Association of REALTORS® 2011 Survey
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Condo financing has been a huge hurdle so far this year. The condo market would likely recover much faster with more realistic underwriting standards.
Shadow inventory continues to loom over the market. Local banks are holding back the sale of REO properties, specifically vacant land.
The inability to obtain financing on resort condominiums.
Buyers contacting Realtors thinking they will qualify for a loan, especially if the home is distressed and they are contractors. They are
surprised that they can not get a loan and if they do the interest rate may be the same as a building loan and then they have to re-finance. Most people do not have the cash necessary to put down on homes, you wonder where they have been the last few years, totally clueless
about qualifying for a home loan.
Lack of new construction the past 3 years will impact available inventory. May help median sale price to recover, with less supply and more demand, but when it turns, we will be struggling for inventory.
The new HVCC regulations, increased government regulations and stricter lending policies by banks are having the most significant impact
on our market right now -- in a negative way.
Surveys and Realtors attitudes should reflect the truth-this is a great Buyer's market, especially for first time homebuyers. Stop spreading doom and gloom!
All new Mortgage regulations will have a significant negative impact on our residential business for at least 2 years. It will be much harder for
1st time buyers to come up with more down payment, and to pay more for Mortgage Insurance Premiums, while interest rates are
slowly creeping up at the same time.
A carpenter walks into the local bank and says, "Mr. V.P. , I'd like to get a loan to build a Spec House." The banker immediately called security and had him removed from the lobby.
Continuing, and unwarranted Government Regulations are basically all designed to "protect or help" the consumer, and are all instituted after the Horse is out of the barn. Let the markets regulated themselves. Fear and loathing among lending underwriters and government meddling are
problems! Unintended negative consequences are many and solid transactions are lost and investors are unfairly treated. The buyer pool is thereby reduced. REO properties are very poorly managed which results in loss of collateral and
negative impact on pricing for those properties and others. This is counterproductive to the recovery!
2011 Residential Survey Results
Additional Charts
Distributions of major barriers to sale rankings
0
20
40
60
80
100
120
Advertising andmarketing
Buyer confidence Buyerqualifications
Inadequateinventory
Impact ofdistressed sales
Interest rates
# R
esp
on
de
nts
1 2 3 4 5 6
Colorado Association of REALTORS® 2011 Survey
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Source: Colorado Association of REALTORS®, Everitt Real Estate Center, March 2011
Please rank the following factors in terms of major barriers to sales (1=highest, 6=lowest)
Distributions of marketing strategy rankings
0
10
20
30
40
50
60
70
Charity andvolunteer
work
Companywebsite
Direct mailand printed
media
MLS Phone calls Socialnetworks
1 2 3 4 5 6
Colorado Association of REALTORS® 2011 Survey
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Source: Colorado Association of REALTORS®, Everitt Real Estate Center, March 2011
Please rank the following items based on your marketing strategies (1=best, 6=worse)
For more information and research reports, go to http://www.realestate.colostate.edu
Colorado Association of REALTORS®
Everitt Real Estate Center
2011 Residential Survey Results