realtors report on the august 2016 survey · 2016-09-22 · realtors® confidence index survey ....
TRANSCRIPT
REALTORS® CONFIDENCE INDEX SURVEY Report on the August 2016 Survey
The REALTORS® Confidence Index (RCI) report provides monthly information about real estate market conditions and expectations, buyer/seller traffic, price trends, buyers’ characteristics, and issues affecting real estate transactions based on a monthly survey of REALTORS®.
The August 2016 report is based on the responses of 3,270 REALTORS®, 1,936 of which closed a sale.1 Respondents reported on local market conditions experienced in August and the characteristics of their most recent sale for the month. The data is collected from a random sample of REALTORS® and is viewed to be representative of the sales for the month. The online survey was conducted from September 1–13, 2016. All real estate is local: conditions in specific markets vary from the overall national trends presented in this report. REALTORS® may be interested in comparing their markets against the national summary.
The RCI report is an output of the Research Division of the NATIONAL ASSOCIATION of REALTORS®.2 For questions or information about this report, please email [email protected]. Lawrence Yun, Senior Vice President and Chief Economist Danielle Hale, Managing Director, Housing Research Gay Cororaton, Research Economist Meredith Dunn, Research Communications Manager
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 The team acknowledges Jessica Lautz, Managing Director, Survey Research and Communications, Meredith Dunn, Research Communications Manager, Amanda Riggs, Research Survey Analyst, and Brandi Snowden, Research Survey Analyst, for their inputs in improving the survey and in editing and disseminating the report. Acknowledgement also goes to Lisa Herceg, Director, Marketing Research, who sends out the survey to members.
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Table of Contents
Summary .................................................................................................................................................... 3
I. Market Conditions ............................................................................................................................ 4
REALTORS® Reported Strong Buyer Traffic Amid Tight Supply ......................................................... 4
REALTORS® Largely Reported Strong Market Activity in August 2016 .............................................. 6
REALTORS® Are Generally Optimistic Over the Next Six Months ...................................................... 7
REALTORS® Expect Slower Price Growth in Next 12 Months ............................................................. 9
Properties Typically on the Market for 36 Days ..................................................................................... 13
II. Buyer and Seller Characteristics ......................................................................................................... 17
Sales to First-Time Buyers: 31 Percent of Sales ..................................................................................... 17
Sales for Investment Purposes: 13 Percent of Sales .............................................................................. 19
Distressed Sales: Five Percent of Sales................................................................................................... 20
Cash Sales: 22 Percent of Sales .............................................................................................................. 20
Buyer Downpayments ............................................................................................................................. 21
III. Issues Affecting Transactions ............................................................................................................ 23
Contract Settlement: Financing, Home Inspection, and Appraisals are Major Issues ............................ 23
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Summary
While local conditions vary, the REALTORS® buyer traffic and current conditions confidence indices remained above 50 in August 2016, indicating that more local markets were “strong” rather than “weak.” The buyer traffic index, an indicator of homebuying interest, stood at about the same level as last year but was lower than the previous month’s level, perhaps reflecting some seasonal slowdown as well as an easing of demand due to the steep price growth that has made purchasing a home increasingly less affordable.3 The seller traffic index has remained below 50 since September 2008, indicating that seller activity remains generally “weak.” Relatively strong demand amid tight supply has pushed prices up to increasingly less affordable levels.
First-time homebuyers accounted for 31 percent of sales, essentially unchanged from its levels one year ago and the previous month. Purchases for investment purposes made up 13 percent of sales, and cash sales accounted for 22 percent of sales, both substantially unchanged from the levels one year ago and the previous month. Distressed properties were five percent of sales, down from seven percent last year. Nationally, amid tight supply, half of properties that sold in August 2016 were on the market for 36 days or less compared to 47 days one year ago.
Very low supply, declining affordability, appraisal issues, and lender processing delays were reported as the key issues affecting sales. Still, most respondents were confident about the outlook for the next six months across all property types, with the six-month confidence indices for single-family homes and townhomes registering over 50. With home prices increasingly becoming less affordable, respondents typically expected prices to increase at a slower pace of 3.1 percent in the next 12 months.
August 2016 REALTORS® Confidence Index Survey Highlights August 2016 July 2016 August 2015 RCI Buyer Traffic Index 61 64 60 RCI Seller Traffic Index 44 45 45 RCI Current Conditions: Single-Family Sales 69 71 66 RCI Six-Month Outlook: Single-Family Sales 66 69 66 First-Time Home Buyers, as Percent of Sales4 31 32 32 Sales to Investors, as Percent of Sales 13 11 12 Cash Sales, as Percent of Sales 22 21 22 Distressed Sales, as Percent of Sales 5 5 7 Median Days on Market 36 36 47 Median Expected Price Growth in Next 12 Months (%) 3.1 3.3 3.5
3 An index greater than 50 indicates the number of respondents who reported “strong” (index=100) outnumbered those who reported “weak” (index=0). An index equal to 50 indicates an equal number of respondents reporting “strong” and “weak” market conditions. The index is not adjusted for seasonality effects. 4 NAR’s 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.
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I. Market Conditions REALTORS® Reported Strong Buyer Traffic Amid Tight Supply
The REALTORS® Buyer Traffic Index5 registered at 61(64 in July 2016; 60 in August 2015), indicating that more respondents viewed buyer traffic conditions as “strong” rather than “weak.” The index is essentially unchanged compared to one year ago, but it is lower compared to the previous month, possibly due to seasonal slowdown and the impact of higher prices on demand. Meanwhile, supply conditions remained, by and large, tight in many areas. The REALTORS® Seller Traffic Index registered at 44 (45 in July 2016; 45 in August 2015), indicating that more respondents viewed seller traffic conditions as “weak” rather than “strong.”
Local conditions vary in each state, but the REALTORS® Buyer Traffic Index indicates that markets were “moderate” to “very strong” in all states except in Wyoming, North Dakota, and Connecticut where buyer traffic was “weak.”6
5The Buyer Traffic Index provides information on the level of homebuying demand or interest which may materialize as a contract to purchase or closed sale after two or three months. 6 The index 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 fewer than 30 observations. 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?” Respondents rated conditions or expectations as “Strong (100),” “Moderate (50),” and “Weak (0).” The responses are compiled into a diffusion index. For graphical purposes, index values 25 and lower are labeled “Very weak,” values greater than 25 to 48 are labeled “Weak,” values greater than 48 to 52 are labeled “Moderate,” values greater than 52 to 75 are labeled “Strong,” and values greater than 76 are labeled “Very strong.”
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REALTORS® Buyer and Seller Traffic Indexes as of August 2016
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Buyer Traffic Index Seller Traffic Index
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Seller traffic was “weak” in many states, measured by the REALTORS® Seller Traffic Index.7 However, seller traffic was “moderate” to “strong” in several states, including those that had benefited from the oil boom but are now facing slower job growth because of lingering lower oil and natural resources prices—Alaska, Montana, North Dakota, New Mexico, Texas, and Louisiana.
7 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?” Respondents rated conditions or expectations as “Strong (100),” “Moderate (50),” and “Weak (0).” The responses are compiled into a diffusion index. A value of 50 indicates a balance of respondents who reported “Strong “and “Weak” markets. For graphical purposes, index values 25 and lower are labeled “Very weak,” values greater than 25 to 48 are labeled “Weak,” values greater than 48 to 52 are labeled “Moderate,” values greater than 52 to 75 are labeled “Strong,” and values greater than 76 are labeled “Very strong.”
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Employment conditions affect the demand and supply for housing. The chart that follows shows the change in non-farm employment in July 2016 from July 2015 by state. Non-farm employment contracted in the oil-producing states of North Dakota, Wyoming, Oklahoma, and Louisiana and increased only modestly in several other natural resources states in the Midwest and South.8 The slower job growth and job cutbacks in these states are likely leading to more seller traffic and a shift to a buyer’s market.9 Meanwhile, several other oil-states such as Utah, Colorado, Texas, and New Mexico have job growth near to or above the national average. Employment growth was strongest in Washington, Oregon, Idaho, Utah, Colorado, and Florida. Buyer traffic was “strong” to “very strong” in these states.
REALTORS® Largely Reported Strong Market Activity in August 2016 The REALTORS® Confidence Index—Current Conditions indices for single-family homes and townhomes each registered at 50 or above in August 2016 and were higher in August 2016 compared to one year ago.10 However, the indices are lower compared to July 2016, possibly due to seasonality effects.
8 For a review of states in which oil has an outsized economic impact, see this blog: http://economistsoutlook.blogs.realtor.org/2016/03/21/is-california-an-oil-producing-state/ 9 https://communityimpact.com/houston/the-woodlands/economic-development/2015/12/09/falling-oil-prices-starting-to-affect-woodlands-economy/; http://www.theatlantic.com/business/archive/2015/06/north-dakota-oil-boom-bust/396620/ 10 Respondents are asked “How would you describe the current housing market where you make most of your sales? For single-family homes? Townhomes? Condominiums?” The responses for each type of property are compiled into an index. 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 seasonal factors.
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REALTORS® Are Generally Optimistic Over the Next Six Months The REALTORS® Confidence Index—Six-Month Outlook for single-family homes and townhomes both registered above 50, indicating that more REALTORS® expected market conditions to be “strong” than “weak” over the next six months.11 The index for condominiums dipped below 50, but remains above the 45 level registered at this time in 2015. The approval of H.R. 3700, the “Housing Opportunity Through Modernization Act of 2016,” likely contributed to the year over year improvement. 12 Among other measures, the law eases access to FHA condominium financing by reducing the FHA condo owner occupancy ratio from 50 percent to 35 percent, directing the FHA to streamline the condominium re-certification process, and providing more flexibility for mixed-use buildings.
In the single-family homes market, the market outlook in the next six months is “strong” to “very strong” in almost all states.13 In the townhomes markets, the outlook is more mixed in a narrow range, ranging from “weak” to “strong.” The condominium market shows the most variability with the outlook ranging from “very weak” to “very strong” across the fifty states and District of Columbia.
11 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?” The responses for each type of property are compiled into an index. 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. 12The bill, which was championed by NAR, passed the House of Representatives 427-0 and the Senate under unanimous consent on August 14, 2016 and was signed by President Obama on August 29, 2016. See http://www.realtor.org/articles/president-obama-signs-hr-3700 13 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 fewer than 30 observations. Respondents rated conditions or expectations as “Strong (100),” “Moderate (50),” and “Weak (0).” The responses are compiled into a diffusion index. A diffusion index greater than 50 means that more respondents rated conditions as “Strong” than “Weak.” For graphical purposes, index values 25 and lower are labeled “Very weak,” values greater than 25 to 48 are labeled “Weak,” values greater than 48 to 52 are labeled “Moderate,” values greater than 52 to 75 are labeled “Strong,” and values greater than 76 are labeled “Very strong.”
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REALTORS® Confidence Index—Current Conditions as of August 2016
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REALTORS® Confidence Index—Six-Month Outlook as of August 2016
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REALTORS® Expect Slower Price Growth in Next 12 Months With prices having increased steeply since 2011, REALTORS® expect prices to grow at a slower pace in the next 12 months, with half of the respondents expecting home prices to increase by 3.1 percent or less.
9
The map below shows the median expected price change in the next 12 months among REALTORS® who responded to the June–August 2016 RCI surveys. Price expectations vary by area, and the median expected price change is a measure that represents the middle value of the distribution of responses. The areas of strongest expected price growth are in the District of Columbia and Washington, where the median expected price growth was more than five to six percent. REALTOR® respondents from Oregon, Colorado, Tennessee, South Carolina, and Florida also expected strong price growth of greater than four to five percent.
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Median Expected Price Change for Next 12 Months Among REALTOR® Respondents as of August 2016
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In many states, REALTORS® expect prices to increase but at a slower pace in the next 12 months than was expected in previous months.14
14 The data shown here are states with observations of about at least 150 over the rolling three-month period.
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Properties Typically on the Market for 36 Days Properties stayed on the market for fewer days in August 2016 compared to one year ago amid strong demand and tight supply. Nationally, properties sold in August 2016 were typically on the market for 36 days (36 days in July 2016; 47 days in August 2015).11 Short sales were on the market for the longest time at 144 days, while foreclosed properties typically stayed on the market for 42 days. Non-distressed properties were typically on the market for only 35 days.
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 buyer’s offer?” The median is the number of days at which half of the properties stayed on the market. In generating the median days on market 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 fewer than 30 observations.
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Median Days on Market of Sales Reported by REALTOR® Respondents as of August 2016
All Foreclosed Short sale Non-distressed
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Nationally, 46 percent of properties were on the market for less than a month15. Only nine percent of properties were on the market for six months or longer.
Half of the properties that sold in June–August 2016 were on the market for less than 31 days in many states. Looking at changes in this value over the last few years, in most states, the median length of time that properties stay on the market continues to fall, amid tight inventory conditions. Local conditions vary, and the data is provided for REALTORS® who want to compare local markets against other states and the national summary.
15 Days on market usually refers to the time period from listing date to contract date.
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Percentage Distribution of Time on Market of Sales Reported by REALTOR® Respondents as of August 2016
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Median Days on Market of Sales Reported by REALTORS® in Some South States
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II. Buyer and Seller Characteristics Sales to First-Time Buyers: 31 Percent of Sales The share of first-time home buyers accounted for 31 percent of residential sales in August 2016 (32 percent in July 2016; 32 percent in August 2015).12 Sustained job creation, historically low mortgage rates, and measures to loosen credit are conditions that are helpful to first-time buyers. However, tight supply and relatively stringent credit standards continue to make it challenging for first-time borrowers. According to NAR’s 2016 Q3 Housing Opportunities and Market Experience (HOME) Survey, 65 percent of consumers who do not currently own a home think it would be difficult to qualify for a mortgage given their current financial situation.16 Low downpayment loans are available, but some buyers may want to save for a bigger downpayment to save on mortgage insurance premium payments and avoid the increased mortgage payment that comes with a lower downpayment.
12 First-time buyers accounted for about 32 percent of all home buyers based on data from NAR’s 2015 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. 16 See: http://www.realtor.org/reports/2016-q3-homeownership-opportunities-and-market-experience-home-survey. Results are given for those who do not own a home and indicate that it would be “somewhat difficult” or “very difficult” to qualify for a mortgage given their current financial situation.
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504
2015
05-2
0150
720
1508
-201
510
2015
11-2
0160
120
1602
-201
604
2016
05-2
0160
7
Median Days on Market of Sales Reported by REALTORS® in Some Northeast States
MA
NJ
NY
PA
17
Buyers 34 years old and under, who are likely to be first-time buyers, accounted for 28 percent of residential buyers in August 2016, (30 percent in July 2016; 29 percent in August 2015). This slight decrease in the share of younger buyers from recent months was made up by a slight increase in the share among middle-aged buyers.
Homebuyers who were renting prior to their recent home purchase accounted for 39 percent of sales (41 percent in July 2016; 38 percent in August 2015). The slight decline in buying by previous renters was coupled with an increase in buyers who previously owned their home.
31%
0%
10%
20%
30%
40%
50%
60%
2008
1020
0902
2009
0620
0910
2010
0220
1006
2010
1020
1102
2011
0620
1110
2012
0220
1206
2012
1020
1302
2013
0620
1310
2014
0220
1406
2014
1020
1502
2015
0620
1510
2016
0220
1606
First-time Buyers as Percent of Residential Market as of August 2016
28%
52%
21%
0%10%20%30%40%50%60%
2013
07
2013
11
2014
07
2014
09
2014
11
2015
01
2015
03
2015
05
2015
07
2015
09
2015
11
2016
01
2016
03
2016
05
2016
07
Age Distribution of Buyers for Sales Reported by REALTOR® Respondents as of August 2016
Age 34 and under Age 35 to 55 Age 56 and over
18
Sales for Investment Purposes: 13 Percent of Sales Investment sales made up 13 percent of sales (11 percent in July 2016; 12 percent in August 2015). At their peak in 2009, investment sales were 25 percent of sales. Purchases for investment purposes have generally been on the decline with fewer distressed sales on the market and with home prices rising to levels that make the purchase less attractive as an investment. Low mortgage rates are less of a benefit to investors since many of them use cash to purchase a home.17
17 See page 18, section on Cash Sales.
39%
52%
8%
0%
20%
40%
60%
2014
08
2014
10
2014
12
2015
02
2015
04
2015
06
2015
08
2015
10
2015
12
2016
02
2016
04
2016
06
2016
08
Living Status of Homebuyers at Time of Home Purchase as of August 2016
Rents an apartment or houseLives in own homeLives with parents, relatives, or friends
13%
0%
5%
10%
15%
20%
25%
30%
2008
1020
0902
2009
0620
0910
2010
0220
1006
2010
1020
1102
2011
0620
1110
2012
0220
1206
2012
1020
1302
2013
0620
1310
2014
0220
1406
2014
1020
1502
2015
0620
1510
2016
0220
1606
Sales for Investment Purpose as Percent of Residential Sales as of August 2016
19
Distressed Sales: Five Percent of Sales Distressed sales accounted for five percent of sales (five percent in July 2016; seven percent in August 2015). Foreclosed properties were four percent of residential sales, while short sales were only one percent of residential sales.13 With rising home values and fewer foreclosures, the share of sales of distressed properties has generally continued to decline. Distressed sales accounted for about a third to half of sales until 2012 when they began to fall below this level.
Cash Sales: 22 Percent of Sales Purchases that were financed with cash were 22 percent of sales (21 percent in July 2016; 22 percent in August 2015). Buyers of homes for investment purposes, second homes, and foreign clients are more likely to pay cash than first-time home buyers. As the shares of investment and distressed sales to total sales have declined, so has the share of cash sales.
13 The survey asks respondents who had a sale in the month to report on the characteristics of the most recent sale closed.
0%
10%
20%
30%
40%
50%
60%
2008
1020
0902
2009
0620
0910
2010
0220
1006
2010
1020
1102
2011
0620
1110
2012
0220
1206
2012
1020
1302
2013
0620
1310
2014
0220
1406
2014
1020
1502
2015
0620
1510
2016
0220
1606
Distressed Sales as Percent of Residential Sales as of August 2016
Foreclosed Short sale
Foreclosed: 4% Short sale: 1%
20
Buyer Downpayments
Among all buyers who are financing a home purchase, 39 percent made a downpayment of at least 20 percent, a share that has remained about the same since NAR began collecting this information in 2011.
22%
0%5%
10%15%20%25%30%35%40%
2008
1020
0902
2009
0620
0910
2010
0220
1006
2010
1020
1102
2011
0620
1110
2012
0220
1206
2012
1020
1302
2013
0620
1310
2014
0220
1406
2014
1020
1502
2015
0620
1510
2016
0220
1606
Cash Sales as Percent of Residential Sales as of August 2016
68% 62%
47% 46%
14% 7%
0%10%20%30%40%50%60%70%80%
International Investor Second home Distressedsale
Relocation First-timebuyer
Percent of All-Cash Sales By Type of Buyer in August 2016
*The RCI survey captures only non-U.S. citizens whose permanent residence is in another country (Type A). NAR has a separate survey on foreign buyers that captures both Type A buyers and non-U.S. citizens who reside in the United States on work, student, or other types of visas (Type B).
21
Among sales to first-time buyers who purchased a property in June–August 2016 and who obtained a mortgage, 66 percent made a downpayment of zero to six percent (68 percent in July 2016; 67 percent in August 2015). In June 2009 when NAR first collected this information, 74 percent of first-time homebuyers obtained loans with a zero to six percent downpayment. Recent moves have been implemented to make credit more widely available such as FHA’s reduction of its annual mortgage insurance premiums and the acceptance of GSEs of three percent downpayment mortgages. However, these measures do not appear to have made a significant impact on attracting first-time homebuyers, perhaps due to lack of information about these products. In fact, NAR’s 2016 Q3 Housing Opportunities and Market Experience (HOME) Survey found that 37 percent of those aged 34 or under believe that they need more than 20 percent for a downpayment while only 13 percent believe they need a downpayment of five percent or less.18 Additionally, although low downpayment loans are available, some buyers may want to save for a bigger downpayment to save on mortgage insurance premium payments and to avoid the cost that comes with making a lower downpayment.
18 See: http://www.realtor.org/reports/2016-q3-homeownership-opportunities-and-market-experience-home-survey.
39%
0%
10%
20%
30%
40%
50%
2011
0420
1107
2011
1020
1201
2012
0420
1207
2012
1020
1301
2013
0420
1307
2013
1020
1401
2014
0420
1407
2014
1020
1501
2015
0420
1507
2015
1020
1601
2016
0420
1607
Percent of Mortgage Sales With Downpayment of At Least 20 Percent as of August 2016
22
III. Issues Affecting Transactions
Contract Settlement: Financing, Home Inspection, and Appraisals are Major Issues In reporting on their last contract that went into settlement or was terminated over the period June–August 2016, respondents indicated that 64 percent of contracts were settled on time, 30 percent had delayed settlement, and six percent were terminated.
66%
50%55%60%65%70%75%80%85%90%
2009
0620
0912
2010
0420
1008
2010
1220
1104
2011
0820
1112
2012
0420
1208
2012
1220
1304
2013
0820
1312
2014
0420
1408
2014
1220
1504
2015
0820
1512
2016
0420
1608
Share of First-time Buyers Obtaining a Mortgage Who Put in a Zero to Six Percent Downpayment as of August 2016*
*The data reported for the month is a rolling three-month figure.
64%
30% 6%
2015
01-2
0150
3
2015
02-2
0150
4
2015
03-2
0150
5
2015
04-2
0150
6
2015
05-2
0150
7
2015
06-2
0150
8
2015
07-2
0150
9
2015
08-2
0151
0
2015
09-2
0151
1
2015
10-2
0151
2
2015
11-2
0160
1
2015
12-2
0160
2
2016
01-2
0160
3
2016
02-2
0160
4
2016
03-2
0160
5
2016
04-2
0160
6
2016
05-2
0160
7
2016
06-2
0160
8
0%20%40%60%80%
100%
How Sales Contracts Were Settled
Contract was terminatedContract was delayed but eventually went into settlementContract was settled on time
* Based on the respondent's most recent contract that went into settlement or was terminated during this three-month period.
23
Among contracts that had a delayed settlement (30 percent), issues related to obtaining financing, appraisal, and home inspection were the primary causes of the delay. The fraction of delays due to appraisals has increased in recent months, in part due to a shortage of appraisers and other issues reported by REALTORS® (e.g., being asked to make “inspections”).19
19 Danielle Hale, “Concern about Fast-Rising Prices, or Overworked Appraisers?” http://economistsoutlook.blogs.realtor.org/2016/08/24/concern-about-fast-rising-prices-or-overworked-appraisers/
45% 23%
12% 8%
7% 4%
4% 2%
0% 22%
Issues related to obtaining financingAppraisal issues
Home inspection/environmental issuesTitling/deed issues
Contingencies stated in the contractIssues in buy/sell distressed property
No problems encounteredHome/hazard/flood insurance issues
Buyer lost jobOther
Problems Encountered for Contracts That Were Delayed But Eventually Went Into Settlement in June–August 2016*
(Delayed Contracts Represent 30 Percent of Closed or Terminated Contracts)
*Based on the respondent's most recent contract that went into settlement or was terminated during this period. Percentages 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, delays related to complying with regulation, etc.
18% 21% 16%
23% 22% 21% 21% 21% 18% 18% 16% 18%
22% 23% 27% 27%
23%
Among Contracts That Had Delayed Settlement, Percent of Contracts with Issues Related to Appraisal
24
Among contracts that were terminated (six percent), issues related to home inspections, obtaining financing, and appraisals were the major causes of termination.
26% 22%
11% 7% 7%
4% 3%
3% 2%
29%
Home inspection/environmental issuesIssues related to obtaining financing
Appraisal issuesContingencies stated in the contract
No problems encounteredTitling/deed issues
Home/hazard/flood insurance issuesIssues in buy/sell distressed property
Buyer lost jobOther
Problems Encountered for Contracts That Were Terminated in June–August 2016*
(Terminated Contracts Represent Six Percent of Closed or Terminated Contracts)
*Based on the respondent's most recent contract that went into settlement or was terminated during this period. Percentages 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.
25
The NATIONAL ASSOCIATION of REALTORS®, “The Voice for Real Estate,” is America’s largest trade association, representing over 1 million members, including NAR’s institutes, societies, and councils, involved in all aspects of the real estate industry. NAR membership includes brokers, salespeople, property managers, appraisers, counselors and others engaged in both residential and commercial real estate. The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics. Working for America's property owners, the National Association provides a facility for professional development, research, and exchange of information among its members, and to the public and government for the purpose of preserving the free enterprise system and the right to own real property. The Mission of the NATIONAL ASSOCIATION of REALTORS® Research Division is to collect and disseminate timely, accurate, and comprehensive real estate data and to conduct economic analysis in order to inform and engage members, consumers, policy makers, and the media in a professional and accessible manner. To find out about other products from NAR’s Research Division, visit www.REALTOR.org/research-and-statistics Also follow NAR Research on
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NATIONAL ASSOCIATION of REALTORS® Research Division 500 New Jersey Avenue, NW Washington, DC 20001 202.383.1000
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