The REALTORS® Confidence Index (RCI) Report provides monthly information about real estate market conditions and expectations, buyer/seller traffic, price trends, buyer profiles, and issues affecting real estate based on data collected in a monthly survey of REALTORS®.
The September 2014 report is based on the responses of 4,067 REALTORS® about their transactions in September 2014.1
Responses were received from October 2-9, 2014. Questions about the characteristics of the buyer and the sale are based on the respondent’s last transaction for September which, on a combined basis, are viewed to be representative of the sales for the month. All real estate is local: conditions in specific markets may vary from the overall national trends presented in this report.
The Report also contains commentaries by the Research Department on recent economic data releases and policies affecting housing.
Lawrence Yun, Senior Vice President and Chief Economist
Jed Smith, Managing Director, Quantitative Research
Gay Cororaton, Research Economist
Meredith Dunn, Research Communications Manager
REALTORS®’ assessment of market conditions in September and their outlook for the next six months turned less sanguine in September compared to August.
The confidence indexes for current conditions and the six-month outlook and the buyer and seller traffic indexes declined in September compared to August and the same month last year. REALTORS® continued to report about the difficulty of qualifying for a loan under more stringent credit eligibility standards. Although mortgage rates continue to be the lowest in decades and homes are still more affordable today compared to the years prior to the Great Recession, REALTORS® reported that there are fewer “affordable” homes for sale for the first-time buyer. Adding an extra financial burden is the effective increase in insurance payments for FHA-insured loans.
Obtaining FHA financing for condominiums that are the entry points for home ownership has also remained a challenge. Also, there are now fewer distressed properties on the market.
Given all of these factors, first-time home buyers continued to account for less than a third of the market. With prices rising faster than rents, the share of sales for investment purposes continued to come below last year’s levels. With more inventory from new construction, listings of existing homes stayed longer on the market. REALTOR® respondents expected a modest price increase in the coming 12 months. The uncertainty about the flood insurance rate increase continued to hold down activity in coastal states.
REALTORS® Confidence Dipped in September 2014
REALTORS® increasingly reported a weakening of current market conditions across all property types in September 2014 compared to August 2014 . Respondents noted that the market typically perks up in September after a seasonal slack in preparation for the school opening, but reports indicated a flatter rebound this year. In the single family market, the REALTORS®
Confidence Index – Current Conditions for single family homes dipped to 51 (60 in August). An index above 50 indicates that there are more respondents who viewed their markets as “strong” compared to those who view them as “weak.”
Confidence about the outlook for the next six months also broadly weakened in September compared to August. The REALTORS® Confidence Index – Six-month Outlook Index for single family homes fell to 53 (61 in August). The indexes for townhouses and condominiums, which are at levels below 50, slid further down.
What Does All this Mean?
I’ve read this information cover to cover and what I’ve always taken away for any “National Report” is real estate is a local business so an overview like this can be…and should be…looked at more from a street level perspective and less from a 30,000 birds eye view! Certainly, we are all very interested in seeing the market maintain it’s steady climb and yet none of us want to go through what we went through starting in 2007-2008!
It’s been a while since we’ve seen a normal, steady market and with the extremes over the last 7 years still fresh in our minds, my suggestion is we all take a long look at what got us here, be mindful of what it will take to keep us here and most importantly…don’t let the greed and the irresponsibility of what happened before ever happen again!!!
All information for this post was taken from the The REALTORS® Confidence Index (RCI) Report. I want to attribute the findings and all information exclusively to that report.
I am passionate about Real Estate and eager to answer all of your real estate questions! Text or Call me at 360-880-2356 or email me directly to ask about Buying, Selling or Investing in today's Real Estate Market - serving Lewis County & Thurston County, WA.
Certified Residential Specialist | Real
Mountain Valley Real Estate