REALTORS® Confidence Index Survey: December 2018 Highlights

REALTORS® Confidence Index Survey: December 2018 Highlights

The REALTORS® Confidence Index (RCI)[1] survey gathers monthly information from REALTORS® about local real estate market conditions, characteristics of buyers and sellers, and issues affecting homeownership and real estate transactions.[2] This report presents key results about market transactions from December 2018. View and download the full report here.

Market Conditions and Expectations

  • The REALTORS® Buyer Traffic Index registered at 48 (66 in December 2017).[3]
  • The REALTORS® Seller Traffic Index registered at 39 (47 in December 2017).
  • The REALTORS® Confidence Index—SixMonth Outlook Current Conditions registered at 59 for detached single-family, 48 for townhome, and 46 for condominium properties. An index above 50 indicates market conditions are expected to improve.
  • Properties were typically on the market for 46 days (40 days in December 2017).
  • Seventy-five percent of respondents reported that home prices remained constant or rose in December 2018 compared to levels one year ago (90 percent in December 2017).
Realtors Buyer and Seller Traffic Indices

Characteristics of Buyers and Sellers

  • First-time buyers accounted for 32 percent of sales (32 percent in December 2017).
  • Vacation and investment buyers comprised 13 percent of sales (16 percent in December 2017).
  • Sales of distressed properties (foreclosed or sold as a short sale) accounted for two percent of sales (five percent in December 2017).
  • Cash sales made up 22 percent of sales (20 percent in December 2017).
  • Twenty-two percent of sellers offered incentives such as paying for closing costs (10 percent), providing warranty (9 percent), and undertaking remodeling (3 percent).[4]
First-Time Buyers As Percentage of Residential Sales

Issues Affecting Buyers and Sellers

  • From October–December 2018, 75 percent of contracts settled on time (71 percent in December 2017).
  • Among sales that closed in December 2018, 74 percent had contract contingencies. The most common contingencies pertained to home inspection (54 percent), obtaining financing (45 percent), and getting an acceptable appraisal (42 percent).
  • REALTORS® report “interest rate” and “low inventory” as the major issues affecting transactions in December 2018.
REALTOR® CONCERNS

About the RCI Survey

  • The RCI Survey gathers information from REALTORS® about local market conditions based on their client interactions and the characteristics of their most recent sales for the month.
  • The December 2018 survey was sent to 50,000 REALTORS® who were selected from NAR’s more than 1.3 million members through simple random sampling and to 9,600 respondents in the previous three surveys who provided their email addresses.
  • There were 5,886 respondents to the online survey which ran from January 2-11, 2019. The survey’s overall margin of error at the 95 percent confidence level is one percent. The margins of error for subgroups and sample proportions of below or above 50 percent are larger.
  • NAR weighs the responses by a factor that aligns the sample distribution of responses to the distribution of NAR membership.

The REALTORS® Confidence Index is provided by NAR solely for use as a reference. Resale of any part of this data is prohibited without NAR’s prior written consent. For questions on this report or to purchase the RCI series, please email: Data@realtors.org


[1] Thanks to George Ratiu, Managing Director, Housing and Commercial Research and Gay Cororaton, Research Economist for their data analysis and comments to the RCI Report.

[2] Respondents report on the most recent characteristics of their most recent sale for the month.

[3] An index greater than 50 means more respondents reported conditions as “strong” compared to one year ago than “weak.” An index of 50 indicates a balance of respondents

who viewed conditions as “strong” or “weak.”

[4] The difference in the sum of percentages to the total percentage of sellers who offered incentives is due to rounding.

Throwback Thursday: First-Time Homebuyers Then and Now

Throwback Thursday: First-Time Homebuyers Then and Now

In 1981 when NAR first started tracking the data, the average age of a first-time homebuyer was 29.  They made up 44 percent of all homebuyers.  Sixty-eight percent of first-time buyers were married couples, 12 percent were single female and 13 percent were single male (seven percent were other).

In contrast, in 2018, the average age of a first-time homebuyer was 46 and they accounted for 33 percent of all homebuyers.  Fifty-four percent were married couples, 18 percent were single female, 10 percent were single male, and 16 percent were unmarried couples (two percent were other).

In 1989, first-time buyers largely rented an apartment before they bought their home at 80 percent, and 15 percent lived with parents, relatives, or friends.  In 2018, the share of first-time buyers that lived in an apartment before they bought their home slipped to 71 percent while the share of those that had been living with parents, relatives, or friends previous to buying rose to 23 percent.

3 Reasons you should buy a house now.

3 Reasons you should buy a house now.

One of the most common questions I get ask is “How is the market?”, and I normally answer “It depends”. Many times this gets people confused and seems like a sales answer, but it really depends.

When someone is telling a story about a restaurant they visited, what is the most common question? “How was the food?”, right? It depends. Some people may love it, while others would never go to the place. The same thing is with the real estate market. It depends on whether you are looking to buy or sell, in what area, the price range, fixer-upper or turn key…All this factors into how to get a straight answer.

Over the last few years, the market was great for most sellers, but for buyers, not so much. There were not enough choices, and even when you found a house, there were sometimes dozens of other buyers making an offer on the same house. Anyone considering buying a house was very frustrated. However, we know that market is cyclical and eventually it will level off. Good news for all the buyers, that level is happening right now.

Here are the 3 reasons you should buy a house now.

  1. Relatively high inventory. Over the last few years, the DFW area has seen tremendous growth. More people moving to the area needing a place caused the shortage of inventory. It took a few years, but this year it has finally caught up, and there are more homes available for sale. Better yet, now you have more choices on new homes as well (little secret: builders are more willing to negotiate).
  2. Low interest rate. In January of this year (2018), the interest rate was 4.03% (FreddieMac). By July the rate went up to 4.53%, only a .5% difference. However, on a $300,000 loan that would translate about $88/mo PI extra (Principal and Interested). Applying that extra to your payment at a lower interest, you would pay off your mortgage about 3.5 years sooner. Most lenders I have spoken to are predicting that the rate will go up another .5-1% in the next year.
  3. Less competition. Most homes are sold in the summer months, that’s when the competition is the strongest. This competition drives the prices up too. However, as the school year starts, many buyers put off moving to the next year. This is the right opportunity for you as a buyer, as you won’t have as much competition from other buyers driving the price up.

Please note that this may not apply to all markets and situations. Its best to talk to your trusted Real Estate agent, Lender, or Financial advisor.

Lastly, if you want to lower your tax burden and increase your net worth, according to many economist and financial advisors, owning real estate is about the best thing you can invest in. Ever wonder why wealthy people own so many homes?

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