The NAR Chief Economist Lawrence Yun reported on the state of the housing market, the 2014 Home Buyers and Sellers Profile was released, Student Debt to be studied for impact on housing and WAV Group Study reveals brokers opinions on the future. See our snapshot below:
Student debt is an industry concern but NAR determined that the link between that debt and the ability to buy a home needs more research. The board set a policy that focuses on the continued monitoring of the issue along with support of legislative and regulatory efforts to promote education and disclosure requirements to help students.
NAR Released their 2014 Profile of Home Buyers and Sellers while at the conference.
For most home buyers, the purchase of real estate is one of the largest financial transactions they will make. Buyers purchase a home not only for the desire to own a home of their own, but also because of changes in jobs, family situations, and the need for a smaller or larger living area. This annual survey conducted by the NATIONAL ASSOCIATION OF REALTORS® of recent home buyers and sellers provides insight into detailed information about their experiences with this important transaction. Here are highlights from the latest report.
- Thirty-three percent of recent home buyers were first time buyers, which is still suppressed from the historical norm of 40 percent among primary residence buyers.
- Real estate agents were viewed as a useful information source by 98 percent of buyers who used an agent while searching for a home.
- The typical home buyer searched for 10 weeks and viewed 10 homes—this is two weeks shorter than the previous year’s report.
- Seventy percent of home sellers only contacted one agent before selecting the one to assist with their home sale.
- The share of home sellers who sold their home without the assistance of a real estate agent was nine percent. Forty-four percent knew the buyer prior to home purchase.
NAR Chief Economist Lawrence Yun’s Financial update: How’s the Economy?
The fourth quarter GDP is likely to grow at 2 to 2.5 percent, which is simultaneously good news and bad news. Good that the economy is in no danger of a fresh recession. Bad that economic growth is again slipping back down below 3 percent. Long periods of slow economic growth have consequences. Roughly speaking, $4,700 is missing from average American’s pocketbook. That is the gap between the potential GDP had the economy grown at the 3 percent historical growth rate versus what actually happened in nine straight years of sub-3 percent growth.
Real estate components slowed down in the latest quarter. Residential investment spending (from new home construction to real estate brokerage service) grew by only 1.9 percent, much slower than 9 percent gain in the prior quarter. Commercial real estate investment expanded by 5.5 percent in the latest quarter, slower than the 10 percent gain in the prior quarter. Difficulties in obtaining construction loans have resulted in slower than normal expansion in the real estate sector.
NAR released median home price information that showed gains of 5.9 percent in September 2014 home prices compared to September 2013. The FHFA released their housing price index data for August. FHFA’s data, like NAR’s, showed continued but decelerating home price gains. FHFA estimated growth of 4.8 percent for the year ending August 2014. Read the full Report
WAV Group Study
In a study commission by WAV Group, real estate leaders share 2015 outlook on housing and the economy. There was representation by all sizes of firms and collectively the findings were compiled into an interesting info graphic, see below.
Among the findings, “housing market enthusiasm is cooling, almost tepid, among real estate leaders” the report reads. “Two years ago, 70 percent of top real estate execs saw the market improving over the next 12 months. Last year that number dropped to 58 percent. Today it is 52 percent.” The report did find that size matters… at least in terms of outlook. The larger firms had a better outlook than the smaller brokerages on profitability in the next 12 months. Real estate leaders are still divided on U.S. economic outlook. See more at: http://waves.wavgroup.com/2014/11/06/real-estate-leaders-share-2015-outlook-on-housing-economy/#sthash.OWnqbDTw.dpuf