RE Confidence Index Up 0.87% in April
Point2 Technologies (“Point2”) today released the results from its Real Estate Confidence Index (“RECI”) survey for the month of April that indicate improved market conditions and forward looking sentiment amongst real estate brokers and agents around the United States, versus last month, with uncertainty over the longer term weighing in on the Index.
The RECI, a real estate market leading indicator that tracks broker and agent forward looking confidence and market opinion nationwide rose for the second month in a row.
For April 2010, the RECI recorded a 5.82 (+0.87 %) reading on the RECI scale of 1 – 10 (1 being ‘bad’ and 10 being ‘good’), up from 5.77 in March (+2.49%).
March results were underscored by a jump of 27 percent in New Home Sales for that month, as reported by the Commerce Department last week, and a 6.8 percent rise in Existing Home Sales, according to the National Association of REALTORS’® report also released this month.
The Current Sentiment variable within the RECI, one of three components that make up the monthly Index, rose to 5.30 (+5.16%) for the April period. Positive sentiment amongst survey respondents was fueled by improved current market conditions, with increased sales activity in the low to mid price range properties category remaining the common denominator.
RECI survey participants pointed to the looming tax credit expiry on April 30, 2010 as the key driver for increased sales, with more agents in more states including Florida, California and Hawaii reporting multiple offer and bidding war occurrences than last month. Some sales professionals also cited increased investor activity.
The current federal government program offers home rebates of US $8,000 for new home buyers and US $6,500 for existing home buyers when moving up.
Lack of sufficient inventory in the lower, active price categories in several of the ‘hot’ markets was seen as a key issue that could be inflating prices. A number of respondents indicated that more foreclosure inventory is likely being withheld by the banks and is expected to go on the market in the future, which in turn respondents anticipate will apply renewed downward pressure on prices.
More positive sentiment and feedback were offered in the April survey than in prior months, out of recently challenging markets, including Michigan. “Closed sales up 50% for 1st quarter 2010 vs. 2009 in South West Michigan.” “Prices have flattened out, under 100K market is becoming a seller's market with multiple offers. Things are looking better than they have for over two years.” “Homes are having multiple offers and at the listing price almost.”
Nevada agents were also more upbeat. “Lots of activity even if prices not moving up. Not moving down either. Existing home sale up significantly.” “Residential real estate is undervalued in Nevada, prompting buyers/investors to be very active.” “We’re seeing record sales in our office and think it will continue.”
Other positive signs include some reporting of more activity in higher price range properties, in several states, a category almost completely bypassed in RECI respondent feedback since the Index debuted last summer.
Notably, uncertainty regarding the market’s prospects following the expiry of the current incentive program was predominant in the April survey and was reflected in both Short Term (3 – 6 months) and Long Term (12 – 18 months) broker and agent optimism/pessimism RECI component ratings, with both retreating versus last month.
The drops pressured the overall Index, with the prevalent respondent concerns being i) uncertainty over the market’s reaction following the expiry of the tax credit program; ii) the risk of interest rate hikes; and, iii) pressure anticipated from additional foreclosure inventories.
Key issues also included persistently tight lending practices and slow approvals, both seen as major hurdles to the efficient absorption of REO and foreclosure inventory, and to a sustained market recovery.
The RECI’s Short Term (3 – 6 months) variable regressed marginally to 5.74 (-0.35%) on the 1 – 10 scale, and the Long Term (12 – 18 months) indicator moved back from 6.51 to 6.43 (-1.23%).
Colorado, Georgia, Illinois and Indiana, amongst a number of other markets continued to experience abundant bank owned and foreclosure property inventories, which pressured prices and sentiment in those states.
More than 50,000 brokers and agents from the Point2 Agent (www.Point2Agent.com) software platform user base as well as members of the RealTown (www.RealTown.com) online community were surveyed for the April report, with 1594 usable responses aggregated to generate the April RECI score.
The complete Report including respondent commentaries broken down by state can be accessed at www.RealEstateConfidenceIndex.com.
RECI Survey Instrument and Methodology
The Real Estate Confidence Index (RECI) tracks the real estate market opinions of tens of thousands of licensed real estate professionals, brokers and agents, across the United States, accounting for seasonality, on a scale of one to ten (1 being “bad” and 10 being “good”). The RECI also rates respondent sentiment for market conditions 3 – 6 months and 6 – 12 months into the future on a ten-point scale (1 being “pessimistic” and 10 being “optimistic”). The median across all three time periods represents the Index measure for the month.
The RECI is open to the Point2 Agent membership and to tens of thousands of additional licensed real estate professionals across the nation at the beginning of each month. Respondents complete a simple, four question survey through third party survey solution providers, Survey Monkey. The data is tabulated electronically, median averages surfaced for quantitative questions, and qualitative feedback and respondent commentaries are captured and presented in Point2’s monthly RECI Summary Report.
About Point2 Technologies Inc.
Point2 Technologies (www.Point2.com) is one of the first web-based inventory management and online marketing software developers in the world, today serving customers in the real estate and heavy equipment industries in over 120 countries.
Point2 markets its industry leading listing syndication and website solution, Point2 Agent (www.Point2Agent.com), in partnership with major real estate Multiple Listing Service organizations and Associations, seamlessly reaching and enabling syndication for hundreds of thousands of real estate professionals.
More information about Point2 can be found at . For ongoing news about Point2, please visit www.point2.com/news.aspwww.Point2.com.
For questions or to request an interview, please contact Roger Noujeim at Point2 Technologies PR at email@example.com or at 888-955-7900. Custom data, graphics and charts featured on the RECI website or within the RECI report can also be obtained in high resolution, upon request.
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