RISMEDIA, March 29, 2010—Brokers and agents across the United States reversed three months of declining optimism in Point2 Technologies’ Real Estate Confidence Index (RECI) survey, pushing the forward looking market opinion Index up 2.49% for the March 2010 survey period. Accounting for seasonality, the national monthly Index moved up to 5.77 on the one to ten scale (1 being “Bad” and 10 being “Good), up from 5.63 in February 2010.
All three of the national RECI’s variable components improved in March.
The Current Sentiment component, which tracks respondent sentiment of current market conditions made the biggest jump, moving up 3.49% on the 1–10 scale.
The Short Term, 3–6 month optimism/pessimism gauge improved 0.87%, and the Long Term 12–18 month variable moved up 3%, to 6.51 on the scale. In addition, 68.6% of the respondent base gave the Long Term component a rating of 6 or higher and 10.5% gave it the maximum rating of 10/10.
Cautious optimism and a general sense of stabilizing market conditions in many parts of the U.S. were driven by declining inventories in the low to mid price range home categories, which some respondents also linked to more frequent bidding wars. “Fifty percent of our market is REOs, Short Sales with lack of inventory. REOs create price wars in our market! Few conventional sales, short sales and foreclosures with bidding wars, cash/conventional loans preferred.”
Multiple offers on bank owned properties in some markets, and buyer motivation to move ahead of the government’s April 30 deadline for the current tax credit program also contributed to increased market activity and optimism. “Eighty percent of the listings are short sales. We are running out of REO and regular listings. Prices are down, there is strong activity on bargain priced properties.”
Sporadic positive sentiment surrounding the onset of spring, typically a more active time of the year for real estate also combined with the tax credit deadline to boost respondent expectations for the coming months. “The spring selling season is coming up, there are ample buyers waiting, we need more inventory, interest rates are great. Conditions in Atlanta are getting better as the weather gets better. The sense of urgency is starting to hit many buyers as the first-time home buyer’s credit nears its expiration.”
Amidst the renewed optimism, negative sentiment and apprehension remained apparent in many states, with survey respondents indicating buyer reluctance to commit due to job uncertainty. Pressure on prices was also expected to continue by brokers and agents in most states, driven by current foreclosure inventories, with more foreseen to hit the market.
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