The 5 Most Important Trends Right Now in Real Estate

by Peter Thomas Ricci

The real estate market is influx, and we’ve got the five most important trends to look for as the market continues to recover.


Last week, the National Association of Realtors released its latest Realtor Confidence Index, which reported that confidence among Realtors towards the housing market to be at its highest level in years and more than double its level at the start of 2012.

In our coverage of the index, though, we noted that NAR’s research extended far beyond the confidence levels of its members, and offered a wide-ranging, detailed examination of the most important trends currently defining the housing market. Here are the five most important items:

1. Cash is King…For Some – All-cash sales still make up a hefty chunk of the residential real estate marketplace, with 32 percent of all transactions in April closing with all-cash financing. Though more conventional sales are seeing ordinary levels of all-cash activity, both investors and international buyers largely depend upon all-cash, with 74 percent of investors and 75 percent of foreign buyers opting for the financing option.

2. First-Time Homebuyers MIA – Though the housing market is certainly recovering, first-time homebuyers are still missing in action and have yet to join the recovery. In April, first-time homebuyers accounted for 29 percent of all transactions, which is 11 percentage points lower than the historical norm of 40 percent.

3. Rents Remain Hot – We may have reported last week on soaring asking prices, but from the Realtor perspective, the residential rental market is still quite hot. Fifty-four percent of Realtors, in fact, reported higher residential rents in their markets than last year.

4. Credit Still Tight – Tight credit is still a problem for Realtors and their clients. According to NAR’s research, half of all loans made today require credit scores higher than 740; from 2001 to 2004, 40 percent of loans required such standards, and NAR estimates that between 500,000 and 750,000 additional loans could be made if lending standards were relaxed to those earlier standards.

5. Persnickety Appraisals – Unsurprisingly, appraisals remain a thorn in many Realtors’ sides, with 31 percent of Realtors reporting appraisal problems. Eight percent reported contract cancellations as a result of appraisals, 10 percent reported contract delays and 13 percent reported negotiations for lower sale prices.

Are there any trends that we missed? Let us know in the comments section!

Read More Related to This Post

Join the conversation

New Subscribe

  • This field is for validation purposes and should be left unchanged.