The Confidence Index Survey by the National Association of REALTORS® uses numbers to reflect the real estate vibe on the street — the things we’re seeing and feeling at open houses and in discussions with colleagues and clients.
Based on more than 2,000 Realtor responses, the latest confidence index indicates real estate professionals seem to feel a little better about the industry this month than last. But they’re still a long way off from the cautious optimism of early 2022.
Twenty percent of respondents to the January survey expect a year-over-year increase in buyer traffic during the next three months. That’s an increase from just 12% with that outlook the previous month. A year ago, though, the percentage was 42.
Respondents also were asked about seller traffic in the next three months, and the results look much the same. Thirteen percent of those surveyed expect a year-over-year increase in seller traffic, compared to just 9% in December. In January 2022, the percentage was 26.
While most are not expecting to see more buyer or seller traffic in the coming months, there were some signs of optimism in the survey, which collects data on client activity.
First-time homebuyers represented 31% of sales activity by those surveyed, an increase from 27% the previous year. That’s a good sign, given that we’ve heard concerns for months about first-time homebuyers sidelined from the market by rising interest rates. A shift in activity among those buyers may signal that people have mentally adjusted to the new interest-rate norms.
Contract activity remains competitive, those surveyed said. The percentage of buyers with all-cash offers (29%) is nearly unchanged month over month and year over year. Also unchanged was the percentage of buyers (about 24%) waiving the inspection contingency.
The bidding wars that were commonplace in many markets during 2020 and 2021 seem to have diminished. Homes received an average of 2.5 offers, down from 3.9 offers in January 2022. Sixteen percent of homes sold above list price, the same as the previous month but down from 46% a year ago.
Most homes (54%) sold within a month or less, although that is a drop from 57% in December and 79% in January 2022. The median days on the market was 33, an uptick from 26 days the previous month and just 19 days the previous year.
The trend spurred by the COVID-19 pandemic of buyers looking outside city centers for homes continues. The survey said 85% of recent buyers purchased in a suburb, small town, rural or resort area.