Twenty-nine percent of recent buyers purchased a home in foreclosure or through a short sale, according to the latest REALTORS® Confidence Index. REALTORS® who participated in the survey are also concerned about a growing number of foreclosures and the hurdles buyers face in short sales.
The RCI is a key indicator of housing market strength based on a monthly survey of more than 50,000 REALTORS®; in a typical month there are more than 3,000 usable responses. Practitioners are asked about their expectations for home sales, prices, and market conditions; they also share their insights regarding buyer preferences and financing options and how those factors are influencing real estate markets nationwide.
REALTORS® are on the front lines with buyers and sellers in today's market and have valuable insights into real estate trends, NATIONAL ASSOCIATION OF REALTORS® President Charles McMillan said. The volume of distressed sales that our members are reporting underscores the importance of the recent tax credit extension. By putting cash in the hands of financially healthy home buyers, the credit will continue to help draw down inventory and stabilize home prices to encourage a strong and sustainable housing recovery.
Despite the high volume of distressed sales, REALTORS® report that their buyers encounter various challenges associated with these types of sales. Buyers who present a short sale offer can wait months before hearing whether their offer will be accepted. In addition, REALTORS® are also seeing increased competition for foreclosed properties, and multiple bids are sometimes driving sales prices over list prices.
Aside from the demand for short sales and foreclosed homes, today's buyers are increasingly interested in a home's energy efficiency and proximity to transportation corridors, reflecting concerns about rising energy costs. Many REALTORS® are seeing a growing preference among buyers for smaller homes, as people look to downsize and cut expenses.
Mortgages insured by the Federal Housing Administration are the primary lending vehicle for many buyers; 24 percent of recent buyers used an FHA loan to finance their purchase. However, more than one in five recent buyers-21 percent-paid all cash.