REALTORS® nationwide generally continued to report "strong" local market conditions in June 2015 for single-family and townhome properties. They were also "strongly confident" about the outlook over the next six months compared to a year ago, although confidence appears to have eased somewhat compared to May.
Based on the responses of 2,901 REALTORS® about local market conditions in June, the monthly National Association of REALTORS®' REALTORS® Confidence Index Report found with strong demand amid tight supply, properties typically sold within 34 days nationally. First-time home buyers accounted for 30 percent of sales. Cash sales slid to 22 percent of sales, as purchases for investment purposes dipped to12 percent and distressed properties dropped to eight percent of sales.
Meanwhile, in their responses to the California Association of REALTORS® June Market Pulse Survey, California REALTORS® indicated sellers are still receiving multiple offers and more than a third of homes sold closed over asking price. The share of California home sales closing below asking price increased to 43 percent in June, up from 40 percent in May, but down from the highest point of 55 percent in January 2015. More than a third of homes (33 percent) closed over asking price, and 24 percent closed at asking price.
The share of properties receiving multiple offers was unchanged at 65 percent in June, but down slightly from 66 percent in June last year. The average number of offers per property increased slightly to 2.9 from 2.8 in May and 2.7 in June 2014.
Although majority of California REALTORS® (83 percent) expect better or similar market conditions over the next year, the percentage of California REALTORS® optimistic about conditions over the coming year has declined from 62 percent in January to 44 percent in June.
According to NAR, issues weighing down the market's momentum include fewer affordable homes, so sellers are also hesitant to move; financing issues: difficulty in qualifying for a mortgage due to higher FICO credit score and down payment standards, protracted mortgage approval process, and condominium financing issues; appraisal issues: conservative estimates, "out-of-town appraisers," and slow turn-around; anticipation that the new TILA-RESPA Integrated Disclosure (TRID) regulations may delay closing/settlement of transactions; rising interest rates; declining demand from international buyers due to a stronger U.S. dollar; and uncertainty about flood insurance rates and reform.
"These are issues of concern for all REALTORS®. The tight inventory and affordability issues are especially serious in California," said Chris Isaacson, president of the Silicon Valley Association of REALTORS®. "Our members have expressed concern that the new TILA-RESPA Integrated Disclosure rule may lead to delayed closings. The changes have been a topic at a number of district meetings, so our REALTOR® members can educate their clients. It is the hope that all parties will be on the same page once the new rule takes effect on October 3."
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.