Real Estate Matters

The National Association of Realtors (NAR) periodically surveys its members to get information that is not readily available from MLSs or other "hard" data sources. NAR just released a recent market assessment survey of data from over 2,000 Realtors and there are surprising findings that may contradict some of what we see from the media.

A most interesting finding came from a question posed in the survey asking “In thinking of your most recent potential buyer in 2008, did the client postpone their home buying decision?”

• 50 percent said no, and said the buyer bought in the end
• 23 percent said the potential buyer did not buy, preferring to wait for prices to fall further.
• 6 percent said the potential buyer did not buy because of mortgage difficulties
• 4 percent said the potential buyer could not locate the ‘perfect’ home
• 7 percent said the potential buyer needed to sell the current home
• 9 percent said the potential buyer changed their mind due to various personal reasons.

The striking finding is the second bullet point. There are many potential buyers (23 percent) who have the financial capacity and mortgage qualifications, yet are refusing to jump into the market because of further price decline fears. These hesitant buyers far outnumber the people who are unable to secure a mortgage.

The implication here is that once there are signs of market stabilization, we may see a rush of buyers returning to the market and the recovery could be robust rather than slow. I always like to look at the potential for increased sales and this indeed is encouraging. It also implies that the homebuyer tax-credit being discussed in Congress right now as part of the housing stimulus bill could make a big impact in drawing buyers to act.

Another encouraging finding is that most respondents indicated little problem with their clients getting a mortgage. Specifically, 68 percents said either none or less than one fifth of clients were not able to get a mortgage. Only 8 percent indicated that half or more of their clients were not able to get a mortgage.

Cheers,

Bill