REALTORS® frequently provide comments in their responses to the monthly REALTORS® Confidence Index survey. The January responses in general were upbeat, focused on the ongoing recovery of the residential real estate markets. However, there continue to be problems associated with the recovery: a lack of inventory, tight financing, appraisal issues, and regulatory/economic issues are constraining the current housing recovery.
Low Inventory/Multiple Bidding
Inventory was reported as remaining tight, with increased multi-bidding. Investors, who typically pay cash, frequently win against first-time buyers. REOs do not appear to be coming to the market sufficiently to meet demand. Sellers are reported as waiting for prices to pick up further. There are reports of homes selling above asking prices.
Access to financing continues to be perceived as tight. The process of obtaining a mortgage remains protracted, especially for short sales, causing delayed closings and risking cancellations. There are reports that banks are disapproving loan applications of those with reasonably good credit scores and are requiring larger down payments.
The most common reports are about out-of- area appraisers who have poor knowledge of local conditions. Another issue is the demand for unusual repairs by some appraisers.
Regulatory and Economic Issues
REALTORS® expressed concern about the adverse effects of fiscal/financial regulation and the state of the economy on the real estate market.