Leaders of the Pennsylvania Association of Realtors® believe that we’ll continue to see a fairly stable housing market for the remainder of 2018.
For the past four years, the Industry Leader survey has tracked our leadership’s views regarding the forces driving the real estate market in Pennsylvania.
The survey focuses on the nuts and bolts of a Realtor’s® business activities and the results show a sense that business remains healthy for you and your clients.
Though inventory remains low and prices are widely expected to rise, 71 percent of leaders say that their buyer clients have become more motivated to purchase a home for sale. This is a slight 2 percent dip from last year, but an overall 11 percent increase from 2016. Similarly, 45 percent of leaders say that their seller clients in the past six months are more motivated to list their home for sale. Surely, this strong sense of optimism from customers on both sides of a home purchase must be buying the positive attitudes our members have expressed about the current state of the real estate market.
Nearly all industry leaders think that interest rates will rise soon, but hardly any felt that the availability of mortgage credit will decline. Of course, in principle, interest rates do not have a direct relationship to lending tightness. But interest rates can impact the comfort level of buyers to seek financing and increasing interest rates can create an impression that credit is harder to get. It’s meaningful to see that just 4 percent of industry leaders expect a decrease in mortgage credit availability, while 83 percent expect interest rates to rise. Also, the share of industry leaders who expected a decrease in credit availability (16 percent in 2015) has declined substantially over the past three years (4 percent in 2018).
For the third year in a row, industry leaders expect to see a continued rise in sales prices, despite the fact that inventory is also expected to increase. Seventy-seven percent of leaders felt that sales prices would rise in the next six months, up from 75 percent in 2017 and 61 percent in 2016. On the other hand, 40 percent also expect inventory to grow in the next six months, compared to 31 percent who felt the same way in May 2017.
For the second year in a row, industry leaders were less likely to say that they did not expect to see an increase in new homebuyers. Fifty-four percent expect an increase in new homebuyers in the next six months, down from 58 percent last year and from 65 percent in 2016. A record high of 40 percent expect the volume of first time home purchases to stay the same over the next six months. If a First-Time Homebuyer Savings Account program were to be enacted in the future, it will be interesting to see if industry leaders feel or detect a change in market participation from new homebuyers.
A $25 gift card was randomly awarded to one member completing the survey. Congratulations to Robert Moncavage from Priority Realty LLC in Pittsburgh!
The Industry Leader Survey is conducted among 335 PAR committee members, including the board of directors. A total of 84 invited leaders (25 percent) completed the survey from May 10-22, 2018.