The Realtors Confidence Index from the National Association of Realtors (NAR) shows that Realtors are confident about what’s to come in the first half of 2018. On a scale of 1 to 100, the report measures NAR members’ housing market expectations over the next six months, which reveals an optimistic outlook from respondents.
Relators are especially confident about this year’s sales pace for detached, single-family homes. The majority of respondents anticipate a “strong” sales pace as those in 36 states predict a sales pace over 60 points. Merely expecting a “stable” market were respondents from four states — Oklahoma, Illinois, West Virginia and Connecticut. Only respondents Alaska predict a “weak” market at 50 or less points.
With more than 75 points, a “very strong” market is expected in the nine states of Washington, Nevada, Nebraska, Wisconsin, Kentucky, Tennessee, South Caroline, Delaware and Rhode Island.
Expectations are healthy regarding the townhome and condominium sales pace, with respondents in 41 states anticipating a “stable” to “very strong” 12-month future for townhomes and respondents in 16 states expect a “strong” 12-month future for condos.
Continued inventory problems lead economists and real estate experts to believe that 2018 will be a seller’s market, yielding pricing leverage to homeowners given the current weak residential housing starts.
Sixty-nine percent of respondents expect home prices to grow this year, with the most optimism reported in the West and Southeast. A 4 to 6 percent increase in home prices is presumed by Realtors in Florida, Maryland, Colorado, Nevada, Arizona and Washington.
NAR members report that, on average, homes have been selling within 40 days and at a 31 percent premium.
Still, Realtors expect that continued demand from buyers over the upcoming year will remain strong, with millennials finally anticipated to enter the market as homebuyers and buyers of all ages benefit from job and wage growth.
Buyers are expected to keep striving for their dream homes, as indicated by an expected buyer traffic index of 62. Buyer traffic is forecasted to remain “strong” by respondents in 37 states and “stable” by those in another seven states. North Dakota, South Dakota, Alaska, Louisiana and West Virginia are anticipated to see “weak” or “very weak” buyer traffic.
Though confidence in the housing market is up overall, the effects of low inventory and the tax reform bill, with its changes to the mortgage interest deduction, state and local tax (SALT) deductions and capital gains taxes, leave some relators wary.