ShareIn the monthly REALTORS® Confidence Index Survey, the National Association of REALTORS® (NAR) asks members to rate the past month's buyer and seller traffic in the neighborhood or area where they make most of their sales. NAR compiles the responses on buyer traffic into a REALTORS® Buyer Traffic Index and the responses on seller traffic into a REALTORS® Seller Traffic Index.
The maps below show the condition of buyer and seller traffic using data collected from February‒April 2016, according to the April 2016 REALTORS® Confidence Index Survey Report.
Measured by the REALTORS® Buyer Traffic Index, buyer traffic was “strong” in many states except in Alaska and Wyoming.[1] Alaska and Wyoming are being adversely impacted by the slump in oil prices and cutbacks in oil drilling. Texas, which has a more diversified economy than Alaska and Wyoming, continues to experience “strong” buyer demand.
Sparse new home construction has been a major factor driving prices up. Although the number of permits authorized for new privately owned housing units has been improving (1.15 million units over a 12-month period in April 2016), 53 percent of new construction has been multi-family structures, which are mostly for rental occupancy.[3] In 2005, multi-family structures accounted for only 20 percent of new construction, so the availability of single-units for purchase among recently constructed properties is lower than is historically normal. REALTORS® reported low inventory of properties in the lower price range and for those that are move-in ready.
[1] The index for each state is based on data for the last three months to increase the observations for each state. Small states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have fewer than 30 observations. Respondents were asked “How do you rate the past month's buyer traffic in the neighborhood(s) or area(s) where you make most of your sales?” Respondents rated conditions or expectations as “Strong (100),” “Moderate (50),” and “Weak (0).” The responses are compiled into a diffusion index. Index values 25 and lower are considered “very weak,” values greater than 25 to 49 are considered “weak,” a value of 50 is considered “moderate,” values greater than 50 to 75 are considered “strong,” and values greater than 76 are considered “very strong.”
[2] Respondents were asked “How do you rate the past month's seller traffic in the neighborhood(s) or area(s) where you make most of your sales?” Respondents rated conditions or expectations as “Strong (100),” “Moderate (50),” and “Weak (0).” The responses are compiled into a diffusion index. Index values 25 and lower are considered “very weak,” values greater than 25 to 49 are considered “weak,” a value of 50 is considered “moderate,” values greater than 50 to 75 are considered “strong,” and values greater than 76 are considered “very strong.”
[3] Based on the latest data for the fourth quarter of 2015, 95 percent of the multi-family units completed were for rental occupancy with regions varying from 87 percent in the Northeast to 98 percent in the Midwest. Source: Census Bureau. Quarterly Starts and Completions by Purpose and Design, Units Per Building, 2015 preliminary data. https://www.census.gov/construction/nrc/pdf/quarterly_starts_completions.pdf