Economists' Outlook

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Q&A Corner: Foot Traffic and the NAR SentriLock Home Showings Report

NAR releases the NAR SentriLock Home Showings Report on a monthly basis. Every month SentriLock, LLC. provides NAR with data on the number of properties shown by a REALTOR®. SentriLock Lockboxes are used in roughly a third of home showings across the nation. Foot traffic has a strong correlation with future contracts and home sales, so it can be viewed as a peek ahead at sales trends two to three months into the future.

Brandon Hardin, Research Economist, is the lead author of the report.  In this conversational Q&A, he provides insights into the data, perspectives on how members can use the report, and the results he found to be most interesting.  

Q: How did this report come about?

Brandon Hardin: This product was created to supplement our current housing research product offering by significantly enhancing the previous iteration of the SentriLock infographic. The new report utilizes data on the number of properties shown by a REALTOR® that is provided by SentriLock, LLC. to NAR on a monthly basis. The SentriLock lockboxes hold the keys that REALTORS® use to gain access to a property. REALTORS® can also gain access to the property via a mobile app as well. So, for every instance of a REALTOR® accessing a home, SentriLock, LLC. receives information about the access for which SentriLock Lockboxes capture roughly more than a third of home showings across the United States. This data is leveraged to illustrate the very strong correlation between foot traffic and subsequent contracts and actual closed home sales.

Considering we have already created the pending home sales, which measures homes that go under contract and we also measure existing-home sales, the metrics of the foot traffic report can be viewed as a look ahead at sales trends two to three months in the future and thus, provides more understanding and context to the change in existing-home sales considering the strong correlation between the two.

Q: How has this report changed over time?

Brandon Hardin: The report has been revised a few times since its inception. Prior versions include more simplistic graphs that represent individual association showings with short excerpts to the preceding version of the current SentriLock Home Showings Report, which was an infographic that had a few key bullet points on the foot traffic metrics followed by the diffusion index.

The highlight of the previous versions was the diffusion index for which measured the change in showings relative to a year-ago by looking at every board in our panel and determining whether they increased, decreased, or experienced no change. We then take the average change from a year-ago for all of the boards in the panel. However, there were some drawbacks to the diffusion index such as the difficulty in determining the difference in the magnitude of change between each board. While additional indices were created to combat the problems of the diffusion index, the new report utilizes the year-over-year change for boards across showings, cards, and showings per card metrics.

Another important aspect of the new report is that the report is substantially longer and is able to provide a little more in-depth information. Building upon the foot traffic metrics mentioned above, the new report illustrates those changes at the national and regional levels.

Q: What important trends does this report capture?

Brandon Hardin: Throughout its various stages, the foot traffic data has reflected numerous trends. Considering we began utilizing foot traffic data in 2008, we were able to see a significant decline as a result of the credit crisis and Great Recession. Since then, we have seen a relatively stable recovery in showings, which are continuing the upward trend. Across 2008, average showings were 463,265 and even throughout 2020, showings averaged 852,160. While these figures represent two completely different economic environments, the important thing to note is how we got to this point, as showings increased throughout that period as a result of increasing demand even as we currently deal with significantly low supply.  

Touching on 2020 a bit further, an important trend in 2020 is how residential real estate withstood the impact of the COVID-19 pandemic in stark contrast to the commercial real estate market, which was heavily impacted. With coronavirus mitigation implementations in place and work-from-home (WFH), the residential market was extremely hot and foot traffic metrics supplement the story of trends in residential markets during this time as well.

Throughout this period, we saw record low interest rates coupled with significantly increasing demand, low inventory and consumers who were looking to purchase homes/relocate given WFH. As a result, we have seen houses fly of off the shelf (days on market at record lows) and housing prices significantly increase.  Despite the increase in prices and even with a shortage of inventory, showings are reaching new heights. For the first full month of the pandemic (April 2020), showings were at the lowest point of the year. After April, showings dramatically increased every month thereafter before reaching a new record high in August. Showings did come down for a few months but were still at or above pre-pandemic numbers before substantially increasing again in March of 2021. Showings remain elevated even at this current moment.

Other important trends can be seen at the regional level. One trend that we have seen throughout the pandemic is that the South and West were impacted less than the Northeast and Midwest regions, with the South showings seeing the least amount of impact on a year-over-year basis since April 2020 as showings were up significantly.

Q: What aspects of this report do you find most interesting?

Brandon Hardin: I think the most interesting aspect of the report is how it provides insights into the regional housing market, showing demand and competition amongst buyers. No one other than amazing REALTORS® could provide us with the information necessary via daily activities captured by SentriLock, LLC. to analyze what is going on in the market.

Q: How can our members use this data?

Brandon Hardin: There are a number of benefits for our members. While our members have the best information on what is going on in their local markets, the SentriLock Home Showings Report provides them with data on what is happening at the national and regional levels. Members can use the data to share information and guidance with their clients by explaining trends in the market. Members can also use it to set client expectations given the trends the report captures and use it to provide awareness of competition.

For the latest data, check the Foot Traffic page.

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