RISMEDIA, February 25, 2010—Point2 Technologies recently released the findings from its February 2010 Real Estate Confidence Index (RECI) survey, which reflect a more favorable current environment and improved sentiment amongst brokers and agents across the United States compared to January 2010, with fundamental economic concerns weighing in on the long term outlook and pressuring the overall Index rating.
Accounting for seasonality, the national RECI, which tracks real estate professionals’ forward looking sentiment on a monthly basis was down by 2.26%, to 5.63 on the RECI scale of one to ten (1 being “bad” and 10 being “good”).
Two of the national RECI’s three variable components declined month-to-month, with the Long Term (12–18 months) outlook gauge dropping by 4.10% to 6.32 on the 1–10 optimism / pessimism scale. The component however continued to exhibit notable strength compared to the shorter term views within the Index, with 66.4% of the respondent base rating the variable at 6 or higher. In addition, 8.2% of the base was highly optimistic with a 12–18 month outlook rating of 10.
The Short Term component of the RECI, which measures respondent optimism/pessimism for the coming 3–6 months, held up relatively better, declining 2.89% to 5.71, from 5.88 in January.
Current Sentiment however rose versus last month, signaling improved business conditions for the February survey period. The RECI variable, which tracks broker and agent views of current market conditions, adjusted on a seasonal basis, rose by 1.04%, to 4.87. Drivers that fuelled respondents’ upbeat ratings in key markets include lower inventories in attractive price categories and low interest rates. A feeling that the market has, or is leveling off also seemed to encourage real estate professionals in a number of areas around the U.S.
Key concerns highlighted by the February survey results include the looming April 30 deadline for the current federal tax credit program, which respondents in most states consistently credited for driving market activity in the mid to lower range home price categories.
The risk associated with interest rate hikes over the coming months was another major issue frequently pinpointed by survey participants around the country. Participants noted higher rates could further impede American consumers’ ability to service outstanding mortgages upon expiration and could lead to the extension of the residential foreclosures issue in the U.S.
Extending a familiar theme raised by RECI survey contributors over the past months, the jobs market was also recurrently cited as a key obstacle to market recovery, and reason for some respondents’ declining longer term optimism.
Apprehension was also expressed regarding foreclosure inventories held back by banks, which many believe will put more pressure back into the markets when released.
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