RISMEDIA, June 29, 2010—United States real estate broker and agent forward-looking confidence edged higher in Point2 Technologies’ monthly Real Estate Confidence Index (RECI) survey in June 2010, rising 0.70% to 5.76 on the RECI scale of 1-10, versus last month. Relatively strong long-term optimism sent the Index’s 12-18 month optimism/pessimism variable higher by three percentage points and was the key catalyst behind the upside.
Current Sentiment, one of the three key Index components that tracks survey respondent views of existing market conditions, dropped by 1.92%, to 5.12 on the 1-10 RECI scale (10 being “Good” and 1 being “Bad”).
The Short-Term (3-6 months) optimism/pessimism variable rose marginally, by 0.53%, to 5.64.
Closing at 5.76 on the 1-10 RECI scale, the national Index remained virtually flat in the June 2010 survey, versus a year ago (-0.17%).
Since the RECI was launched in June 2009, broker and agent sentiment has held the Index between the 5.59 low recorded in October 2009 and the high of 6.03 hit in November that year. The RECI peaked just ahead of the expiry of the first federal government tax credit incentive that offered $8,000 to new home buyers.
Notably, the lack of a clear directional improvement in broker and agent outlook over the past twelve months indicates that while government incentive programs have helped to spur market activity, a self sustaining recovery remained a challenge.
Feedback offered by 2,574 real estate brokers and agents who participated in the June 2010 survey from across every U.S. state sent mixed signals regarding the outlook for the market, even though the longer term view remained relatively strong.
In most states, respondents frequently referred to healthy sales activity and optimism, with some citing low interest rates as the primary driver. In some pockets around the country, shorter time-on-market was also reported, which indicates a relatively more fluid sales and financing environment in the respective regions.
Concerns over employment and job insecurity, lending obstacles and more foreclosures coming to market were however persistent. Brokers and agents nationwide expect these issues will apply downward pressure on home values for the foreseeable future, and, in cases, the next several years.
Uncertainty over the future of the market following the lapse of government incentives was also repeatedly discussed and captured in the June 2010 RECI Report. The concern highlights growing reliance on government intervention in many parts of the country. Sudden slowdown in sales activity right after the April 30, 2010 expiry of the latest program was felt and reported by sales professionals in a number of states.