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Jeff Cameron

HomeSmart

480-652-2004

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November Credit Suisse Survey Results

December 17, 2009 By Jeff Cameron

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Every month I take part in a survey about the real estate market. It is put together by Credit Suisse. I want to bring you all the facts and information about our real estate market and thus this report. But remember, this is a survey of Realtors. We have tremendous turn over with Realtors and less than 10% of the agents do 90% of the business. So, please keep those facts in mind as the report is negative and I don’t understand why. What I am seeing is homes that are priced well sell in 30 days or less, home values are increasing in most areas (not the luxury home market) and there is very good buyer activity. But that is Just My Opinion…Jeff Cameron.  Here are the survey results:

 

Monthly Survey of Real Estate

Agents

CHANNEL CHECK

Traffic Off Slightly in November; Buyers Lose

the Sense of Urgency

■

 

 

Modest decline in traffic in November; greater challenge is the lack of

urgency among buyers.

agents indicated a slight decrease in traffic, with our buyer traffic index

falling slightly to 43.0 from 43.5 in October. In addition, among the 20 largest

markets, traffic fell to 43.4 in November from 45.6 in October. However,

even as agents noted that traffic was only down marginally, they noted that

contract activity declined further as the buyers had no reason to act quickly

since the tax credit had been extended. We expect that this lack of urgency

will result in lower existing home and new home contracts over the next

several months. This is consistent with the slowing that builders have

mentioned over the past several months.

Our November survey of real estate

■

 

 

Urgency, sales activity likely to return in February.

current lull in sales activity will last through the end of the year and perhaps

through January. We think that the April 30 for the extended tax credit will lead to an additional wave of buyers in Spring ’10, although we suspect that that wave will be smaller than what was seen

in November ’09 closings. We think that volume will resume at that time based on the extremely favorably affordability, which will likely pull buyers out of apartments in the Spring. We estimate that the slower trends in November, December, and January will be sufficient to offset the demand that was pulled forward as buyers bought homes this Fall to benefit from the original tax credit plan. The risk to this would be a spike in mortgage rates related the government ending its mortgage purchases in 1Q/10, or a decline related to buyers encountering difficulty finding sufficient down payments for any revised FHA loan programs.

We anticipate that theth deadline for signed contracts

■

 

 

Slowing in the Inland Empire, Las Vegas, Miami, Orlando, and Phoenix. the greatest decline in Orlando while the Inland Empire, Las Vegas, Miami, and Phoenix saw more modest declines. Improvement in traffic was seen in Austin, Jacksonville, and Seattle. The highest levels of traffic were seen in Ft Myers, Las Vegas, Los Angeles, and Seattle. The key driver of traffic in all markets is the favorable affordability, which continues to lead to strong demand from investors and first time buyers who are fleeing rentals. 

 

 

 

Phoenix, AZ – Consumer Confidence Wanes with

“Bad Economy”

(11,549 single-family permits in 2008, 4th largest market in the country)

Concerned buyers lead to lower than expected traffic.

 

 

Buyer traffic was below expectations. Our traffic index fell to 44 in November from 50 in October, with a reading

below 50 indicating lower than expected traffic levels. Agents noted low consumer confidence stemming from doubtful economic conditions for the weak traffic in our November Survey. This is in contrast to the rush of buyers we saw in October, as the first tax credit neared its expiration, and some buyers thought the market would reverse its course prices would appreciate. In November, however, agents mentioned that buyers were, “looking for rock bottom pricing,” and another said consumers were, “uncertain,” and that “rising unemployment,” kept traffic levels low. In addition, an agent commented that buyers were hesitant because of “declining values,” which led them to remain out of the market. Of those surveyed, however, some mentioned that the new tax credit, and low

prices and interest rates, have kept buyers interested, with additional traffic coming from investors.

Price decline leads to lower inventories in November.

 

 

Home prices declined in November, as our index came in at 44, down from 52 in October, below a neutral reading

of 50 (a reading below 50 indicates sequentially lower prices) The fall in prices led to levels of affordability that some buyers accepted, leading to lower inventory levels. Our home listings index came in at 53 in November, down slightly from 54 in October, but still above a reading of 50 (a reading above 50 indicates lower inventories over the last 30 days). We view the decline in inventories as a positive, though we remain concerned over

a pullback from the tax credit, and the possible level of shadow inventory in foreclosures. Comments from real estate agents:

■

 

 

“There is a belief that prices will go lower.”

■

 

 

“The market went dead, buyers are few and far between.”

Filed Under: Latest News Tagged With: Credit Suisse, first time home buyer tax credit, Home sales in Arizona, real estate in Scottsdale, real estate market report

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