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Editorial


Front Page - Friday, August 26, 2016

Housing opportunities & market experience


REALTOR Association President's Message



Nathan Walldorf

The National Association of Realtors (NAR) recently began a new initiative called the Housing Opportunities and Market Experience (HOME) report to monitor consumer sentiment about the housing market.

On a quarterly basis, the HOME report will feature consumer outlook on topics including views on housing as a good financial investment, whether homeownership is part of the American Dream, if now is a good time to buy or sell a home, and perception of home price changes.

Highlights from the first HOME report include these themes:

Slight decrease yet strong belief that now is a good time to BUY a home: In the second quarter of 2016, 74 percent of people believe now is a good time to buy a home. Forty-two percent believe that strongly, down from 44 percent in Q1 2016. Only 26 percent of people believe that now is not a good time to buy a home. Across all groups surveyed, the majority feel that now is a good time to buy a home. Not surprisingly, with rapid home price acceleration, those who are currently renting or living with someone else, those who are under 34 years of age, and those who live in urban areas are less confident that now is a good time to buy.

More people believe now is a good time to SELL a home: Sixty-one percent of people believe now is a good time to sell a home, up from 56 percent in Q1 2016. Thirty-two percent believe that strongly, up from 28 percent in Q1 2016. Thirty-nine percent believe now is not a good time to sell a home, down from 44 percent in Q1 2016. This confidence varies across US regions, with 60 percent of Southerners feeling now is a good time to sell a home.

Increased confidence in home prices: Fifty-three percent of people believe that, within their communities, prices have gone up in the last 12 months – an increase from 50 percent in Q1 2016. Thirty-six percent believe prices have stayed the same (down from 39 percent in Q1 2016) and 11 percent believe prices have gone down. Those aged 35 to 44 years are most likely to report that prices have increased in their communities. Fifty-seven percent of renters compared to 54 percent of owners (up from 48 percent in Q1 2016) believe prices have increased in the last year. So what’s the reality versus perception of home prices Greater Chattanooga? July numbers showed a slight decrease from June; our Median Price is up 1 percent to $164,500, and the Average Price is up .4 percent to $200,097.

Student loan debt remains an obstacle to home ownership: About one in four respondents reported having student loan debt across all income brackets. Forty-seven percent of persons 34 years or younger have student loan debt. Respondents that rent or live with someone else more often reported that they have student loan debt than those that own their own home. Student loan debt impacts the consumer’s comfort level in taking on more debt and their likelihood of qualifying for a mortgage.

Among recent home buyers, one-quarter have student loan debt, with the typical amount being $25,000. The share of those with student loan debt rises to 41 percent among first-time home buyers. Even among successful home buyers, this amount of debt is cited as a difficulty in their home buying process. Thus, student loan debt continues to be a key legislative focus for the Realtor Party on behalf of current and future home owners.

Through NAR’s research, GCAR continues to monitor these and other trends impacting the perceptions of and obstacles to home ownership.

 

The Greater Chattanooga Association of Realtors is The Voice of Real Estate in Greater Chattanooga. The Association is a regional organization with more than 1,700 members, and is one of more than 1,400 local boards and associations of Realtors nationwide that comprise the National Association of Realtors. The Greater Chattanooga Association of Realtors services Hamilton and Sequatchie counties in southeast Tennessee, and Catoosa, Dade, and Walker counties in northwest Georgia. For more information, www.gcar.net.