Wisconsin Real Estate Update
“U.S. Real Estate Professionals’ Forward-Looking Market Sentiment Improves 5.4 Percent”
The August release of the Real Estate Confidence Index (RECI) — which monitors market sentiment of property professionals for the present time as well as in the short and long terms — reflects an improved outlook. On a scale in which 1 is negative and 10 is positive, the RECI settled at 5.9 last month. The reading is a 5.4 percent gain over the previous month. It not only represents a jump of 21 percent from the June 2009 average, it marks the third month in a row of increased optimism. For the short term, or the next three to six months, sentiment improved by 4.5 percent to a reading of 5.8. Meanwhile, long-term optimism/pessimism for the next six to 12 months bumped up to 6.88. The index is put together each month by Point2 Technologies Inc., which surveys thousands of U.S. realty professionals for its results.
The housing downturn and economic crisis have made closing a home sale more difficult, but deals are getting done. Sellers must remember that buyers are in the driver’s seat and are in no rush to make a purchase, as more foreclosures enter the market. In some instances, they must be willing to lower their asking prices. “If you’re not getting showings, you’re overpriced,” Realtor Scott Patterson says. Buyers, for their part, must be prepared to make down payments of 20 percent or more and provide much more documentation than in the past, as lenders are reviewing bank statements, tax returns and employment histories. Even after submitting the necessary paperwork, buyers might find that lenders are unwilling to finance the deal due to such factors as a high rate of delinquencies in a neighborhood. Others will learn that more money is necessary to close the deal, and they will have to turn to family or other sources for cash. Finally, buyers must be prepared to wait 60 days or so to close, as appraisers are being more thorough.