Game Change

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The latest ANALYTICS Or ig i nat ion Price Gains Predicted to Mellow Redfin agents forecast a slowdown in the coming months. a na ly t ic s of these categories have increased from the first quarter of the year to the second. However, while a majority of agents expect price gains, a minority expect prices to "rise a lot." The percent of agents who anticipate prices rising "a lot" in coming months fell from 44 percent in the first quarter to just 16 percent in the second quarter, according to Redfin's survey. Also, while the percentage of agents who believe now is a good time to sell a home increased four percentage points to 86 percent in the second quarter, the proportion of agents On the other hand, the most commonly cited obstacle for sellers—cited by 40 percent of survey respondents—is low appraisals. In the current environment, a decreasing percentage of agents are advising buyers to "use aggressive strategies such as waiving contingencies and expanding their budget when facing a bidding war." About 11 percent of agents admitted to using these strategies, as opposed to 15 percent in the previous quarter. Another observation real estate agents revealed in the Redfin survey is an influx of new agents. About 31 percent of agents noted an increase in agents in their area, up from 24 percent in the first quarter of this year. s e r v ic i ng I n concurrence with many industry analysts, real estate agents expect price gains to soften in the near future, according to survey results released by Redfin, a Seattlebased national brokerage. Agents also harbor a positive outlook for sellers and a somewhat less positive outlook for buyers in the current market, according to Redfin's Real-Time Agent Survey of 380 real estate agents. Eighty-six percent of agents believe prices will rise over the next few months. The same percentage of agents say now is a good time to sell a home. Both who believe now is a good time to buy fell from 57 percent to 46 percent. This was the first time in the survey's history that fewer than 50 percent of agents agreed the current time was a good time to purchase a home. However, the percentage of agents who say now is a bad time to buy is still a meager minority at 7 percent. Factors leading agents to view the current market as a seller's market include low inventory and an observance of multiple offers on the same homes. Ninety-three percent of agents cited these buyer challenges in Redfin's survey. While still a significant majority, the number is down three percentage points from the first quarter. Clear Capital projects widespread increases in the country's biggest markets. F orty-five of the top 50 metropolitan markets will experience yearly price increases during the second half of the year, according to Clear Capital's Home Data Index Market Report. This widespread forecast of price increases "speaks to this move toward a more balanced, broad-based recovery," said Alex Villacorta, VP of research and analytics at Clear Capital. Bakersfield, California, is expected to lead national price gains with a 5.2 percent price increase through the end of this year. Las Vegas comes in as a close second in Clear Capital's forecast with a projected price growth of 5 percent. Las Vegas posted the highest quarterly price gain in the second quarter, at 4.4 percent. The Bakersfield metro posted a notable jump from 29th place in Clear Capital's first-quarter report to first place in the secondquarter report. "This leap is an example of the fundamentals driving the overall recovery," Clear Capital said, adding also that Bakersfield "serves as a reminder that the recovery continues to unfold market by market." After Bakersfield and Las Vegas, the top five metros for projected price gains through the end of the year are rounded out by Chicago, Sacramento, and Milwaukee, Wisconsin, with gains of 4.9 percent, 4.8 percent, and 4.4 percent, respectively. Clear Capital expects the Cleveland metro to fare the worst for the remainder of the year with a 2.2 percent price decline. Raleigh, North Carolina; Charlotte, North Carolina; and Denver are the only other metros out of the top 50 with anticipated price depreciations over the remainder of the year, according se c on da r y m a r k e t Second Half of 2013 to Bring Bigger Prices to Clear Capital. However, the analytics firm expects price decreases of less than 0.5 percent in each. "At the metro level, we saw some subtle, yet notable trends unfold in June," Villacorta said. "While price trends continued to diverge at the micro market level, they are for the most part positive." At a national level, Clear Capital revised its 2.6 percent projected yearly price gain up to 6 percent. While lower than the current yearly gain of 8.6 percent, this forecast is still greater than historic norms, which rank between 4 and 5 percent. While it is notable that some markets are experiencing doubledigit gains, "[s]eeing the bulk of major metros move into positive territory is truly good news, even if their gains are still in the single digits," Villacorta said. The M Report | 71

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