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In the monthly REALTORS® Confidence Index Survey, the National Association of REALTORS® asks members “In the neighborhood or area where you make most of your sales, what are your expectations for residential property prices over the next year?”
Among the REALTOR® respondents who responded to the January 2018 survey, the median expected price change for the next 12 months was 3.6 percent, according to the January 2018 REALTORS® Confidence Index Survey.[1] In December 2017, the median expected price change was 3.1 percent. Strong buyer traffic amid low supply of homes coming into the market continues to push up home prices. In January 2018, the median price of existing homes sold rose to $240,500, up six percent from one year ago.
The map below shows the median expected price change of the respondents in the next 12 months at the state level based on surveys conducted during November 2017—January 2018. The highest median expected price growth of more than five to seven percent was in Washington, Nevada, and Wyoming.
In Oregon, Idaho, Utah, Arizona, Colorado, and Florida, the median expected price growth was four to five percent. REALTORS® reported stronger buyer traffic in these states compared to one year ago, based on the RCI Buyer Traffic Index, while the number of homes for sale has remained essentially unchanged, based on the RCI Seller Traffic Index.
In states with high property tax rates or property prices, such as New York, New Jersey, Connecticut, and California—states which are the most affected by the Tax Cuts and Jobs Act that put a cap on total itemized deductions property and state and local taxes — the median expected price change among respondents was two to three percent.[2]
Lack of supply amid strong buyer interest continues to push prices up. At the metro area level, data on the number of active listings on Realtor.com indicates how serious the lack of supply is. Of the 500 metro areas tracked by Realtor.com, active listings are lower compared to one year ago in 395 out of 500 metro/micro areas, 80 percent. Areas in red show active listings are lower compared to one year ago, while areas in blue have more active listings.
[1] To increase the number of observations for each state, NAR uses data from the last three surveys.
[2] To note, the median expected price change is based on data collected from October—December 2017, while the Trump administration released its proposed tax measures only in November 2017, and the Tax Cuts and Jobs Act was signed by President Trump on December 22, 2017, so October survey responses may not factor in the effect of tax reform measures on price expectations.
