August 27th, 2013
Americans’ views of the real estate market are improving, according to Gallup’s recent Work and Education poll. Every year, the research firm asks Americans to rate their view of 25 different business sectors and industries on a five-point scale that ranges from “very positive” to “very negative.” Some of the industries included are retail, pharmaceutical and legal.
This year, real estate was among the top three industries that saw the most improvement. It was joined by the banking and travel sectors. The poll shows the net positive rating for the real estate industry increased 13 points, from -14 in 2012 to -1 in 2013. According to Gallup, this score means that approximately the same number of Americans have a positive view of the industry as those who have a negative view. This has not been the case since 2007.
Such optimistic results are likely due to the U.S. housing market’s recent recovery. It has been thriving for months now, and although mortgage rates have risen from their near-historic lows in the spring, they are still at very affordable levels. The Gallup poll suggests many Americans agree, and growing rates have not dampened their outlook on the market.
More good news for the housing market
Along with an uptick in consumer confidence in the real estate sector, new data on shadow inventories is also a positive indicator for the future. According to broker-dealer firm Compass Point Research & Trading, during the second quarter of 2013, shadow inventory saw its largest quarter-over-quarter decline since the credit crisis began.
Shadow inventories are homes at risk of default that haven’t yet hit the market, and they have been a hindrance to the housing industry’s recovery in the past. However, from the first quarter to the second, they dropped from 3.28 million loans to 2.99 million loans. Year-over-year, they fell 23 percent, HousingWire reported.
This is the greatest yearly decline on record, and it is significantly lower than the peak hit in March 2010, when there were 5.5 million loans making up the nation’s shadow inventory. Of course, as with most facets of the U.S. housing market recovery, not all states improved their shadow inventory to the same extent.
“The shadow inventory is quickly being worked off and is no longer a significant weight on the housing market in most parts of the country,” Mark Zandi, chief economist for Moody’s Analytics, told HousingWire. “The key exceptions would be pockets in Florida, parts of the Midwest, and the middle Atlantic.”