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Top real estate executives continue to be bullish about improvement in the U.S. housing market, but less than they have been over the last two years and have grown significantly less confident in the world economy since January, according to 2014 Imprev Thought Leader Survey.
“Housing enthusiasm among real estate business leaders overall is still strong, but has definitely cooled down during the last two years,” said Renwick Congdon, chief executive officer of Imprev. “What's most interesting is that leaders of larger brokerage firms are typically far more bullish on the outlook for housing and the U.S. economy than leaders of smaller brokerage firms, but comparatively less confident in their firm’s ability to be more profitable in the next 12 months."
Respondents included more than 270 broker-owners and top executives at leading franchises and independent brokerage firms that were responsible for nearly half of all U.S. residential real estate transactions last year.
►U.S. housing market demand: Approximately half (52 percent) of the real estate leaders surveyed say that housing market demand will improve or significantly improve over the next 12 months, down from 58 percent last year. 42 percent say the housing market demand will stay the same, up from 35 percent in 2013. Only 6 percent say it will deteriorate. Optimism is significantly lower than reported two years ago in the 2012 Imprev Thought Leader Survey where 70 percent of top real estate executives predicted that the housing market would continue to improve over the coming year.
►2015 housing market confidence: Confidence in next year’s housing market is a little less bullish compared to last year’s survey: 18 percent are “very confident” in the 2015 housing market, down from 23 percent last year. However, 79 percent are “somewhat confident,” up from 73 percent from last year’s survey. Only 3 percent say they are “not at all confident” in the 2015 housing market.
►World economy confidence: More than half the real estate leaders surveyed say they have grown less confident (55 percent) in the world economy since January; that compares to 24 percent last year.
►Profitability concerns ... size matters: When asked how confident real estate business leaders are that their brokerage businesses will be more profitable in the next 12 months, 43 percent are “very confident,” down from 48 percent last year. The larger the brokerage, the lower the confidence in greater profits ahead: Only 32 percent of leaders of brokerages with1,000 or more agents are “very confident,” compared with 51 percent of leaders of firms with 50 agents or fewer.
►U.S. economic outlook: For the second year in a row, there’s a split view among real estate leaders on what will happen with the national economy over the next 12 months: 47 percent believe it will improve (down from 50 percent in 2013), 44 percent say it will stay the same (up from 37 percent in 2013), and 9 percent believe it will deteriorate (versus 13 percent in 2013).
►Economic confidence locally vs. globally: Overall economic confidence increased significantly when the executives look closer to home. Nearly ten times as many real estate business leaders say their confidence in their local economies has improved since January vs. overall confidence that the world economy has improved: 48 percent are more confident in their local economy since January compared to only five percent for the world economy, 21 percent for the U.S. economy, and 39 percent for their state economy. A remarkable 55 percent are less confident in the world economy since January, versus seven percent less confidence in their local economy.
►Size of firm and economic confidence: Leaders of the largest real estate brokerage firms were the most bullish on the improvement in the U.S. economy in the next 12 months, with 61 percent of top execs with firms of 1,000 or more agents saying it will “improve,” compared to 34 percent of leaders of brokerage firms with 51 to 100 agents.