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Thursday, February 20, 2014

February Real Estate Index - Request for additional questions

Included in the survey administered to produce the Consumer Sentiment and Inflation Expectations Report are questions used to generate a Real Estate Index for Virginia. We began this index and release in November 2013, so it continues to be a work in progress.

Today the February release came out and can be found here.

The first figure in the release is shown below and it sums up our findings: the real estate market is improving, but sentiments are stronger for sellers. Why? We plan to add probing questions in the May survey to better discern this, but I believe that it has a lot to do with low inventories (increasing optimism of sellers) and rising interest and flood insurance rates (decreasing optimism of buyers).

The overall measure shows respondents sentiment of the overall real estate market where they live, both today compared to a year ago (current) and next year compared to today (future). "Sell" and "Buy" uses respondents answers about the current/future environment to sell/buy a property. The index value is the difference between those reporting optimism and pessimism; a value of zero suggests a balance between the two. The black line illustrates a thriving market.

What probing questions would you like us to ask? We have data on income, race/ethnicity, age, etc., but would like to add follow-up questions to get to the details of respondents' beliefs.


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