Tammy Medlock/Coldwell Banker Realty

Multiple offers are still prevalent on bids despite slowing demand and rising mortgage rates, according to the March Realtors Confidence Index Survey.

Realtors reported an average of nearly five offers on each home that sold in March, the same as in February and one year ago.

Buyers are still finding it hard to have a successful offer on the first try because of competition, especially with cash buyers who accounted for 28 percent of sales (23 percent one year ago).

On average, half of buyers made two prior offers before a successful third offer.

Fifty-seven percent of buyers also made a price offer above the list price, up from 48 percent in February.

Demand is weakening but still outpacing supply

Multi-offers on a home are still prevalent because even if buyer traffic is weakening it is still outpacing supply.

Realtors reported that on average they took 4.1 clients on a home tour in March (4.8 one year ago), but only had on average 1.4 listings during the month (1.6 one year ago).

The Realtors Buyer Traffic Index registered at 62 (77 one year ago) but the Realtors Seller Traffic Index was just at 36 (35 one year ago).

An index below 50 means generally ‘weaker’ conditions than one year ago. With homebuying demand still outpacing supply, properties typically stayed on the market for a shorter time compared to one year ago, at 17 days on market (18 days in the prior month, 18 days one year ago).

Eighty-seven percent of listings were on the market for less than one month (84 percent in the prior month, 83 percent one year ago).

Inventory of Existing Homes for Sale Nearly 2 Million Short of 6 Months’ Supply

Buyer competition remains intense due to the short supply of homes on the market.

As of the end of March, there were 950,000 homes on the market (active and unsold), equivalent to two months of supply at the current monthly sales pace.

A desirable level is about six months based on the historical level, so home prices are appreciating at a modest pace of 5 percent.

At six months of supply, the inventory of homes on the market should be at 2.9 million, which means a

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Prices are likely to continue to hold firm even as demand slows due to tight supply. NAR expects home price appreciation to moderate with demand, but prices will continue to appreciate by about 5 percent by year-end, not decline, due to the tight supply.

Some home projects receive high marks on ‘Joy Score’

Continued from page 18 high Joy Score, with 10 being considered a perfect Joy Score. Some tasks that were awarded scores of 10 were as follows: painting a home's entire interior, painting one room, adding a home office, hardwood floor refinishing, closet renovation, and insulation upgrades, among other labors.

Hardwood floor refinishing received a 10 Joy Score because the homeowners felt happiness and satisfaction in their home after undertaking the upgrade. Sixty-four percent of those polled answered that they have an increased sense of enjoyment when they are at home now that their hardwood flooring is installed. Another 64 percent said just thinking about the completed project gives them a "major sense of accomplishment."

Adding a new home office is another task that earned a perfect Joy Score based on homeowners' sentiments. Ninety-one percent of consumers said they have a greater desire to be home now that their office is in place. Seventy-three percent said they have an increased sense of enjoyment when they are home.

The NAR/NARI report also examines numerous remodeling tasks and provides a cost recovery estimate for the projects. The genuine cost of each remodeling project and cost recovery are influenced by many factors, including project design, quality of materials, location, age and condition of the home, and homeowner preferences.

"Quite often, an added benefit to home renovations is the possibility of an increase in the home's value, which is a reason why some people remodel," said Lautz. "This is especially advantageous to a homeowner who may be considering selling their house or converting the home to a rental property."

Realtors provided an estimate of the likely dollar value each project would add to a house during resale. In comparing that dollar value to the estimated cost of each job provided by NARI members, a Recovered Project Cost percentage was tabulated. In regard to interior projects, the highest percentage cost recovered was from refinishing hardwood floors at 147 percent. New wood flooring was at 118 percent, and an insulation upgrade was at 100 percent. Among exterior projects, new roofing and a new garage door both recovered 100 percent of the project costs.

Kitchen upgrades were also popular among homeowners, with the task receiving a 9.8 Joy Score. The top reason (32 percent) to take on a kitchen overhaul was the desire to upgrade worn out surfaces, finishes or materials. The second top reason (20 percent) was to add features and improve livability.

According to NARI remodelers' cost estimate, the average kitchen remodel would be about $45,000. Realtors estimated that $30,000 of that sum could be recovered as a result of the renovation. That would be a 67 percent recovery rate.