In a monthly survey of REALTORS®, respondents are asked “Compared to the same month last year, how would you rate the past month’s traffic in neighborhood(s) or area(s) where you make most of your sales?” Respondents rate buyer traffic as “Stronger” (100), “Stable” (50), or “Weaker” (0) and the responses are compiled into a diffusion index. An index greater than 50 means that more respondents reported “stronger” than “weaker” conditions.
The chart below shows buyer traffic conditions in October–December 2017 compared to conditions one year ago, according to the December 2017 REALTORS® Confidence Index Survey. Except for four states, REALTORS® reported that buyer conditions were “stable” (unchanged) to “very strong” compared to conditions one year ago. Respondents from Texas and Florida, states which were hit by hurricanes Harvey and Irma, generally reported “strong” buying activity compared to one year ago. On the other hand, Alaska, North Dakota, Louisiana, and West Virginia respondents generally reported “weak” buyer traffic compared to one year ago, and this may be related to the effect of the slump in oil prices since 2015, though oil prices have started to firm up again in 2017 as OPEC cut its oil production.
Supply conditions in October –December 2017 is improving but supply is still tight, with only 26 states having seller traffic conditions that are “stable” (unchanged) or “strong” compared to conditions one year ago. Most of the states with stable or improving seller activity in October-December 2017 are in southern area of the United States.
Nationally, the REALTORS® Buyer Traffic Index registered at 66, while the REALTORS® Seller Traffic Index was at 47. An index above 50 indicates that more respondents reported stronger than weaker conditions compared to one year ago, so the data indicates that homebuying demand continues to outpace supply.
The REALTORS® Buyer Traffic Index as Leading Indicator of Contracts and Sales
The REALTORS® Buyer Traffic Index is a leading indicator of future contracts (pending home sales sales) and closings (existing home sales). The REALTORS® Buyer Traffic Index tends to lead pending home sales by one month and existing home sales by two months. The uptick in the November and December 2017 Buyer Traffic Index indicates a continued uptick in sales on a month-to-month basis in January and February 2018.
 In generating the indices, NAR uses data for the last three surveys to have close to 30 observations. Small states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have fewer than 30 observations. For graphical purposes, index values from 25.01 to 45 are labeled “Weak,” values of 45.01 to 55 are labeled “Stable,” values of 55.01 to 75 are labeled “Strong,” and values greater than 75 are labeled “Very Strong.”
In a monthly survey of REALTORS®, seller’s agents who closed a sale are asked “How many offers were received for the most recent property you sold in the past month?
Among seller’s agents who closed a sale in December 2017, the respondents reported they received 2.2 offers (which means sellers received between two to three offers) on their most recent sale, according to the December 2017 REALTORS® Confidence Index Survey. The number of buyer offers on a home has remained unchanged in the past two years. Why so? On the one hand, an improving job market tends to prop up the number of buyer offers, assuming the same level of homes listed for sale. Yet in reality, the number of homes being offered for sale have fallen to their lowest level since January 1999 (3.2 months’ supply in December 2017), and this has pushed up prices, dampening demand. Since January 2012, the median home price of existing homes sold has increased by 60 percent.
The number of buyer offers exhibits a seasonal fluctuation, with the number of offers tending to peak in April through June, as households plan their move/relocation around the school opening in August/September.
Under a seller’s market, only 20 percent of sellers offered incentives, mostly by assisting with closing costs, providing warranties, undertaking remodeling, providing appliances, assistance with condominium fee payments, and other incentives.
Nearly half of sellers vacated the property between contract acceptance and closing, followed by 5 percent of sellers who vacated the property after closing, under leaseback terms. The high share of sellers who vacate the property on leaseback terms may, in part, reflect the difficulties home sellers face in buying/moving into a new property or finding another abode.
About one in five sellers held the property as an investment property, either to rent out or as a financial investment. This share has been relatively constant, which indicates that existing investors are not increasingly cashing out yet on their investments by selling the property.
 Respondents are asked about the characteristics of the most recent sale, and altogether, these responses are deemed to comprise a representative sample of total sales because the last sale is a random sample of the sales for the month.
Amid strong demand and tight supply, REALTORS® reported that properties that sold in December 2017 were typically on the market for 40 days in November 2017, down from 52 days compared to the same month last year, according to the December 2017 REALTORS® Confidence Index Survey. The median days on market have been broadly on a downtrend since 2011 when the properties typically were on the market for three months from May 2011, when this question was first asked in the RCI Survey, through March 2012. For the full year of 2017, the median days on market was 35 days (43 days in 2016).
During October–December 2017, properties sold in less than 31 days in 15 states: Washington, Oregon, California, Nevada, Utah, Colorado, North Dakota, South Dakota, Nebraska, Kansas, Minnesota, Indiana, Kentucky, Rhode Island, and Massachusetts. Properties also sold in less than 31 days in the District of Columbia.
Amid fewer listings for sale in many areas, properties continued to sell at a faster pace in many metro areas. Of the 500 metro areas tracked by Realtor.com, days on market have dropped in 388 areas, 78 percent of the areas.
The metro areas where properties were listed for the shortest time in December 2017 compared to one year ago are San Jose-Sunnyvale-Sta. Clara, CA (37 days), San Francisco-Oakland-Hayward, CA (45 days), Vallejo-Fairfield, CA (45 days), Nashville-Davidson-Murfreesboro-Franklin, TN (46 days), Ogden-Clearfield, UT (47 days), Provo-Orem, UT (48 days), Stockton-Lodi, CA (48 days), and San Diego-Carlsbad, CA (49 days).
Use the data visualization below to check out the data across metro areas.
 In generating the median days on market at the state level, NAR uses data for the last three surveys to have close to 30 observations. Small states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have fewer than 30 observations.