WASHINGTON (May 18, 2012) – The next two decades in housing markets depends largely on the Echo Boomers. That’s according to panelists at the “Shifting Demographics and Housing Choice: A Whole New World?” session today during the Realtors® 2012 Midyear Legislative Meetings & Trade Expo here.

There are approximately 62 million echo boomers in the U.S. Also called “millennials,” echo boomers are currently ages 17-31. According to the 2011 National Association of Realtors® Profile of Home Buyers and Sellers, younger home buyers – those ages 18-34 – represent 31 percent of all recent home purchases.

“We know that although many young people may be delaying home purchases in today’s economic climate, most of them still aspire to homeownership,” said NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami. “Realtors® are committed to ensuring that the dream of homeownership can become a reality for generations of Americans to come.”

During the session, economists NAR, the University of Washington, and Florida State University presented various research and data that illustrate the future of homeownership from a generational standpoint.

“Demography is destiny,” said NAR Chief Economist Lawrence Yun. “In that vein, demographics can provide very useful insights into the future of housing and homeownership, and the results of these reports indicate that certain generational shifts will have a significant impact on the real estate industry over the next two decades.”

NAR Economist Selma Hepp identified several key demographic trends on both ends of the housing age spectrum. The demand for affordable, accessible housing will increase as the 65-and-over population grows; at the same time, as seniors leave their homes and move into assisted living and other arrangements, they will add to the current supply of housing. Because of their sheer size, however, echo boomers will significantly impact the next two decades in housing.

“Echo boomers represent a long-term opportunity for a housing market recovery, but they are struggling in the current economic crisis,” said NAR’s Selma Hepp. “Consequently, demand for rental housing is likely to climb in the near term.”

As a group, the echo boomers are more racially and ethnically diverse than their baby boomer parents. While 65 percent of baby boomers are Caucasian, only 55 percent of echo boomers are Caucasian. Echo boomers are also more likely to be college educated than previous generations, and are remaining single longer.

Glenn E. Crenlin from the Runstad Center for Real Estate Studies at the University of Washington shared his insights into recent declines in homeownership and whether those declines indicate possible generational trends.

“It is worrying that the homeownership rate for those under 35 has fallen more sharply than the rate for older Americans,” said Crenlin. “But I think we need to examine homeownership rates by generation in a more balanced way. Although the Millennial generation does not own homes at the same percentages of those in other generations, many of them are still in the early stages of household formation – in fact, some of them are still in high school.”

Crenlin presented data from the American Community Survey that shows a significant increase in homeownership among millennials when compared to baby boomers at the same age. While 900,000 households in the millennial generation own their own home, only 500,000 baby boomer households owned their own homes at the same point in their lives.

“Given these data, what we’re looking at in terms of the millennial generation is likely only a delay in homeownership of three to five years, not a long-term trend away from homeownership itself,” said Crenlin.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

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Information about NAR is available at www.realtor.org. News releases are posted in the website’s “News and Commentary” tab.

National Association of Realtors® Chief Economist Lawrence Yun presented a modest and hopeful outlook for the commercial real estate market during the Economic Issues and Commercial Business Trends Forum at the Realtor® Midyear Legislative Meetings & Trade Expo in Washington, D.C. today.

“The commercial market has displayed modest growth lately,” said Yun. “Commercial real estate is the basis for much of the growth in the American economy, however challenges continue to exist. Despite this there are hopeful signs that the market might be slowly recovering due to recent job creation and an increase in consumer spending, among other indicators.”

Yun provided an economic overview during which he identified a number of areas that showed signs of improvement. Consumer spending has increased slightly, while personal incomes have risen. People also are now able to save money, proving that the savings rate had rebounded. Jobs are also accelerating and the stock market has shown a strong recovery.

“Consumer confidence has yet to return to normal and America still needs to create more jobs,” said Yun. “However, there are signs that show a positive overall financial improvement within the country.”

One major challenge that continues to plague the commercial market is lack of available credit. While there are notable improvements in capital for large commercial transactions, valued at $2.5 million or higher, there remain significant challenges for small business. According to NAR’s annual Commercial Real Estate 2012 Lending Survey, a majority of Realtors® are typically involved in less than $2 million transactions and are usually all cash – both of which make it difficult to obtain commercial lending. Yun pointed out that this is holding back the recovery potential in the commercial market, as well as hinder overall economic recovery.

“Since the economic crisis, smaller lenders have been shut out while larger lenders do a majority of the business,” said Yun. “Realtors® have reported that they typically obtain commercial mortgages from smaller banks. They find it frustrating that the larger banks are gaining market share at the expense of smaller sized lenders, which is hampering lending to small businesses.”

All major commercial real estate sectors are seeing improvement, but multifamily housing continues to be the healthiest with falling vacancy rates and rising rents. Families who were foreclosed upon and young people who cannot obtain a mortgage are choosing to rent, and Yun predicts this trend will continue. Based on the demand and lack of new construction on apartment buildings Yun estimates rents will increase by about four percent next year.

In the office and industrial sectors vacancy rates are improving and prices are beginning to level off. Transaction volume in the industrial sector is also beginning to pick up. Retail is showing signs of a slight recovery, which Yun predicts will be a consistent trend. Yun said overall, the commercial market is experiencing a slow healing process.

Jeffrey DeBoer, president and CEO of The Real Estate Roundtable joined Yun for the second half of the session where he spoke to the concerns and challenges that hinder the commercial market. DeBoer reiterated the need for more credit in the market, calling it a short-term problem that needs to be addressed immediately to bring the market back to life. Other issues DeBoer identified as critical to the market were the need for more equity and creation of more jobs. Looking long-term, DeBoer also said America needs to take a closer look at tax reform and preserve the mortgage interest deduction.

“We have to be vigilant, and talking to Congress – as Realtors® are doing today – is imperative,” said DeBoer. “It’s important that lawmakers understand what is going on in the commercial market and the challenges that persist. A healthy commercial market is vital to the economy and well-being of this country.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

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Information about NAR is available at www.realtor.org. News releases are posted in the website’s “News and Commentary” tab.

WASHINGTON (May 15, 2012) – Housing affordability conditions for all buyers reached a milestone in the first quarter, according to the National Association of Realtors®.

NAR’s composite quarterly Housing Affordability Index* rose to a record high of 205.9 in first quarter, based on the relationship between median home price, median family income and average mortgage interest rate. The higher the index, the greater the household purchasing power. This is the first time the quarterly index broke the 200 mark; recordkeeping began in 1970.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said market conditions are optimal for home buyers. “For those with good credit, we’ve never seen better housing affordability conditions or market opportunities than we see at present,” he said. “Although home prices are stabilizing and sales are rising, some buyers still have to jump through a lot of hoops to convince a lender that they are creditworthy, even for a mortgage that would be well within their means. This is especially true for self-employed buyers.”

Veissi noted home sales would be much higher if lending standards would return to normal.

The index shows the median income family, earning just under $61,000, could afford a home costing $325,500 in the first quarter, which is more than double the national median existing single-family home price of $158,100. The median monthly mortgage principal and interest payment for a median-priced home would take only 13.5 percent of gross income.

A companion index measuring the ability of first-time buyers to purchase a home also set a record, with the first-time buyer index reaching 135.8 in the first quarter.

Assumptions for the first-time buyer index include a lower income, at 65 percent of median family income, a starter home costing 85 percent of the median price, and a downpayment of 10 percent. This index means the typical entry-level buyer could afford a home costing $182,500, which is well above the overall median price.

“It’s never been easy to buy a first home because of the cash required for downpayment and closing costs, but conditions for first-time buyers who are able to get a mortgage have never been better,” Veissi explained.

Most first-time buyers choose a loan with a lower downpayment, often an FHA-insured loan with 3.5 percent down, and some use the VA program with no downpayment.

Both home prices and mortgage interest rates are expected to edge up modestly as the year progresses, but housing affordability will remain very favorable with the median-income household well positioned to afford a median-priced home. For all of 2012 the index is projected to set an annual record, averaging 191 for the year.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

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*A composite index of 100 is defined as the point where a median-income family household has exactly enough income to qualify for the purchase of a median-priced existing single-family home, assuming a 20 percent downpayment and 25 percent of gross income devoted to mortgage principal and interest payments.

Information about NAR is available at www.realtor.org. News releases are posted in the website’s “News and Commentary” tab. Statistical data in this release, as well as other tables and surveys, are posted in the “Research and Statistics” tab of www.realtor.org.

WASHINGTON (May 14, 2012) – The income and business of Realtors® is growing after many years of decline, according to the 2012 National Association of Realtors® Member Profile. 

The study’s results are representative of the nation’s Realtors®, who are members of NAR.  Realtors® account for about half of the 2 million active real estate licensees in the U.S.*  Realtor® members go beyond state licensing requirements by subscribing to NAR’s Code of Ethics and Standards of Practice, commit to continuing education and have access to professional resources to better serve the needs of clients.  Many non-member licensees are inactive or part time.

Paul Bishop, NAR vice president of research, said member income rose for the first time since 2002.  “The median income of a Realtor® rose 2.3 percent to $34,900 in 2011, which is the first overall gain in nine years,” he said.  “Many Realtors® have persevered through very difficult market conditions and understand the cyclical nature of the business, but have never had to endure a cycle like the one that is presently waning.  The good news is home sales are rising, overall activity is expected to be notably better this year and individual prospects are much brighter given there are fewer Realtors® than several years ago.”

Members licensed as brokers typically earned $48,400 in 2011, while the median for sales agents was $27,200.

Higher median income was reported by experienced NAR members in the business for 16 years or more, who earned $50,200.  Realtors® working 60 hours a week or more earned $80,900, and 17 percent of all members earned a six-figure income.

The typical NAR member has 11 years of experience and works 40 hours per week; 60 percent are women, who account for 55 percent of brokers and 66 percent of sales agents.  More than nine out of 10 Realtors® are certain they will remain in the business for at least two more years.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said Realtors® go the extra mile.  “Realtors® bring value to their clients by raising professional standards with specialized knowledge and expertise, which includes training for designations and certifications offered by NAR,” he said. 

“Our members are tapping into resources that give them an edge up on challenging conditions, whether it’s helping a buyer negotiate a distressed sale or find a loan, or in helping a seller with effective marketing.  Beyond that, we’re fighting for both home owners and buyers in Washington and beyond because homeownership matters to the well-being of this nation,” Veissi said.

Thirty-two percent of Realtors® hold at least one out of six certifications in specialized training.  The most popular area of training, driven by the ongoing elevated level of distressed homes on the market, is the Short Sales and Foreclosures Resource Certification, held by 18 percent.

The second most popular Realtor® certification is REPA (Real Estate Professional Assistant), 15 percent, followed by e-Pro, held by 11 percent of members to help them better serve the online needs of clients.

In addition, 33 percent of Realtors® have obtained at least one professional designation.  The most popular is GRI (Graduate Realtor® Institute), held by 19 percent of respondents; ABR® (Accredited Buyer Representative®), 15 percent; and CRS® (Certified Residential Specialist®), 10 percent.  Smaller shares hold one of 14 other designations.

The survey shows the typical NAR member is 56 years old; only 2 percent of all Realtors® are under 30 years of age and another 4 percent are 30 to 34 years old; 22 percent are 65 or over.

Repeat business and referrals are important to Realtor® business.  Repeat business accounted for a median 19 percent of activity in 2011 and is higher for those with more experience – for members with 16 years or more in the business, that number rises to 38 percent.  Referrals accounted for an additional 20 percent of business activity.

Most members – 57 percent – are licensed sales agents; 27 percent are brokers, 18 percent broker associates, 3 percent appraisers, and 1 percent other (some hold more than one license).  Fourteen percent of members have one personal assistant, while 4 percent have two or more personal assistants.

There are two sides to every real estate transaction – one each for the seller and the buyer.  Among Realtor® members the median number of transaction sides or commercial deals handled in 2011 was 10, up from eight transactions sides in 2010.  The median brokerage sales volume was $1.3 million, up from $1.1 million in 2010.

Several factors limit potential clients in completing transactions.  Members said the biggest impediment was difficulty in obtaining a mortgage, cited by 30 percent of respondents.

Sixty-nine percent of respondents are compensated through a split commission arrangement, 17 percent receive all of the commission and another 3 percent receive a commission plus a share of profits; 11 percent received some other form of compensation.  Eight out of 10 members work as independent contractors for their firms.  Seventy-two percent of Realtors® receive no fringe benefits, although 23 percent are covered by errors and omissions insurance; only 6 percent receive health insurance.

Eight out of 10 NAR members focus on residential sales and 72 percent have secondary real estate specialties.  Fifteen percent also offer relocation services, 14 percent commercial brokerage, 14 percent commercial property management, 9 percent counseling and 8 percent land development.  Smaller percentages were also in residential property management, residential appraisal, auctions, international or commercial appraisal.

Residential brokerage was listed as a secondary business for the 10 percent of respondents who have other primary specialties.

Twenty-one percent of Realtors® belong to one or more of NAR’s affiliated institutes, societies or councils; the most common is CRS (Council of Residential Specialists), identified by 11 percent.

Most members begin their careers in other fields and bring a wide range of expertise and experience to the profession; only 5 percent report real estate is their first career.  Previous full-time careers include management, business or financial, 18 percent; sales or retail, 15 percent; office or administrative support, 10 percent; and education, 7 percent.  Twelve other categories were each 5 percent or less; 17 percent were “other.”

Sixty-two percent of NAR members have a personal website, operational for a median of six years, and nine out of 10 report their firm has a Web presence.  Fifty-four percent of the respondents use social or professional networking sites and 10 percent have a blog.  Realtors® use a variety of communications methods, with 93 percent preferring e-mail for current clients or customers, followed by telephone at 89 percent.

Respondents worked for a firm with a median of 23 brokers and agents, typically with one office, and had been with that firm for six years.  Six out of 10 members are affiliated with an independent firm, and 38 percent are with a franchised company.  Eleven percent of Realtors® report their firm was bought by or merged with another during the past two years, the same as in the 2011 study.

Nine out of 10 Realtors® are homeowners.  They often invest in real estate and own other homes in addition to their primary residence – 53 percent own at least one residential investment property and 29 percent own at least one commercial property.  In addition, 19 percent own at least one vacation home.

NAR members are active in the political process – 93 percent participated in the last national election and 82 percent voted in the last local election.  They are well-educated, with 48 percent holding at least a bachelor’s degree; 16 percent are fluent in other languages.

The 2012 National Association of Realtors® Member Profile is based on a survey of 58,823 members which generated 6,245 usable responses, representing an adjusted response rate of 10.8 percent.  Survey responses were weighted to be representative of state level NAR membership.  Income and transaction data are for 2011, while other data represent member characteristics in early 2012.  The study can be ordered by calling 800-874-6500, or online at www.realtor.org/prodser.nsf/Research.  The profile costs $19.95 for NAR members and $149.95 for nonmembers.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

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*Data from the Association of Real Estate License Law Officials shows there are approximately 2.04 million active real estate brokers and sales agents in the U.S. out of a total 3.04 million licensees.  To be considered active, a licensee generally was involved in at least one real estate transaction in the previous year.

REALTOR® is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS® and subscribe to its strict Code of Ethics.  Not all real estate agents are REALTORS®.  All REALTORS® are members of NAR.

WASHINGTON (May 9, 2012) – Median existing single-family home prices are firming in many metropolitan areas, while improving sales and declining inventory are creating more balanced conditions, according to the latest quarterly report by the National Association of Realtors®.

The median existing single-family home price rose in 74 out of 146 metropolitan statistical areas¹ (MSAs) based on closings in the first quarter from the same quarter in 2011, while 72 areas had price declines.  In the fourth quarter of 2011 only 29 areas were showing gains from a year earlier.  A new breakout of income requirements on a metro basis shows most buyers have the necessary income to buy a home in their area, assuming a favorable credit rating.

Lawrence Yun, NAR chief economist, said there is some volatility in the price performance.  “Home prices are more volatile than normal because of sudden upswings in buyer activity in some localities, and also are affected by the prevalence of distressed sales,” he said.  “Home prices lag sales activity because the transactions were negotiated mostly in the previous quarter.  Given the steadily dwindling supply of inventory and notably higher listing prices that are being negotiated today, prices are expected to show further improvements in the near future.”

Yun said a big part of the story is housing inventory.  “We now have broad shortages of lower priced homes in much of the country, with very tight supply in Western states for homes through the middle price ranges.  This is good news for many sellers who wish to list now, or for those waiting for prices to improve.”

At the end of the first quarter there were 2.37 million existing homes available for sale, which is 21.8 percent below the close of the first quarter of 2011 when there were 3.03 million homes on the market.  There has been a sustained downtrend since inventories set a record of 4.04 million in the summer of 2007.

The national median existing single-family home price was $158,100 in the first quarter, which is 0.4 percent below $158,700 in the first quarter of 2011.  The median is where half sold for more and half sold for less.  Distressed homes² – foreclosures and short sales which sold at deep discounts – accounted for 32 percent of first quarter sales; they were 38 percent a year ago.

Total existing-home sales,³ including single-family and condo, increased 4.7 percent to a seasonally adjusted annual rate of 4.57 million in the first quarter from a downwardly revised 4.37 million in the fourth quarter, and were 5.3 percent above the 4.34 million level during the first quarter of 2011 when sales spiked.

“This is the highest first quarter sales pace since 2007,” Yun said.  “With strong market fundamentals, total home sales this year should rise 7 to 10 percent.”

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said there are more opportunities in today’s market.  “Historically favorable housing affordability conditions are making it easier for buyers to enter the market despite the unnecessarily tight credit conditions,” he said.  “Housing supply and demand are roughly balanced with overall housing supply at the lowest level in six years, putting sellers on an even footing with buyers in most markets.”

Included with this report is a new breakout on qualifying incomes to purchase a median-priced existing single-family home on a metropolitan area basis, assuming downpayments of 5 percent, 10 percent or 20 percent, and an interest rate of 4 percent with 25 percent of gross income devoted to mortgage principal and interest.

“Qualifying incomes are well below median incomes in most of the country, which means home buyers generally can stay well within their means,” Yun said.  “For example, a buyer in Indianapolis making a 10 percent downpayment would need an annual income of $24,000⁴ to purchase a median-priced home, while in Seattle it would be $55,300.  For now, buyers are facing an extraordinarily advantageous situation if they can obtain a mortgage.”

The national median family income was $61,000 in the first quarter.  However, to purchase a home at the national median price, a buyer making a 5 percent downpayment would only need a $34,700 income.  With a 10 percent downpayment the required income would be $32,900, while with 20 percent down, the income drops to $29,300. 

First-time buyers purchased 33 percent of homes in the fourth quarter, unchanged from the fourth quarter; they were 32 percent in the first quarter of 2011.

The share of all-cash home purchases in the first quarter was 32 percent, up from 29 percent in the fourth quarter; they were 33 percent in the first quarter of 2011.  Investors, drawn by bargain prices and who make up the bulk of cash purchasers, accounted for 22 percent of all transactions in the first quarter, up from 19 percent in the fourth quarter; they were 21 percent a year ago.

In the condo sector, metro area condominium and cooperative prices – covering changes in 52 metro areas – showed the national median existing-condo price was $157,200 in the first quarter, which is up 3.4 percent from the first quarter of 2011.  Eighteen metros showed increases in their median condo price from a year ago and 34 areas had declines.

Regionally, existing-home sales in the Northeast jumped 8.6 percent in the first quarter and are 6.6 percent above the first quarter of 2011.  The median existing single-family home price in the Northeast declined 3.2 percent to $226,300 in the first quarter from a year ago.

In the Midwest, existing-home sales rose 5.5 percent in the first quarter and are 11.7 percent higher than a year ago.  The median existing single-family home price in the Midwest increased 0.8 percent to $125,300 in the first quarter from the same quarter in 2011.

Existing-home sales in the South increased 2.1 percent in the first quarter and are 4.1 percent above the first quarter in 2011.  The median existing single-family home price in the South rose 1.2 percent to $143,600 in the first quarter from a year earlier. 

Existing-home sales in the West rose 5.9 percent in the first quarter and are 1.4 percent higher than a year ago.  The median existing single-family home price in the West slipped 0.9 percent to $196,200 in the first quarter from the first quarter of 2011.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

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NOTE:  NAR releases quarterly median single-family price data for approximately 150 Metropolitan Statistical Areas (MSAs). In some cases the estimated MSA prices may not coincide with data released by state and local Realtor® associations.  Any discrepancy may be due to differences in geographic coverage, product mix, and timing.  In the event of discrepancies, Realtors® are advised that for specific business purposes, local data from their association may be more relevant.

Data tables for MSA home prices (single family and condo) are posted at www.realtor.org/topics/metropolitan-median-area-prices-and-affordability.  For areas not covered in the tables, please contact the local association of Realtors®.

¹Areas are generally metropolitan statistical areas as defined by the U.S. Office of Management and Budget.  A list of counties included in MSA definitions is available at:  www.census.gov/population/estimates/metro-city/0312msa.txt.

Regional median home prices include rural areas and samples of many smaller metros that are not included in this report; the regional percentage changes do not necessarily parallel changes in the larger metro areas.  The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns.  Quarter-to-quarter comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns.

Median price measurement reflects the types of homes that are selling during the quarter and can be skewed at times because the level of distressed sales, which artificially depress median prices, can vary notably in given markets.  Annual price measures generally smooth out any quarterly swings.

NAR began tracking of metropolitan area median single-family home prices in 1979; the metro area condo price series dates back to 1989.

Because there is a concentration of condos in high-cost metro areas, the national median condo price often is higher than the median single-family price.  In a given market area, condos typically cost less than single-family homes.  As the reporting sample expands in the future, additional areas will be included in the condo price report.

²Distressed sales, first-time buyers, investors and all-cash transactions are from a survey for the Realtors® Confidence Index.

³The seasonally adjusted annual rate for a particular quarter represents what the total number of actual sales for a year would be if the relative sales pace for that quarter was maintained for four consecutive quarters.  Total home sales include single family, townhomes, condominiums and co-operative housing.

Seasonally adjusted rates are used in reporting quarterly data to factor out seasonal variations in resale activity.  For example, sales volume normally is higher in the summer and relatively light in winter, primarily because of differences in the weather and household buying patterns.

⁴Income figures are rounded to the nearest hundred.

Second quarter metro area home prices and quarterly existing-home sales will be released August 9 at 10:00 a.m. EDT.

Information about NAR is available at www.realtor.org. News releases are posted in the website’s “News and Commentary” tab.  Statistical data in this release, as well as other tables and surveys, are posted in the “Research and Statistics” tab of www.realtor.org.

REALTOR® is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS® and subscribe to its strict Code of Ethics.  Not all real estate agents are REALTORS®.  All REALTORS® are members of NAR.

WASHINGTON (May 3, 2012) – Although commercial real estate markets showed signs of recovery in 2011, commercial lending standards have tightened in the past year for small businesses and scuttled a major portion of contracted transactions for smaller properties, according to the National Association of Realtors® annual Commercial Real Estate 2012 Lending Survey.

Lawrence Yun, NAR chief economist, said there is a significant split in commercial lending depending on value. “This is very much a tale of two markets. There have been notable improvements in capital for large commercial transactions valued at $2.5 million or higher, but there remain significant challenges for small business,” he said.

“Our Realtor® members typically are involved in helping commercial clients with purchases under $2 million, where a lack of capital has caused two out of three respondents to report deals have fallen through. Given that most jobs are created through small business, the lack of capital is hurting small businesses and the overall economic recovery.”

According to Real Capital Analytics, more than 13,000 major properties valued at $2.5 million or higher traded hands in 2011. Sales volume increased 51 percent over 2010 to $205.8 billion, with the lion’s share of lending funds coming from big banks. Other funding sources include insurance companies and institutional investors.

By contrast, the NAR survey shows that small business transactions rely heavily on smaller regional and local banks, and small private investors, for lending capital.

Respondents indicate nearly 30 percent of smaller commercial properties are purchased with cash, reflecting the tight credit environment, and some are seller financed. “When credit is tight, cash is king,” Yun added.

The most common types of property transactions referenced in the survey were multifamily, land, warehouse, suburban office and retail strip centers. Other property types include industrial flex space, central business district office, freestanding retail, and restaurants.

Realtors® report the system is clogged with property that must be sold or refinanced, which is significantly impacting the recovery. Long-time investors who never had a problem getting a loan in the past are now being declined.

More than half of respondents say lending is just as stringent as a year ago, while 23 percent say it is more stringent; 20 percent say it is less stringent but not near historical averages. Members also complained about banks being over-regulated, and refinancing being denied due to stringent internal lender underwriting requirements or low appraisal valuations.

Thirty-six percent of Realtors® said clients used the Small Business Administration commercial refinance program, but of those who didn’t, 45 percent said it was due to burdensome application and reporting requirements.

The Commercial Real Estate 2012 Lending Survey is published by the NAR Research Division for the commercial community. In April 2012, a random sample of 32,459 Realtors® with an interest in commercial real estate was invited to complete an online survey. A total of 474 responses were received, for an overall response rate of 1.46 percent.

NAR’s Commercial Division, formed in 1990, provides targeted products and services to meet the needs of the commercial market and constituency within NAR. The NAR commercial components include commercial members; commercial committees, subcommittees and forums; commercial real estate boards and structures; and the NAR commercial affiliate organizations – CCIM Institute, Institute of Real Estate Management, Realtors® Land Institute,

Society of Industrial and Office Realtors®, and Counselors of Real Estate.

Approximately 78,000 NAR and institute affiliate members specialize in commercial brokerage and related services, and an additional 232,000 members offer commercial real estate services as a secondary business.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

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The commercial real estate forecast and quarterly market report will be released on May 24 at 10 a.m. EDT.

Information about NAR is available at www.realtor.org. News releases are posted in the website’s “News and Commentary” tab. Statistical data in this release, as well as other tables and surveys, are posted in the “Research and Statistics” tab of www.realtor.org.