REALTOR® Price Index down for second time in the
past 12 months
WALTHAM, Mass. – August 17, 2010 – The Massachusetts Association of REALTORS® (MAR) today announced that the July REALTOR® Market Index (RMI) is down for the second straight month. The July REALTOR® Price Index was also down for the second time in the past 12 months.
“Whether it was the heat of July, the end of the tax credit, or the continued uncertainty in the economy, REALTOR® members are feeling less certain about the market than they did last year or just this past spring,” said 2010 MAR President Kevin Sears, broker/co-owner of Sears Real Estate in Springfield. “If prices do go down as the REALTOR® Price Index would lead us to believe, then the combination of historically low interest rates should be the type of incentive that will bring buyers back into the market.”
In July 2010, the REALTOR® Market Index was 28.15, which was 25.72 percent lower than the 37.89 score recorded in July 2009. On a month-to-month basis, the July 2010 RMI was down less than one percent from the June 2010 score of 28.36. Measured on a 100-point scale, a score of 50 is the midpoint between a “strong” (100 points) and a “weak” (0 points) market condition.
The REALTOR® Price Index was down 6.13 percent in July 2010 compared to the same time last year (50.53 in 2009 to 47.43 in 2010). On a month-to-month basis the July index number was up 1.24 percent from the Home Sales Price Index number in June 2010 (46.85).
When REALTOR® members were asked how many of their clients were able to take advantage of the home buyer tax credit because of the closing deadline extension (from June 30 to September 30, 2010), 29 percent of respondents reported that 1-2 clients benefited and 18 percent responded that 3-4 (or more) clients benefited. Forty-six percent responded that none of their clients needed the extension to take advantage of the tax credit, while 7 percent responded that the question was not applicable.
About the REALTOR® Index Methodology:
The Massachusetts REALTOR® Market Index (RMI) and Price Index (RPI) are based on monthly responses from a random sampling of Massachusetts Association of REALTORS® members on the state of the housing market. More specifically, the survey asks members two basic questions pertaining to the real estate business in their market area in Massachusetts.
1. How would you describe the current housing market?
2. What are your expectations of home prices over the next year?
In addition to these standard questions, the survey each month includes one wildcard question that changes each month and is based on an industry hot topic.
The RMI is calculated in the following way. Respondents indicate whether conditions are, or are expected to be “strong” (100 points), “moderate” (50 points), and “weak” (0 points). The results are the average score for each question. A score of 50 is the threshold between a “strong” and a “weak” condition. Similarly, the question about home prices over the next year (REALTOR® Price Index) is calculated using five categories: “Rise 0-5%” (75 points), “Rise 5%+” (100 points), “Level” (50 points), “Fall 0-5%” (25 points), and “Fall >5%” (0 points).
About the Massachusetts Association of REALTORS®:
Organized in 1924, the Massachusetts Association of REALTORS® is a professional trade organization with more than 20,000 members. The term REALTOR® is registered as the exclusive designation of members of the National Association of REALTORS® who subscribe to a strict code of ethics and enjoy continuing education programs.
Editors and reporters: Please note that the term Realtor is properly spelled with an initial capital “R”, per the Associated Press Stylebook.