WALTHAM, Mass. – September 18, 2012 – The Massachusetts Association of REALTORS® (MAR) today announced that the REALTOR® Market Index (RMI) has gone up for the 13th straight month compared to the year before. The REALTOR® Price Index (RPI) continues to be near all-time highs and has been over the 60-point mark for the fourth straight month. The majority of REALTORS® surveyed are reporting that they see inventory levels either staying the same or increasing somewhat over the next six months.
“Regaining confidence in the market is a gradual process, but one that fortunately has been improving for 13 straight months,” said 2012 MAR President Trisha McCarthy, broker at Keller Williams Realty in Newburyport. “The best way to ensure this upward trend continues is to increase the number of homes for sale. The only way that can happen is for homeowners who want to sell, but have held off, to make the decision to re-enter the market.”
In August 2012, the REALTOR® Market Index was 56.41, which was up 97 percent from the August 2011 score of 21.63. This is the 13th straight month of year-over-year increases and the fifth straight month over the 50-point mark. On a month-to-month basis, the August RMI was down 2.11 percent from the 57.63 score in July 2012. 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 64.19 in August, which was up 61 percent from the August 2011 RPI of 39.92. This is the seventh straight month of year-over-year increases and the fourth straight month the RPI has been over the 60-point mark. On a month-to-month basis, the RPI was down 1.24 percent from the July 2012 RPI of 65.00.
With the number of homes for sale trending down, REALTOR® members were asked in August their thoughts on where inventory levels were headed in the next six months. Forty-one percent of respondents answered that they thought inventory will be at the same level as today. Another 41 percent thought inventory would somewhat increase (37%) or significantly increase (2%). Nineteen percent answered that inventory will somewhat decrease with one percent answering inventory would significantly decrease over the next six months.
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 19,000 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.