Both Indexes hit the 60-point mark
WALTHAM, Mass. – June 19, 2012 – The Massachusetts Association of REALTORS® (MAR) today announced that for the second straight month both the REALTOR® Market Index (RMI) and the REALTOR® Price Index (RPI) hit all-time highs in May. Despite the upbeat mood of REALTORS® across the state, 47% of those responding to the survey feel their clients are having a more difficult time securing financing than the year before.
“These new Index highs are a direct result of the steady strides the real estate market is making here in Massachusetts,” said 2012 MAR President Trisha McCarthy, broker at Keller Williams Realty in Newburyport. “We continue to see positive gains on the employment front and we hope that greater access to financing for qualified buyers follows suit.”
In May 2012, the REALTOR® Market Index was 60.38, which was up 115 percent from the May 2011 score of 28.00. This is the highest point the Index has reached since the association has been tracking the data. In addition, this is the first time the RMI has reached the 60-point mark. On a month-to-month basis, the May RMI was up 7.2 percent from the 56.31 score in April 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 62.38 in May, which was up 60.4 percent from the May 2011 RPI of 38.89. This is the highest point reached on the RPI scale since the data has been tracked and first time that the RPI has reached the 60-point mark as well. This is also the first time there has ever been four straight months over the 50-point mark. On a month-to-month basis, the RPI was up 4.2 percent from the April 2012 RPI of 59.86.
In May 2012, REALTOR® members were asked to describe their clients' ability to secure financing in the current lending environment? Forty-seven percent responded it was either “somewhat more difficult” (36%) or “significantly more difficult” (11%) to secure financing than the year before. Forty-two percent reported it had “remained the same” while 10 percent reported it was “somewhat easier” (9%) or “significantly easier” (1%) than the year before.
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.