Impending ‘Fiscal Cliff’ has varied impact on
buyer and seller clients
WALTHAM, Mass. – December 18, 2012 – The Massachusetts Association of REALTORS® (MAR) reported today that confidence in the overall real estate market continued to be positive in November according to the latest *REALTOR® Market Confidence Index (RMCI). The *REALTOR® Price Confidence Index (RPCI) hit its second highest mark in November. REALTOR®-members reported there was some concern about the impending “fiscal cliff” with their buyer and seller clients in November.
“REALTOR®-members continued to feel better about the market and price stability in Massachusetts compared to the same time last year,” said 2012 MAR President Trisha McCarthy, broker at Keller Williams Realty in Newburyport. “However, REALTORS tell us that their buyer and seller clients have concerns about the ‘fiscal cliff’. This just underscores the need for Congress to reach a compromise, without tampering with the mortgage interest deduction which remains so essential to the continuing housing recovery.”
In November 2012, the REALTOR® Market Confidence Index was 57.31, which was up 127 percent from the November 2011 score of 25.24. This is also 16th straight month of year-over-year increases and the eighth straight month over the 50-point mark. On a month-to-month basis, the November RMCI was down 1.8 percent from the 58.38 score in October 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 Confidence Index was 67.54 in November, which was the second highest all-time (highest was October 2012). The November index was up 53 percent from the November 2011 RPCI of 44.29. This is the 10th straight month of year-over-year increases and the seventh straight month the RPCI has been over the 60-point mark. On a month-to-month basis, the RPCI was down 1.7 percent from the October 2012 RPCI of 68.68.
REALTOR®-members were asked if they felt the impending “fiscal cliff” was impacting their buyer and seller clients. When asked specifically about seller clients and the ability to sell their homes, 49 percent responded “yes, their clients were concerned”. Of that number 44 percent of sellers were undecided at that point, while five percent would be taking their home off the market if it did not sell by December 31, 2012. Thirty-seven percent of respondents stated that their clients were not concerned and would keep their homes on the market, while 15 percent who responded either didn’t work with seller clients or chose “other”.
When asked specifically about their buyer clients, 37 percent of REALTOR®-members who responded felt there was concern about the “fiscal cliff”. Of those, 31 percent felt a deal would be reached and they would continue to look after December 31, 2012. Six percent thought their clients would stop looking after the end of the year. Twenty-one percent of REALTORS® felt their clients were not concerned and would continue to look for homes. The largest group of respondents (34 percent) was more concerned about the lack of inventory. Nine percent of respondents either don’t work with buyer clients or chose “other”.
About the REALTOR® Index Methodology:
The Massachusetts REALTOR® Market Confidence Index (RMCI) and Price Confidence Index (RPCI) 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 RMCI 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 Confidence 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.
*Please note, starting with the release of the September 2012 Index data, the REALTOR® Market Index will be renamed the REALTOR® Market Confidence Index and the REALTOR® Price Index will be renamed the REALTOR® Price Confidence Index.
Editors and reporters: Please note that the term Realtor is properly spelled with an initial capital “R”, per the Associated Press Stylebook.