Multiple snow storms in February negatively impacted market activity
WALTHAM, Mass. – March 19, 2013 – The Massachusetts Association of REALTORS® (MAR) reported today that the REALTOR® Market Confidence Index (RMCI) hit another all-time high in February, the REALTOR® Price Confidence Index (RPCI) was also up compared to 2012. This is only the second time since the data has been tracked that the RMCI was higher than the REALTOR® Price Confidence Index. A majority of REALTOR®-members who responded, believed that the snowy February had a negative impact on the real estate market.
“The high level of confidence that REALTORS® continue to possess about the current real estate market conditions is encouraging as we enter the spring market,” said 2013 MAR President Kimberly Allard-Moccia, broker-owner of Century21 Professionals in Braintree. “However, it will be interesting to see if the Price Confidence Index moves back past the Market Confidence Index next month, or if this is a start of a new dynamic.”
In February 2013, the REALTOR® Market Confidence Index was 71.82, which was up 82 percent from the February 2012 score of 39.47. This is an all-time high for the RMCI and the 19th straight month of year-over-year increases. On a month-to-month basis, the February RMCI was UP 11 percent from the 65.00 score in January 2013. 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 69.55 in February, which was up 27 percent from the February 2012 RPCI of 54.78. This is the 13th straight month of year-over-year increases and the 10th straight month the RPCI has been over the 60-point mark. On a month-to-month basis, the RPCI was down 8.22 percent from the January 2013 RPCI of 75.78. This was the first month since May 2010 and the home buyer tax credit that the RPCI was lower than the Market Confidence Index (RCMI 39.49 vs. RCPI 38.38).
REALTOR®-members were asked what type of impact the multiple weekend snow storms had on the market in February. Of those REALTORS® who responded to the survey, 14 percent answered there would be a significant negative impact on the market, 37 percent responded there would be a moderate negative impact on the market. Thirty-five percent felt there would be no change from the current trend. Two percent responded there would be a significant positive impact on the market and 11 percent responded there would be a moderate positive impact on the market.
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.