REALTOR®-members describe 2013 as the year of ‘no inventory’
WALTHAM, Mass. – January 22, 2013 – The Massachusetts Association of REALTORS® (MAR) reported today that the December REALTOR® Market Confidence Index (RMCI) was down for the second straight month in December. However, this had no impact on the December REALTOR® Price Confidence Index (RPCI) as it was up again compared to the same month in 2012. The results of the December “Hot Topic” question declared 2013 as the year of “no inventory.”
"The real estate market was good in 2013 as it continued to edge toward recovery, but the lack of homes for sale and concerns about interest rates going up caused REALTOR® confidence to decline in the last two months," said 2014 MAR President Peter Ruffini, regional vice president at Jack Conway & Co. "However, price increases have helped put equity back into homes, leaving more homeowners in a position to sell and that should help increase inventory and confidence in the market going forward."
In December 2013, the REALTOR® Market Confidence Index was 52.63, which was down eight percent from the December 2012 score of 57.47. This is the second straight month that the RMCI has gone down. On a month-to-month basis, the December RMCI was down seven percent from the 56.8 score in November 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 75.39 in December, up four percent from the December 2012 RPCI of 72.71. This is the 23rd straight month of year-over-year increases and the 10th straight month over the 70-point mark. On a month-to-month basis, the RPCI was up seven percent from the November 2013 RPCI of 70.6.
The monthly “Hot Topic” question asked REALTOR®-members to provide the best word or phrase to describe the Massachusetts real estate market in 2013. According to REALTORS® who responded to the survey the top three choices were:
“2013 was the year of ________”
1. No inventory (23 percent)
2. Sellers staying on the sideline (16 percent); and
3. Return of home equity (nine percent)
The remaining responses were spread across 10 additional choices including “other," which received 14% of the vote.
The average REALTOR® Market Confidence Index number for 2013 was 68.78, which was up 29 percent from the average 2012 RMCI of 53.48. The average REALTOR® Price Confidence Index was 74.67, which was up 21 percent from the 2012 RPCI of 61.95.
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.
Editors and reporters: Please note that the term Realtor is properly spelled with an initial capital “R”, per the Associated Press Stylebook.