Price Index again over the 60-point mark
WALTHAM, Mass. – July 18, 2012 – The Massachusetts Association of REALTORS® (MAR) today announced that both the REALTOR® Market Index (RMI) and the REALTOR® Price Index (RPI) continue to be up compared to the year before. While short sales and foreclosures continue to have a larger-than-normal presence in the market, the majority of REALTORS® who work with these types of sales reported no change in this part of their business compared to last year.
“Increased buying and selling activity this spring continued to keep confidence up in June and it should carry on through the summer,” said 2012 MAR President Trisha McCarthy, broker at Keller Williams Realty in Newburyport. “Recent news that the market has ‘hit bottom’ should also help keep the market moving in a positive direction.”
In June 2012, the REALTOR® Market Index was 59.30, which was up 103 percent from the June 2011 score of 29.17. This is the second highest point the Index has reached since the association has been tracking the data and 11th straight month of year-over-year increases. On a month-to-month basis, the June RMI was down 1.8 percent from the 60.38 score in May 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 60.06 in June, which was up 57 percent from the June 2011 RPI of 38.30. This is the second 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 in two consecutive months. On a month-to-month basis, the RPI was down 3.7 percent from the May 2012 RPI of 62.38.
In June 2012, REALTOR® members were asked whether short sales and foreclosures were currently part of their business. Of those who answered yes, 17 percent responded that compared to a year ago the amount of their short sale business was either somewhat less (14%) or significantly less (3%). Forty-eight percent of respondents reported no change from last year, while 35 percent responded that their business was somewhat greater (32%) or significantly greater (3%) compared to last year.
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.