This is the 14th straight month that the REALTOR® Market Confidence Index has gone up
WALTHAM, Mass. – October 17, 2012 – The Massachusetts Association of REALTORS® (MAR) today announced that the *REALTOR® Market Confidence Index (RMCI) has gone up for the 14th straight month compared to the year before and had the largest year-over-year percent increase since the data has been collected. The *REALTOR® Price Confidence Index (RPCI) continues to be near all-time highs and has been over the 60-point mark for the fifth straight month. A large percentage of REALTORS® surveyed are reporting homeowners are keeping their homes off the market because they are holding out for higher prices.
“We’ve come a long way in terms of confidence in the market since last year when our REALTOR® Market Confidence Index was at its 2011 low,” said 2012 MAR President Trisha McCarthy, broker at Keller Williams Realty in Newburyport. “We need to continue to encourage those folks, who may be reluctant, to put their homes on the market. Having a good supply of homes in all price ranges is very important for a real estate recovery.”
In September 2012, the REALTOR® Market Confidence Index was 57.73, which was up 166 percent from the September 2011 score of 21.63. This is the largest year-over-year monthly increase since the data has been collected. This is also 14th straight month of year-over-year increases and the sixth straight month over the 50-point mark. On a month-to-month basis, the September RMCI was up 2.33 percent from the 56.41 score in August 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 64.41 in September, which was up 72 percent from the September 2011 RPCI of 37.38. This is the eighth straight month of year-over-year increases and the fifth straight month the RPI has been over the 60-point mark. On a month-to-month basis, the RPCI was up less than a half of one percent from the August 2012 RPCI of 64.19.
With the number of homes for sale trending down, REALTOR® members were asked “why homeowners who were thinking of selling were still keeping their homes off the market?” These were the responses:
Homeowners holding off for higher prices -- 41.8%
Concerns about the economy -- 20%
Can’t sell because home is “underwater” -- 13.6%
Lack of homes to buy after they sell -- 8.2%
Waiting until after the presidential election -- 5.5%
Sellers don’t believe inventory is actually low -- 3.6%
Other -- 7.3%
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.