Overall confidence in the market continues to be up
WALTHAM, Mass. – November 20, 2012 – The Massachusetts Association of REALTORS® (MAR) today announced that for the fifth time in eight months the *REALTOR® Price Confidence Index (RPCI) hit an all-time high in October. Confidence in the overall real estate market also continued to be positive as the *REALTOR® Market Confidence Index (RMCI) rose for the 15th straight month. Because Massachusetts was generally spared the destruction suffered elsewhere by Hurricane Sandy, the majority of REALTOR®-members asked felt that people in the middle of the buying and selling process were not impacted by the storm.
“With the peak of the election season and the tragedy of Hurricane Sandy all taking place in October, confidence in the real estate market still stayed strong this month,” said 2012 MAR President Trisha McCarthy, broker at Keller Williams Realty in Newburyport. “It is essential that the real estate market keep moving in a positive direction to help lead the economy to a full recovery. Buyers and sellers who remain engaged in the process are the key to making that happen.”
In October 2012, the REALTOR® Market Confidence Index was 58.38, which was up 125 percent from the October 2011 score of 25.88. This is also 15th straight month of year-over-year increases and the seventh straight month over the 50-point mark. On a month-to-month basis, the October RMCI was up 1.13 percent from the 57.73 score in September 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 68.68 in October, which was an all-time high. The previous high was 65.00 from this past July. The October index was up 57 percent from the October 2011 RPCI of 43.75. This is the ninth straight month of year-over-year increases and the sixth straight month the RPCI has been over the 60-point mark. On a month-to-month basis, the RPCI was up 7 percent from the September 2012 RPCI of 64.41.
REALTOR®-members were asked if they felt the aftermath of Hurricane Sandy would impact the real estate market in terms of closings, appraisals, offers and other elements of the sales transaction process. The majority of respondents (52.2%) felt there was no impact, while 22 percent felt the impact would be somewhat negative. Only 2.7 percent felt there would be a significant negative impact, while 23 percent felt it was too early to tell.
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.