WALTHAM, Mass. – August 20, 2013 – The Massachusetts Association of REALTORS® (MAR) reported today that the July REALTOR® Market Confidence Index (RMCI) and the July REALTOR® Price Confidence Index (RPCI) were both up compared to the same month in 2012. The results of the July “Hot Topic” question show, that despite the lack of homes to buy and increasing prices, first-time homebuyer activity is increasing
“July marks the 24th straight month that REALTOR® members who responded to our monthly survey felt strongly about the strength of the market and prices compared to the year before,” said 2013 MAR President Kimberly Allard-Moccia, broker-owner of Century21 Professionals in Braintree. “This confidence comes directly from the attitudes of their buyer and seller clients and it is continuing to trend upward.”
In July 2013, the REALTOR® Market Confidence Index was 71.09, which was up 23 percent from the July 2012 score of 57.63. This is the 24th straight month of year-over-year increases and sixth straight month the RMCI has been over the 70-point mark. On a month-to-month basis, the July RMCI was down seven percent from the 76.4 score in June 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 72.27 in July, up 11 percent from the July 2012 RPCI of 65.00. This is the 18th straight month of year-over-year increases and the fifth straight month over the 70-point mark. On a month-to-month basis, the RPCI was down four percent from the June 2013 RPCI of 75.00.
“First-time homebuyers who have been waiting to enter the market are making the decision that ‘now’ is the time,” said Allard-Moccia.
The monthly “Hot Topic” question asked REALTOR®-members how the lack of homes for sale and increasing prices has impacted first-time homebuyer activity. Forty-three percent of respondents reported that they saw either a significant increase (5.5%) or an increase (37.5%) in first-time homebuyer activity. Thirty-four percent reported no change in first-time homebuyer activity, while 23 percent reported seeing a decrease (21%) or a significant decrease (2%) in first-time homebuyer activity.
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.