Massachusetts Home Buyers Did Not Slow Down as Pending Homes Sales Up Significantly in August

by Eric Berman - eberman@marealtor.com - 781-839-5507 | Sep 09, 2015

Very strong buyer activity pushed REALTOR® Market Confidence Index higher

WALTHAM, Mass. September 9, 2015 – The Massachusetts Association of REALTORS® (MAR) reported today that very strong buyer activity in August pushed pending home sales up over 40 percent from the same month last year. REALTORS® showed growing confidence in the market again in August as the REALTOR® Market Confidence Index was up over 20 percent from August 2014. This month’s “Hot Topic” question finds that “boomerang buyers” are not as active in Massachusetts.

August Pending Sales:

Single-Family

August 2015

August 2014

%Change

Sales

5,886

4,157

41.6%

Median Price

$368,000

$350,000

5.1%

  • Pending sales have been up 29 of the last 30 months

Condominium

August 2015

August 2014

%Change

Sales

2,042

1,578

29.4%

Median Price

$338,500

$325,000

4.2%

  • Pending sales have been up 29 of the last 30 months
“There was no slowdown this summer as buyers continued to be out there making offers that sellers were happy to accept,” said 2015 MAR President Corinne Fitzgerald, broker/owner of FITZGERALD Real Estate in Greenfield. “Buyer activity should remain strong with the only variable being the recent volatility in the stock market.”

REALTOR® Market and Price Confidence Indexes:

Confidence Index

August 2015

August 2014

%Change

Market

74.16

61.15

21%

Price

68.61

70.00

-2%

                                                    
  • The RMCI was up for the fifth straight month
  • The RPCI has been down two of the last five months
  • 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   

“It’s hard not to feel confident with the amount of buyer activity we’ve had this summer. We’ll have a good indication of the impact the stock market correction had in next month’s REALTOR® Market Confidence Index,” said Fitzgerald.

Monthly ‘Hot Topic’ Question:
The August “Hot Topic” question asked REALTORS® how prevalent have “boomerang buyers” (owners who lost their home to foreclosure or sold via short sale and have re-built their credit and are back in the market) been in their transactions over the past six months?

Of those REALTORS® who responded, nearly three quarters (74%) responded that “boomerang buyers” have not been involved in any of their transactions over the past six months. Eighteen percent reported that “boomerang buyers” have been in one or two transactions they’ve been involved with. Six percent reported that these buyers have been in some of their transactions and two percent reported that “boomerang buyers” have been in a lot of transactions.  

“Massachusetts didn’t get as hard hit with distressed sales (foreclosures and short sales) as other parts of the country did during the downturn. As a result, I think we’re seeing a lower percentage of ‘boomerang buyers’ compared to those areas,” said Fitzgerald.

About the Data Sets:

The tracking of signed purchase and sales agreements (also called “pending sales”) provide reliable information about where the real estate market is heading in coming months. 

A pending sale or a sale “under agreement” happens when the buyer and seller agree on the terms of the sale of a home and have a signed purchase and sale agreement, but have yet to close and be recorded as such.  MAR is the only organization, which compiles this statewide information from Multiple Listing Services each month.

Monthly pending (or under agreement) data and closed sales data comes from the three REALTOR®-affiliated Multiple Listing Services in Massachusetts. They are the Berkshire County Multiple Listing Service, Cape Cod & Islands Association of REALTORS® Multiple Listing Service, Inc.; and MLS Property Information Network, Inc. The data is compiled by 10K Research and Marketing, Inc. and updated each month. As a result, previous data may change after the reports have been run.

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 21,000+ 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.