WALTHAM, Mass. – July 16, 2013 – The Massachusetts Association of REALTORS® (MAR) reported today that the June REALTOR® Market Confidence Index (RMCI) and the June REALTOR® Price Confidence Index (RPCI) were both up again compared to the same month in 2012. The results of the June “Hot Topic” question found that REALTORS® who regularly work with international clients reported that most deals in the past year were financed and not “all cash”.
“Despite the combination of the traditionally slower summer market and interest rates ticking up, REALTOR® members who answered the survey still felt confident about the market this past June,” said 2013 MAR President Kimberly Allard-Moccia, broker-owner of Century21 Professionals in Braintree.”
In June 2013, the REALTOR® Market Confidence Index was 76.4, which was up 29 percent from the June 2012 score of 59.3. This is the 22nd straight month of year-over-year increases and fifth straight month the RMCI has been over the 70-point mark. On a month-to-month basis, the June RMCI was down eight percent from the 83.08 score in May 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 75 in June, up 25 percent from the June 2012 RPCI of 60.06. This is the 17th straight month of year-over-year increases and the fourth straight month over the 70-point mark. On a month-to-month basis, the RPCI was down nine percent from the May 2013 RPCI of 81.95.
“While REALTORS® who regularly work with international clients are seeing ‘all cash’ deals, they are also reporting that most of the deals are being financed,” said Allard-Moccia.
The monthly “Hot Topic” question asked REALTOR®-members if they regularly work with international buyers and sellers (primary residence not in the United States). While only a small percent responded “yes”, those who did were asked how many of the transactions they were involved in over the past year were “all cash”. Of those who answered, 18.5 percent selected either all of the transactions (3.7%) or more than half of the transactions (14.8%) were “all cash”. Only 3.7 percent of the respondents selected they were evenly split with another 18.5 percent saying less than half of the deals were “all-cash”. The biggest group (59.3%) responded that none of the deals in the past year with international clients were “all cash”.
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.