WALTHAM, Mass. – October 16, 2013 – The Massachusetts Association of REALTORS® (MAR) reported today that the September REALTOR® Market Confidence Index (RMCI) and the September REALTOR® Price Confidence Index (RPCI) were both up again compared to the same month in 2012. The results of the September “Hot Topic” question show that buyer and seller clients have various levels of concern about changes to the National Flood Insurance Program that started on October 1, 2013.
“On a year-over-year basis, we continue to see good gains in positive sentiment in terms of both sales and prices,” said 2013 MAR President Kimberly Allard-Moccia, broker-owner of Century21 Professionals in Braintree. “However, confidence dipped in part from higher levels in August due to concerns about flood insurance, the threat of the government shutdown and continued talk of the debt ceiling.”
In September 2013, the REALTOR® Market Confidence Index was 62.91, which was up nine percent from the September 2012 score of 57.73. This is the 26th straight month of year-over-year increases and the ninth straight month over the 60-point mark. On a month-to-month basis, the September RMCI was down 10 percent from the 69.26 score in August 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 70.27 in September, up nine percent from the September 2012 RPCI of 64.41. This is the 20th straight month of year-over-year increases and the seventh straight month over the 70-point mark. On a month-to-month basis, the RPCI was down five percent from the August 2013 RPCI of 73.57.
The monthly “Hot Topic” question asked REALTOR®-members to rank how concerned their buyer and seller clients were about the changes to the National Flood Insurance Program that began on October 1, 2013. Respondents ranked the concern on a scale of 1-4 with 1 equaling “not concerned” and 4 equaling “very concerned”. Eighteen percent of respondents rated their buyer and seller clients as “not concerned”, while 31 percent rated their buyer and seller clients as “very concerned”. Thirty-one percent rated the concern a “2”, while 21 percent rated the concern of their buyer and seller clients as a “3”. The average score of all respondents was a 2.64.
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.
Editors and reporters: Please note that the term Realtor is properly spelled with an initial capital “R”, per the Associated Press Stylebook.