Both indexes continue to trend down on a year-over-year basis
WALTHAM, Mass. – February 15, 2011 – The Massachusetts Association of REALTORS® (MAR) today announced that the January REALTOR® Market Index (RMI) was up from December, for its second straight month-to-month gain. The REALTOR® Price Index (RPI) was down from December for its first month-to-month drop since September 2010. Both indexes were down from the same time last year.
“Snow continues to be the theme as everyone has had enough, but despite those conditions, REALTORS® who responded to the survey feel better about the market than they did the month before,” said 2011 MAR President Laurie Cadigan, broker/owner of Barrett & Company in Concord. “As we saw with closed sales in December, respondents feel prices are coming down, which will benefit the market and make homes more affordable.”
In January 2011, the REALTOR® Market Index was 21.11, which was up 8 percent from the December 2010 score of 19.54. This is the second straight month-to-month increase. On an annual basis, the January RMI was down 38 percent from the 34.3 score in January 2010. This is the eighth straight month that the year-over-year RMI has gone down. 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 Index was down 5.86 percent in January 2011 compared to the same time last year (49.57 in 2010 to 46.67 in 2011). This is the seventh straight month that the RPI has gone down. On a month-to-month basis the January index number was down 2.17 percent from the Home Sales Price Index number in December 2010 of 47.70. This is the first drop after four straight month-to-month gains.
When REALTOR® members were asked what impact the multiple major snow storms in January would have on their business over the next few months, 55 percent responded that the impact would be negative (40%) or significantly negative (15%). Thirty-eight percent thought the impact would be neutral, while 8 percent thought the impact would be positive (4%) or significantly positive (4%).
About the REALTOR® Index Methodology:
The Massachusetts REALTOR® Market Index (RMI) and Price Index (RPI) 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 RMI 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 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.