WALTHAM, Mass. – March 15, 2011 – The Massachusetts Association of REALTORS® (MAR) today announced that the February REALTOR® Market Index (RMI) was up over 32 percent from January. This is the largest month-to-month gain in the three years the data has been collected. The REALTOR® Price Index (RPI) was up less than one percent from January. Both indexes continue to be down from the same time last year.
“While we’ve all been reading about small improvements in the economy and the unemployment rate; it is encouraging to hear that REALTORS®, who deal directly with home buyers and sellers on a daily basis, are experiencing it on the street,” said 2011 MAR President Laurie Cadigan, broker/owner of Barrett & Company in Concord. “The market continues to be fragile; but current conditions exist to produce a solid spring season.”
In February 2011, the REALTOR® Market Index was 28.06, which was up 32 percent from the January 2011 score of 21.11. This is the third straight month-to-month increase. On an annual basis, the February RMI was down 32 percent from the 41.67 score in February 2010. While this is the ninth straight month that the year-over-year RMI has gone down, it is the smallest decrease since the RMI was down nearly 26 percent in July of last year. 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 February REALTOR® Price Index was 46.96, which was up less than one percent from the RPI of 46.67 in January 2011. On an annual basis, the RPI was down 11 percent from the February 2011 RPI of 52.78. This is the eighth straight monthly year-over-year decrease.
When REALTOR® members were asked about their clients’ ability to secure financing in the current lending environment compared to last year, 61 percent responded that it was significantly more difficult (18%) or somewhat more difficult (43%). Thirty-three percent thought it has remained the same, while 6 percent thought it was somewhat easier to secure financing today compared to last year.
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.