Less than full-priced appraisals impacting sales
WALTHAM, Mass. – August 16, 2011 – The Massachusetts Association of REALTORS® (MAR) today announced that REALTOR® members are feeling less positive about the Massachusetts real estate market in July compared to the same time last year. The July REALTOR® Price Index (RPI) was down from July 2010, but up from this past June. Over half of the REALTORS® who responded to the survey felt that less than full-priced appraisals impacted sales.
“Concerns about the debt ceiling and potential consequences to the economy had an impact on how REALTORS® felt about the real estate market in July,” said 2011 MAR President Laurie Cadigan, broker/owner of Barrett & Company in Concord. “While REALTORS® were more positive about prices this past month compared to June, low appraisals are a challenge and continue to impact sales.”
In July 2011, the REALTOR® Market Index was 26.89, which was down 4.49 percent from the July 2010 score of 28.15. On a month-to-month basis, the July RMI was down 7.82 percent from the 29.17 score in June 2011. 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.
In July 2011, the REALTOR® Price Index was 40.19, which was down 15.3 percent from the July 2010 RPI of 47.43. On a month-to-month basis, the RPI was up 4.9 percent from the June 2011 RPI of 38.30.
When REALTOR® members were asked if sales in their offices had been impacted by less than full-price appraisals in 2011, the response was split down the middle (51 percent yes vs. 49 percent no). Of those who answered yes, 44 percent reported less than full-price appraisals impacted 3-4 sales; 31 percent reported 1-2 sales; 18 percent reported 5-10 sales; and 9 percent reported 10 or more sales.
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.