Amount of time it takes to complete a short sale
continues to be lengthy
WALTHAM, Mass. – September 13, 2011 – The Massachusetts Association of REALTORS® (MAR) today announced that REALTOR® members were more confident about the market in August 2011 compared to the same time last year according to the most recent REALTOR® Market Index. They also saw improvement over this past July. The August REALTOR® Price Index (RPI) was down from both August 2010 and the previous month. When asked about short sales, over 30 percent of the respondents who completed a short sale in the past 12 months reported that it takes on average more than six months or more to close the transaction.
“Based on the results of the survey and hearing from REALTOR® members in the field, the further we got away from talk about the debt ceiling the better everyone felt about the market in August,” said 2011 MAR President-Elect Trisha McCarthy, broker with Keller Williams Realty in Newburyport. “REALTORS® still believe that short sales are taking too long and the length of time to complete the transaction is hurting the market.”
In August 2011, the REALTOR® Market Index was 28.57, which was up 40.3 percent from the August 2010 score of 20.36. This is only the second monthly year-over-year increase since May 2010. On a month-to-month basis, the August RMI was up 6.27 percent from the 26.89 score in July 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 August 2011, the REALTOR® Price Index was 39.92, which was down 4.48 percent from the August 2010 RPI of 41.79. This is the third straight month of year-over-year decreases. On a month-to-month basis, the RPI was down less than one percent
(-0.67 percent) from the July 2011 RPI of 40.19.
REALTOR® members were asked in August how many of their transactions in the past 12 months had been short sales. Of those who answered yes, 33 percent reported having completed 1-2 short sales; 10 percent reported 3-4 short sales; 8 percent reported 5-10 short sales; and 4 percent reported 10 or more short sales. Nearly half (46 percent) responded that they did not have short sales in the past 12 months.
For those REALTORS® who completed a short sale, 22 percent reported it took an average of 1-3 months to close on the home; 46 percent reported it took 4-6 months to close; 25 percent reported 6-12 months to close; and 7 percent reported it took over 12 months on average to close a short sale.
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.