This is the first time that both indexes were up in the same
month since April 2010
WALTHAM, Mass. – November 16, 2011 – The Massachusetts Association of REALTORS® (MAR) today announced that for the third straight month, REALTOR® members were more confident about the market in October 2011 compared to the same time last year according to the most recent REALTOR® Market Index. The October REALTOR® Price Index (RPI) was also up from October 2010. This is the first time that both indexes have been up in the same month since April 2010. When asked, a large percentage of members reported an increase in the activity of their under-30 buyer clients because of historically-low interest rates and more affordable home prices.
“To see both indexes up in the same month is really good news in terms of how our REALTOR® members, who are on the ground every day helping clients buy and sell properties, feel about the market,” said 2011 MAR President Laurie Cadigan, broker-owner of Barrett & Company in Concord. “With interest rates as low as they are and home prices still affordable, it is positive for the market that under-30 buyers are taking advantage of the opportunity.”
In October 2011, the REALTOR® Market Index was 25.88, which was up 24.71 percent from the October 2010 score of 20.75. This is the third straight month of year-over-year increases since March-May 2010. On a month-to-month basis, the October RMI was up 19.61 percent from the 21.63 score in September 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.
The REALTOR® Price Index was 43.75 in October, which was up 1.67 percent from the October 2010 RPI of 43.03. On a month-to-month basis, the RPI was up 17.04 percent from the September 2011 RPI of 37.38.
REALTOR® members were asked in October about how their under-30 buyer clients have reacted to the historically-low interest rates and more affordable home prices. Thirty-three percent of respondents reported either a significant increase (3%) or increase (30%) in the buying activity of their under-30 buyers because of low-interest rates and more affordable home prices. Fifty-two percent of respondents reported no change in the buying activity of that demographic, while 14 percent have seen either a decrease (11%) or a significant decrease (3%) in buying activity by their under-30 clients.
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.