At or below-asking price offers are still majority made by buyers
WALTHAM, Mass. – May 21, 2013 – The Massachusetts Association of REALTORS® (MAR) reported today that both the REALTOR® Market Confidence Index (RMCI) and the REALTOR® Price Confidence Index (RPCI) have continued the trend of hitting all-time highs in April. While over-asking price offers are gaining momentum, REALTORS® report that the majority of buyers are making offers at or below-asking price.
“We’ve never seen this level of confidence in both the market and home prices since we’ve been tracking this data,” said 2013 MAR President Kimberly Allard-Moccia, broker-owner of Century21 Professionals in Braintree. “While median prices continue to tick up and reports from members indicate an increase in multi-bid offers in the marketplace, the REALTORS® who responded to the survey reported that at- or below-asking price offers are still what the majority of buyer clients are making.”
In April 2013, the REALTOR® Market Confidence Index was 79.14, which was up 41 percent from the April 2012 score of 56.31. This is the fourth straight all-time high for the RMCI and the 21st straight month of year-over-year increases. On a month-to-month basis, the April RMCI was UP five percent from the 75.52 score in March 2013. 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 Confidence Index was 81.47 in April, another all-time high and the first time the Index has broken the 80-point mark. The Index was which was up 36 percent from the April 2012 RPCI of 59.86. This is the 15th straight month of year-over-year increases. On a month-to-month basis, the RPCI was UP 4% percent from the March 2013 RPCI of 78.74.
After being asked about the prevalence of multiple-bid offers in March, this month REALTOR®-members were asked about how prevalent over-asking price offers were in 2013 (through April) because of the lack of inventory. Of those REALTORS® who responded to the survey, 25 percent answered all of my transactions (6%) or more than half of the offers have been over asking price (19%). Twenty-five percent answered that an equal number of the offers were over-asking price as were at- or below-asking price. While 51 percent answered more than half of the offers have been at- or below-asking price (24%) or all of the offers were at or below asking price (27%).
About the REALTOR® Index Methodology:
The Massachusetts REALTOR® Market Confidence Index (RMCI) and Price Confidence Index (RPCI) 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 RMCI 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 Confidence 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.
*Please note, starting with the release of the September 2012 Index data, the REALTOR® Market Index will be renamed the REALTOR® Market Confidence Index and the REALTOR® Price Index will be renamed the REALTOR® Price Confidence Index.
Editors and reporters: Please note that the term Realtor is properly spelled with an initial capital “R”, per the Associated Press Stylebook.