As inventory continues to fall to historic lows, more than a third of Realtors® report that seller contingencies are being used more frequently or much more frequently in this market.
by Eric Berman - email@example.com - 781-839-5507
WALTHAM, Mass. – October 10, 2019 – The Massachusetts Association of Realtors® (MAR) reported today that the number of single-family homes put under agreement in the month of September went up 20 percent and the number of condominiums put under agreement went up almost 25 percent compared to this time last year. This marks 12 straight months of year-over-year increases for single-family homes. The median price for single-family homes put under agreement increased five percent to $410,000, while condominiums had a 10 percent increase to $375,000 compared to September 2018.
In response to the September ‘Hot Topic’ question, 36 percent of respondent's reported that seller contingencies are being used more frequently or much more frequently in this market.
September Pending Sales:
“Even with strong activity in the summer, buyers were out in force in September pushing the number of homes put under agreement up over 20 percent,” said 2019 MAR President Anne Meczywor, broker/associate at Roberts & Associates Realty, Inc., in Lenox. “The demand to live in Massachusetts combined with a strong job market and low interest rates continued to fuel the market for home ownership.”
September Realtor® Market and Price Confidence Indexes:
“We’ve seen the confidence of Realtors® remain in positive territory for months, but it’s good to see those Index numbers increase over the same time the year before,” said Meczywor.
Monthly ‘Hot Topic’ Question:
The ‘Hot Topic’ question for the month of September asked Realtors® if their clients have been using/agreeing to an influx of seller contingencies (i.e. home purchase contingency) as inventory continues to be historically low.
Of those who responded, five percent said that seller contingencies are being used much more frequently in this market and 31 percent said that they’re being used more frequently in this market. Almost 47 percent of respondents reported that seller contingencies are being used no more or less frequently in this market. The remaining 17 percent said that seller contingencies are either being used less frequently (15%) or much less frequently in this market (<2%).
“While the largest group of Realtors® report that there has been no change in the number of seller contingencies being used, it’s telling that almost a third feel they’re being used ‘more’ or ‘much more’ frequently,” said Meczywor. “With such low inventory, one of the main concerns among sellers is finding a home to move into after they sell theirs.”
The tracking of signed purchase and sales agreements (also called “pending sales”) provide reliable information about where the real estate market is heading in coming months.
A pending sale or a sale “under agreement” happens when the buyer and seller agree on the terms of the sale of a home and have a signed purchase and sale agreement but have yet to close and be recorded as such. MAR is the only organization, which compiles this statewide information from Multiple Listing Services each month.
Monthly pending (or under agreement) data and closed sales data comes from the three Realtor®-affiliated Multiple Listing Services in Massachusetts. They are the Berkshire County Multiple Listing Service, Cape Cod & Islands Association of Realtors® Multiple Listing Service, Inc.; and MLS Property Information Network, Inc. The data is compiled by 10K Research and Marketing, Inc. and updated each month. As a result, previous data may change after the reports have been run.
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.
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 25,000+ 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.