Another Record Month for Massachusetts Pending Home Sales in May

Another Record Month for Massachusetts Pending Home Sales in May

Majority of Realtors® report no year-over-year change in clients’ ability to secure financing

WALTHAM, Mass. – June 16, 2016 – (RealEstateRama) — The Massachusetts Association of Realtors® (MAR) reported today that the state saw the highest level of pending home sales in the month of May since 2004, with homes under agreement increasing 18.4 percent over last year. Prices also rose incrementally over last year. The strong market was reflected in a high Realtor® Market Confidence Index.

May Pending Sales:

Single Family May 2016 May 2015 % Change
Sales 7,406 6,254 18.4%
Median Price $353,000 $340,000 3.8%
  • Pending sales have been up 38 of last 39 months
  • Most pending sales in the month of May since 2004
Condominium May 2016 May 2015 % Change
Sales 2,698 2,410 12.0%
Median Price $340,000 $330,000 3.0%
  • Pending sales have been up 38 of the last 39 months

“May is typically a high-activity month, and this year topped even the record pending sales we had this time last year,” said 2016 MAR President Annie Blatz, branch executive at Kinlin Grover Real Estate on Cape Cod. “It’s heartening to see, especially with the continuing problem of low inventory, that people want to live and work in Massachusetts and they’re able to find suitable homes.”

REALTOR® Market and Price Confidence Indexes:

Confidence Index May 2016 May 2015 % Change
Market 81.25 79.48 2.2%
Price 72.46 80.06 -9.5%
  • The Realtor® Market Confidence Index was up for the 15th straight month
  • The Realtor® Price Confidence Index was down for the sixth time in 12 months
  • 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 strong buyer activity being seen by Realtors® in the market has pushed the Realtor® Market Confidence Index up again in May,” said Blatz. “The Price Confidence Index has trended down as prices continue to hover near all-time highs.”

Monthly ‘Hot Topic’ Question:

The May “Hot Topic” question asked Realtors® how would they would describe their clients’ ability to secure financing in the current lending environment compared to the same time last year. Of those Realtors® who responded, 56 percent reported that their clients’ ability to secure financing remained the same as last year. Thirty-one percent of Realtors® who responded said their clients had somewhat more difficulty this year. Nine percent reported that securing financing has become somewhat easier for their clients, while a remaining two percent said it was significantly more difficult.
“Since the downturn in the market a number of years ago, access to financing has remained difficult for many qualified buyers. While most of the Realtors® who responded didn’t see the process become more difficult than a year ago, there was a significant number who did and that is concerning and something we’ll need to watch,” said Blatz.

About the Data Sets:

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 ShowingTime 10K 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.

  • How would you describe the current housing market?
  • 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

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.

  • How would you describe the current housing market?
  • 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 22,000+ 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.

by Eric Berman – eberman (at) marealtor (dot) com – 781-839-5507

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