Mass. July Pending Home Sales Down for the First Time in Over...

Mass. July Pending Home Sales Down for the First Time in Over Two Years

Realtors® are reporting that their buyer and seller clients are getting frustrated by the lack of inventory of homes on the market.

WALTHAM, Mass. – August 10, 2017 – (RealEstateRama) — The Massachusetts Association of Realtors® (MAR) reported today that single-family pending home sales fell almost six percent in July from last year. Pending condominium sales were also down more than 10 percent. The median price for both single-family homes and condos saw a hike over last year, with the single-family median price rising over the $400,000 mark for the second month in the row. Realtors® confidence in the market and in home prices were both up in July after a dip in June. This month’s “Hot Topic” question asks Realtors® to describe their clients’ attitudes to both buying and selling in this inventory-starved market.

July Pending Sales: 

Single Family July 2017 July2016 % Change
Sales 4,616 4,902 -5.8%
Median Price $405,000 $380,000 6.6%

• Pending sales down for the first time since January 2015

Condominium July2017 July2016 % Change
Sales 1,632 1,824 -10.5%
Median Price $382,000 $358,950 6.4%

• Pending sales down for the third time in 12 months

“More than two years of gains in pending sales despite rising prices and low inventory faltered this month,” said 2017 MAR President Paul Yorkis, president of Patriot Real Estate in Medway. “Some buyers are especially feeling the pressure now with pending median prices over $400,000 for the second month in a row.”

Realtor® Market and Price Confidence Indexes: 

Confidence Index July2017 July2016 %Change
Market 80.66 79.02 2.07%
Price 73.60 72.57 1.42%

• The Realtor® Market Confidence Index UP for the 26th time in 27 months
• The Realtor® Price Confidence Index Up for the sixth time in seven 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

“While Realtors® might be concerned about the market because of a lack of inventory, they still have enough confidence in it to push both the Market and Price Indexes up in July,” said Yorkis.

Monthly ‘Hot Topic’ Question:  

The July “Hot Topic” question asked Realtors® to look at their buyer and seller clients separately when it comes to their attitudes with the home buying and selling process and the impact the lack of inventory is having on them.

Realtors® were asked to describe their buyers’ current attitude to the home buying process. Of those who responded, 44 percent were somewhat frustrated by the shortage of inventory, but still hopeful and aggressively in the market. Forty-six percent said their clients were increasingly frustrated by the shortage of inventory and were weighing other options, but still in the market. Eight percent reported their buyers were very frustrated by the shortage of inventory and are taking a break from house-hunting right now. Only two percent reported that their clients were not frustrated by the lack of homes for sale.

Realtors® were also asked to describe their sellers’ current attitude to the home selling process. Of those who responded, 46 percent were very concerned about finding a home (after selling theirs) when it’s time to buy. Thirty-nine percent of Realtors® reported that their clients were somewhat concerned about finding a home when it was time to buy after selling theirs. Over 10 percent of Realtors® reported their clients were not worried about finding a home after selling and nearly five percent reported that their clients were taking their homes off the market because they don’t feel they’ll be able to find a home when it’s time.

“The lack of inventory is significantly weighing on the minds of both buyers and sellers,” said Yorkis. “While it might be easy for a homeowner to sell their home, the prospect of them not being able to find a home to buy is a big hurdle. It’s just one more reason why more homes are not on the market.”

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 10K Research and Marketing, Inc. and updated each month. As a result, the 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 than 24,000 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.

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

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