Majority of Realtors® experienced no difficulty with new closing procedures a year since the rule took effect
WALTHAM, Mass. – November 16, 2016 – (RealEstateRama) — The Massachusetts Association of Realtors® (MAR) reported today that the number of homes put under agreement in October were up 15 percent from last year. Condominium pending sales were also up almost nine percent as prices for both property types continue to go up. The strong market was reflected in high Realtor® Market Confidence Index, while the Price Confidence Index remained essentially the same over last year.
October Pending Sales:
|Single Family||October 2016||October 2015||% Change|
- Pending sales have been up 43 of last 44 months
|Condominium||October 2016||October 2015||% Change|
- Pending sales have been up for 13 of last 14 months
“Buyers in October kept up the momentum we’ve seen from the summer into the fall,” said 2016 MAR President Annie Blatz, branch executive at Kinlin Grover Real Estate on Cape Cod. “Despite low inventory, buyers are staying actively engaged in the market and pushing both pending sales and prices up.”
Realtor® Market and Price Confidence Indexes:
|Confidence Index||October 2016||October 2015||% Change|
- The Realtor® Market Confidence Index was up for the 20th straight month
- 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® Market Confidence Index remained over 70 points in October, as it has since the winter,” said Blatz. “This is a sign Realtors® are feeling positive about the market, even as we head into the colder weather and traditionally slower market.”
Monthly ‘Hot Topic’ Question:
The October “Hot Topic” question asked Realtors® how has the new closing procedures (also known as TRID “Truth-in-lending RESPA Integrated Disclosure closing procedures”) gone since the new regulations went live on Oct. 3, 2015? This question was meant to check in on Realtors® a year after the long-time closing process was changed.
Of those who responded, 32 percent said there has been no difference from the previous closing procedures. Another 31 percent said that closings have been somewhat smoother than anticipated. On the other end, almost a quarter of those who responded reported difficulty with the new TRID, with nearly 22 percent saying closings have been somewhat more difficult and three percent reporting significant difficulty.
“It is heartening to see that the majority of Realtors® are reporting little to no difficulty with the new closing procedures a year out,” said Blatz. “We know not all closings have been smooth, but we continue to get there as this is the ‘new normal’.”
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 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.
by Eric Berman – eberman (at) marealtor (dot) com – 781-839-5507