Price Index now down for third month in a row
WALTHAM, MA – October 12, 2010 – (RealEstateRama) — The Massachusetts Association of REALTORS® (MAR) today announced that the September REALTOR® Market Index (RMI) was down for the fourth straight month compared to the same time last year. While the September REALTOR® Price Index was also down again for the third straight month, it was up compared to this past August.“Uncertainty continues to be the theme echoed by REALTOR® members who responded to the September housing survey,” said 2010 MAR President Kevin Sears, broker/co-owner of Sears Real Estate in Springfield. “While their expectations on prices are down from last year, when activity amidst the first-time homebuyer tax credit was gaining critical mass, the RPI is up from August, most likely due to dropping interest rates.”
In September 2010, the REALTOR® Market Index was 19.39, which was 51.42 percent lower than the 39.91 score recorded in September 2009. On a month-to-month basis, the September 2010 RMI was down 3.06 percent from the August 2010 score of 20. 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 Index was down 12.69 percent in September 2010 compared to the same time last year (48.89 in 2009 to 42.69 in 2010). On a month-to-month basis the September index number was up 2.15 percent from the Home Sales Price Index number in August 2010 of 41.79.
When REALTOR® members were asked how the number of agents in their office had changed from the same time last year, 23 percent responded that the number of agents in their office had either significantly increased (7 percent) or somewhat increased (16 percent). Thirty-three percent responded that the number of agents had either somewhat decreased (26 percent) or significantly decreased (7 percent), while 45 percent of the respondents reported that the office size had stayed about the same.
About the REALTOR® Index Methodology:
The Massachusetts REALTOR® Market Index (RMI) and Price Index (RPI) 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 RMI 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 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 20,000 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.