April 2010 REALTOR Market Index On Positive Side of Scale for First Time

REALTOR® members feel optimistic about home prices for third straight month

WALTHAM, MA – May 11, 2010 – (RealEstateRama) — The Massachusetts Association of REALTORS® (MAR) today announced that for the first time since MAR started collecting survey data in January 2008, the REALTOR® Market Index is on the positive side of the 100-point scale for April.  For the third straight month REALTORS® are optimistic on price as the REALTOR® Price Index also continues to be in positive territory.

“With nine straight months of annual sales increases, REALTORS® have reason to be optimistic and it shows with the latest results of REALTOR® Market Index,” said 2010 MAR President Kevin Sears, broker/co-owner of Sears Real Estate in Springfield.  “Even with the homebuyer tax credit expiring at the end of April, members feel prices will continue to move up.”

In April 2010, the REALTOR® Market Index was 51.76, which was 86% percent higher than the 27.82 score recorded in April 2009.  On a month-to-month basis, the April 2010 RMI was up 29.41 percent from the March 2010 score of 40.00.  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 up 37.55 percent in April 2010 compared to the same time last year (40.41 in 2009 to 55.59 in 2010).  On a month-to-month basis the April index number was up 4.59 percent from the Home Sales Price Index number in March 2010 (53.15).

When REALTOR® members were asked if they were aware of the new federal program titled the Home Affordable Foreclosure Alternative*, 72 percent responded that they were.  Of those REALTORS® who responded that they were aware of the program, 34 percent thought the program would be either successful or very successful, 46 percent thought there would be no change.  Nineteen percent of those responding thought the program would be either unsuccessful, very unsuccessful or were unaware of the program.
*The Home Affordable Foreclosure Alternative (HAFA) is a federal program that provides incentives to loan servicers in connection with a short sale or a deed-in-lieu of foreclosure (DIL) used to avoid foreclosure on a loan eligible for modification under the Home Affordable Modification Program.  For more information: https://www.hmpadmin.com/portal/programs/foreclosure_alternatives.html

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.