Massachusetts Association of REALTORS Introduces Monthly REALTOR Market Index to Provide ‘On the Street’ Perspective

January 2010 Index up 99 percent compared to the same time last year

WALTHAM, MA – February 16, 2010 – (RealEstateRama) — The Massachusetts Association of REALTORS® (MAR) today announced that members reported solid improvement in market conditions over January 2009 according to results of its new Massachusetts REALTOR® Market Index (RMI).  The monthly Massachusetts RMI quantifies the opinions of members who are working with buyers and sellers each day in the Massachusetts real estate market.

“While we believe that the sales data we issue each month provides the most accurate picture of the state’s housing market, we think that consumers also would like to know the current market perceptions of our REALTOR® members,” said 2010 MAR President Kevin Sears, broker/co-owner of Sears Real Estate in Springfield.  “Our monthly REALTOR® Market Index will complement the hard sales data by tapping into a sample of our 20,000 members across the state to track changes and trends in the market before they become apparent in the monthly sales numbers.”

In addition to surveying a random sample of MAR members about home sales activity, the monthly survey tracks the membership’s expectations on home prices.  Along with those two standard monthly questions, the survey also includes a “wildcard question” that changes each month and queries the membership on an industry “hot topic.”

“The hard sales data that MAR releases each month reflects the completion of transactions that often take several months to complete. The REALTOR® Market Index reflects more current information on the feel of the market based on the members’ view regarding latest foot traffic, customer inquiries, and new listings that come on the market,” said Sears.

In January 2010, the REALTOR® Market Index was 34.30, which was 98.81 percent higher than the 17.25 score recorded in January 2009.  On a month-to-month basis, the January 2010 RMI was up less than one percent from the December 2009 score of 34.15.  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.

“Looking back a year, January 2009 was another challenging month for the real estate market and the economy as a whole and that is reflected in its low index score,” said Sears.  “To be up 99 percent in January 2010 compared to this time last year is very positive and with the tax credit, that score should continue to trend upward.   Of course, low interest rates and moderate pricing point to a continued buyer’s market.”

The REALTOR® Price Index was up 46.64 percent in January 2010 compared to the same time last year (33.80 in 2009 to 49.57 in 2009).  On a month-to-month basis the January index number was down 3.56 percent from the REALTOR® Price Index number in December 2009 (51.40).

In January, when asked if the market momentum created by the tax credit would continue past the April 30 deadline, 33 percent responded that the market “will stay the same” (24%) or “will somewhat improve” (9%).

Fifty-three percent responded that the market “will somewhat decline,” with the remaining 15 percent responding the market “will significantly decline after the deadline.”  None of the respondents selected the market “will significantly improve.”

REALTOR® Market Index Methodology:
The Massachusetts REALTOR® Market Index (RMI) is 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.