Massachusetts Home Buying Remains Strong through ‘Back-to-School’ Season in Septembe

REALTOR® confidence strong as buyers stay active and prices rise

WALTHAM, Mass. – October 14, 2015 – (RealEstateRama) — The Massachusetts Association of REALTORS® (MAR) reported today that the traditional “back-to-school” season didn’t slow buyer activity in September as pending home sales went up over 35 percent from the same month last year. REALTORS® confidence in the market was high in September as the REALTOR® Market Confidence and Price Indexes were both up from September 2014. This month’s “Hot Topic” question finds that the majority of REALTORS® don’t believe the August stock market correction will impact future closed sales.

September Pending Sales:

• Pending sales have been up 30 of the last 31 months

• Pending sales have been up 30 of the last 31 months

“The need for new clothes, notebooks and backpacks for ‘back-to-school’ didn’t keep Massachusetts home buyers away from making accepted offers in September,” said 2015 MAR President Corinne Fitzgerald, broker/owner of FITZGERALD Real Estate in Greenfield. “People continue to want to live in the Bay State and the market reflects that demand.”

REALTOR® Market and Price Confidence Indexes:

• The RMCI was up for the sixth 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

Monthly ‘Hot Topic’ Question:
The September “Hot Topic” question asked REALTORS® what type of impact they felt the stock market correction in August would have on upcoming closed sales. Of those REALTORS® who responded, 60 percent responded that the stock market correction would have a neutral impact on upcoming closings. Four percent thought there would be a somewhat positive impact, while 36 percent responded that the stock market correction would have either a somewhat negative impact (33%) or significant impact (3%) on upcoming closed sales. No REALTORS® responded there would be a significant positive impact.

“The market isn’t slowing down and REALTOR® confidence reflects that,” said Fitzgerald. “While the August stock market correction was a question mark, REALTORS® who are working with buyers and sellers every day, don’t feel there will be any significant impact on closed sales.” 

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, 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.

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 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 19,000+ 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

Editors and reporters: Please note that the term Realtor is properly spelled with an initial capital “R”, per the Associated Press Stylebook