More Warm Weather Allows for a Strong Start to the Year in Pending Sales

Majority of listings in the past six months have no “smart home” devices

WALTHAM, Mass. – February 10, 2016 – (RealEstateRama) — The Massachusetts Association of Realtors® (MAR) reported today that buyers benefited from a mild-weather month in January to push pending home sales up almost 40 percent from last year. Realtors® confidence in the market was positive again in January. This month’s “Hot Topic” question finds that the majority of listings Realtors® saw in the past six months did not have any “smart home” features, like a thermostat or security system controlled via internet-connected devices.

January Pending Sales:

• Pending sales have been up 34 of the last 35 months

• Pending sales have been up 34 of the last 35 months

“Buyers were again out in force in January and were able to take advantage of the mild weather to see homes and make a high number of offers that were accepted in January,” said 2016 MAR President Annie Blatz, branch executive at Kinlin Grover Real Estate on Cape Cod. “A still improving economy and an increase in first-time homebuyers in Massachusetts added to the buyer demand.”

REALTOR® Market and Price Confidence Indexes:

• The Realtor® Market Confidence Index was up for the tenth straight month
• The Realtor® Price Confidence Index was up or flat for the fifth 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

“Home prices have been steadily increasing over the past few years, and the Realtor® Price Confidence Index has grown with it,” said Blatz. “While confidence in the overall market is positive, a lack of homes for sale is what is keeping the number in its current range.”

Monthly ‘Hot Topic’ Question:

The January “Hot Topic” question asked Realtors® how frequently a listing had “smart home” features like thermostats, security systems and lighting that are controllable by an internet-connected device. Of those Realtors® who responded, over 58 percent reported that none of the listings had “smart home” features. Forty-one percent of Realtors® responded that either most of the homes (2%), or some of the homes (39%) had “smart home” features. None of the respondents said that all of the homes had “smart home” devices.

“These smart home devices are still relatively new to the marketplace, but are starting to increase in popularity here in Massachusetts,” said Blatz. “It’s a good bet that we will see their use rise as more people see the benefits.”

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.

• 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 more than 21,000+ 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