Record-low inventory selected as real estate story of the year by Realtors®
WALTHAM, Mass. – January 10, 2017 – (RealEstateRama) — The Massachusetts Association of Realtors® (MAR) reported today that holiday cheer wasn’t the only thing in abundance in December as both the number of homes put under agreement and prices were up in the final month of the year. This was also true for condominiums put under agreement. This trend was mirrored in the year-end totals for 2016 compared to 2015. Realtors’® confidence in the market was positive again in December as their confidence in prices was down slightly. This month’s “Hot Topic” question asked Realtors® to select the headline that best describes the year, and “record-low inventory” came out on top.
December Pending Sales:
|Single Family||December 2016||December 2015||% Change|
- Pending sales have been up 45 of the last 46 months
|Condominium||December 2016||December 2015||% Change|
- Pending sales have been up 15 of the last 16 months
Year-End Pending Sales:
|Avg. Median Price||$352,839||$341,142||3.4%|
|Avg. Median Price||$319,527||$330,435||3.4%|
“For the second straight December, home buyers were not going to let holiday shopping take away their focus from buying a home,” said 2017 MAR President Paul Yorkis, president of Patriot Real Estate in Medway. “Even with a record low number of homes for sale throughout 2016, buyers have stayed fully committed to finding the right home for the right price and making successful offers.”
REALTOR® Market and Price Confidence Indexes:
|Confidence Index||December 2015||December 2014||%Change|
- The Realtor® Market Confidence Index was up for the ninth 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
“Demand in December and in 2016 has kept Realtor® confidence in the market very high,” said Yorkis. “However, with high prices and interest rates starting to tick up, Realtors® are feeling slightly less confident that prices will be able to maintain the direction they have been going in.”
Monthly ‘Hot Topic’ Question:
The December “Hot Topic” question asked Realtors® to look back at 2016 and select the story of the year. Of those who responded, 44 percent selected “record low inventory of homes for sale” as the story of the year. The “end of historically-low interest rates” was selected by 20 percent of the respondents and 14 percent of the respondents selected the “first full year of T.R.I.D. (new closing procedures)” as the story of the year. Other choices considered included: “sales prices hitting all-time highs” (10%), “rise of email/cyber-crime scam attempts” (5%), “other” (5%), and “smart home technologies” (<1%).
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 24,000+ 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