REALTORS® Felt Confident about Prices in January, but Not as Positive about the Market

Home sales impacted when houses are stripped of valuable metals

WALTHAM, Mass. – February 19, 2014 – (RealEstateRama) — The Massachusetts Association of REALTORS® (MAR) reported today that the January REALTOR® Market Confidence Index (RMCI) was down for the third straight month in January. The REALTOR® Price Confidence Index (RPCI) continued its streak of positive months as it was up again compared to the same month in 2013. The results of the January “Hot Topic” question showed that the thefts of valuable metals from homes are impacting the sales of those homes.

“Low inventory has REALTOR® confidence about prices remaining positive, while confidence about the market stayed somewhat down in January,” said 2014 MAR President Peter Ruffini, regional vice president at Jack Conway & Co.

In January 2014, the REALTOR® Market Confidence Index was 59.8, which was down eight percent from the January 2013 score of 65. This is the third straight month that the RMCI has gone down. On a month-to-month basis, the January RMCI was up 14 percent from the 52.63 score in December 2013. 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 Confidence Index was 76.96 in January, up two percent from the January 2013 RPCI of 75.78. This is the 24th straight month of year-over-year increases and the 11th straight month over the 70-point mark. On a month-to-month basis, the RPCI was up two percent from the December 2013 RPCI of 75.39.

The monthly “Hot Topic” question asked REALTOR®-members whether they (or someone else in their office) had been involved with a sale that was impacted by the theft of metals (e.g. copper pipe, wiring, siding, cast iron or other valuable metals) from the home. Of those who answered yes, 37 percent responded that the transaction closed, but there was a serious impact. Thirty percent responded that the transaction closed, but there was minimal impact. Eleven percent reported that the sale completely fell apart, with 22 percent of REALTORS® responding that their buyers decided not to make an offer because of the theft.

“The theft of metals from homes for sale is a problem for homeowners and we hope the state legislature is able to come up with the compromise necessary to make it much harder for scrap metal thieves to profit from their crimes,” said Ruffini.

About 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.