WALTHAM, Mass. – October 16, 2017 – (RealEstateRama) — The Massachusetts Association of Realtors® (MAR) reported today that single-family pending home sales jumped over four percent this month from September of last year, with prices rising close to five percent. Pending condominium sales were also up, rising more than three percent over last year, while prices increased slightly. Realtors® confidence in the market and in home prices were both up again in September. This month’s “Hot Topic” question asks Realtors® how they would describe the appraisal process in the last six months.
September Pending Sales:
|Single Family||September 2017||September 2016||% Change|
- Pending sales up for 11 out of the last 12 months
- Pending sales up for 10 out of the last 12 months
“The busy summer market shows no signs of slowing down despite home prices hovering near the $400,000 threshold,” said 2017 MAR President Paul Yorkis, president of Patriot Real Estate in Medway. “While there is no such thing as a crystal ball, pending sales is the closing thing we have. At this point, it looks like buyer demand will continue through the fall and winter.”
Realtor® Market and Price Confidence Indexes:
- The Realtor® Market Confidence Index up for the 28th time in 29 months
- The Realtor® Price Confidence Index up for the eighth time in nine months
- 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
“Despite rising prices and low inventory, Realtors® report confidence in the market because buyers are still making offers,” said Yorkis.
Monthly ‘Hot Topic’ Question:
The September “Hot Topic” question asked Realtors® how they would describe the appraisal process in the last six months, with inventory down and prices at or near all-time highs.
Of those who responded, the majority (72%) said that appraisals are generally coming in at the agreed upon price. Another 14 percent responded that appraisals during this time came in below the agreed upon price (11%) or significantly below the agreed upon price (3%). A remaining eight percent said that appraisals were coming in over the agreed upon price. (Less than one percent said appraisals were significantly over.)
“We asked this question last year, and the responses this year are not significantly different,” said Yorkis. “It’s good to know that despite plummeting inventory and prices at all-time highs, the appraisal process is running smoothly.”
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, the 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.
Editors and reporters: Please note that the term Realtor is properly spelled with an initial capital “R”, per the Associated Press Stylebook.