By Les Masterson:
Massachusetts Realtors are more confident about the real estate market than they were a year ago.
The Massachusetts Association of REALTORS® (MAR) reported that the August REALTOR® Market Confidence Index (RMCI) and the August REALTOR® Price Confidence Index (RPCI) were both higher in August 2013 than they were a year earlier.
“We continue to see significant year-over-year gains in REALTOR® confidence in the market as we have for the past 25 months,” said 2013 MAR President Kimberly Allard-Moccia, broker-owner of Century21 Professionals in Braintree. “Considering that inventory continues to be down and interest rates have been ticking up, buyer and seller activity continues to push REALTOR® sentiment in a positive direction.”
The August 2013 REALTOR® Market Confidence Index was 69.26, which was up 23 percent from the August 2012 score of 56.41. It was the 25th straight month of year-over-year increases, though the first time in six months the RMCI has dipped below the 70-point mark. The RMCI dipped from 71.09 in July 2013.
Meanwhile, the REALTOR® Price Confidence Index was 73.57 in August, up from the August 2012 RPCI of 64.19. It was the 19th straight month of year-over-year increases and the sixth straight month over the 70-point mark. It was also a slight increase over July 2013’s RPCI of 72.27.
“A slight increase in interest rates can drive activity as buyers who have been hesitant will purchase before they go up more, but more significant increases has the opposite effect,” said Allard-Moccia
According to the Mass Association of REALTORS:
“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).”