June 2010 REALTOR® Market Index Down but Price Index is Up

June 2010 REALTOR® Market Index Down but Price Index is Up

The June 2010 REALTOR® Market Index Down Compared to the Same Time Last Year. REALTOR® Price Index up for the 11th time in the past 12 months.   WALTHAM, Mass. – The Massachusetts Association of REALTORS® (MAR) announced that after 16 straight months of annual increases, the June REALTOR® Market Index (RMI) is down for the first time since February 2009.  Despite the drop, the June REALTOR® Price Index was up compared to the same time last year. “The combination of the post-tax credit lull and buyers who may have moved up their plans for a summertime purchase to take advantage of the tax credit which expired in April, is having an impact on how REALTORS® are feeling about the current market as reflected in the low Market Index number,” said 2010 MAR President Kevin Sears, broker/co-owner of Sears Real Estate in Springfield.  “Despite this combination of events, REALTORS® do see home prices starting to move up over the next 12 months, which indicates to me that members believe the market will continue to improve.” In June 2010, the REALTOR® Market Index was 28.36, which was 24.8 percent lower than the 37.70 score recorded in June 2009.  On a month-to-month basis, the June 2010 RMI was down 28.19 percent from the May 2010 score of 39.49.  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 Index was up 6.34 percent in June 2010 compared to the same time last year (44.06 in 2009 to 46.85 in 2010).  On a month-to-month basis the June index number was up 22.07 percent from the Home Sales Price Index number in May 2010 (38.38). When REALTOR® members were asked how they would describe their clients’ ability secure financing in the current lending environment, 60 percent of respondents reported that it was either “somewhat” more difficult (37 percent) or “significantly” more difficult (23 percent).  Thirty-two percent of respondents reported that securing financing had “remained the same”, while 11 percent reported that financing was “somewhat” easier to secure.  Zero percent of the respondents reported that financing was “significantly” easier to obtain. About the REALTOR® Index Methodology: The Massachusetts REALTOR® Market Index (RMI) and Price Index (RPI) 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 RMI 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 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).