The Massachusetts Association of REALTORS® (MAR) reported today that the number of homes and condos put under agreement in August rose over last year. The median price for pending home sales remained above the $400,000 mark for the fourth straight month. August's Hot Topic question found that REALTORS® report a shortage of starter homes as the most common issue for first time homebuyers throughout Massachusetts.
August Pending Sales
|Homes||August 2018||August 2017||% Change|
|Total Sales||5,572||5,228||+ 6.6%|
|Median Price||$419,900||$392,000||+ 7.1%|
Pending sales have been up or flat 13 of the last 14 months.
|Condos||August 2018||August 2017||% Change|
|Total Sales||1,923||1,880||+ 2.3%|
|Median Price||$385,000||$349,000||+ 10.3%|
Pending sales have been up or flat 12 of the last 14 months.
"Vacations and hot summer days did not stop consumers from making offers on homes in Massachusetts this August," said 2018 MAR President Rita Coffey, general manager of Century 21 Tullish & Clancy in Weymouth, MA. "The strong buyer demand has kept the pending price of single family homes well over the $400,000 mark."
REALTOR® Market & Price Confidence Indexes
|Confidence Index||August 2018||August 2017||% Change|
|Median Price||64.52||71.91||- 10.3%|
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.
"Realtor® confidence in the market is still stong due to buyer demand, but soaring prices and lack of inventory continue to make buying a home difficult for some consumers," said Coffey.
Monthly Hot Topic Question
The August "Hot Topic" question asked REALTORS® to name the most common issue they see that makes it difficult for first time homebuyers to successfully purchase a home.
Of those who responded, close to half (48%) said that a shortage of starter homes was the most common issue that makes it difficult for first time homebuyers to successfully purchase a home. At a close second, another 45 percent responded that the current high price of homes makes it difficult for their first time buyers. Another 25 percent listed a lack of down payment as an issue. Other common issues making it difficult for first time buyers to purchase a home include student loan debt (10%), credit issues/ability to secure financing (10%), and unstable job situations (< 1%.)
The percentage of REALTORS® who reported a shortage of starter homes as the most common issue for first time homebuyers in Massachusetts increased from last year, when only 39 percent cited the issue.
"Despite a lot of conversation surrounding important topics like student loan debt and stable income, it seems issues with the housing market are the biggest headache for first time home buyers in Massachusetts," said Coffey. "They can't get a foot in the door without a solid inventory of affordable starter homes."
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 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.
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 capitalized letters and the registered trademark symbol, per the Associated Press Stylebook.