Massachusetts Pending Home Sales Up and Market Confidence High in December to Close out the Year and Throughout 2017

by Eric Berman - eberman@marealtor.com - 781-839-5507 | Jan 10, 2018

Realtors® select ‘Record-low inventory’ for the second straight time as real estate story of the year  
 
WALTHAM, Mass. – January 10, 2018 – The Massachusetts Association of Realtors® (MAR) reported today that buyers continued to come out and make accepted offers on single-family homes and condominiums in the final month of the year as the number of homes put under agreement and prices increased in December. As a whole, 2017 saw both homes put under agreement and average median prices increase compared to 2016. Realtors’® confidence in the market and prices was positive again in December. This month’s “Hot Topic” question asked Realtors® to select the headline that best describes the year, and “record-low inventory” came out on top. 

December Pending Sales: 

Single-Family

December 2017

December 2016

% Change

Sales

3,162

2,834

11.6%

Median Price

$382,500

$358,750

6.6%

  • Pending sales have been up 11 of the last 12 months 

Condominium

December 2017

December 2016

% Change

Sales

1,164

1,068

9.0%

Median Price

$352,500

$342,500

2.9%

  • Pending sales have been up 10 of the last 12 months 

Year-End Pending Sales: 

Single-Family

2017

2016

%Change

Sales

57,308

56,605

+1.2%

Avg. Median Price

$376,292

$353,644

+6.4%

 

Condominium

2017

2016

%Change

Sales

22,634

21,896

+3.4%

Avg. Median Price

$349,163

$331,929

+5.2%

 
“It seems the concept of an ‘off-season’ is going to be another topic we’ll be reading about in the real estate history books with buyer demand being so high throughout the past several years,” said 2018 MAR President Rita Coffey, general manager of CENTURY 21 Tullish & Clancy in Weymouth. “Despite the snow and freezing cold, people continue to want to live in Massachusetts, but we need more homes to meet the demand.” 
 
Realtor® Market and Price Confidence Indexes: 

Confidence Index

December 2017

December 2016

%Change

Market

74.62

66.95

11.5%

Price

71.55

69.70

2.7%

  • The Realtor® Market Confidence Index was up for the 10th straight month 

  • 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     

Year-End Realtor® Market and Price Confidence Indexes: 

Confidence Index

2017

2016

%Change

Market

77.16

73.79

4.4%

Price

71.92

72.18

-0.4%

 
“Strong buyer demand in 2017 kept Realtor® confidence in the market high this year,” said Coffey. “However, record high prices cast a shadow over the momentum as Realtors® found some of their buyers priced out by the competition.”  

Monthly ‘Hot Topic’ Question: 

The December “Hot Topic” question asked Realtors® to look back at 2017 and select the story of the year. Of those who responded, 57 percent selected “record low inventory of homes for sale” as the story of the year for the second year in a row. Federal tax reform was selected by 24 percent of the respondents and 12 percent of the respondents selected “median sales prices hitting an all-time high” as the story of the year. Other choices considered included: “other” (4%), “internet connected homes (Amazon Echo, Google Home, etc.)” (2%), and “the ongoing issue of email/cyber-crime scams” (<1%). 

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 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. 

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Editors and reporters: Please note that the term Realtor is properly spelled with an initial capital “R”, per the Associated Press Stylebook.