Realtors less bullish on local housing market
An index that tracks expectations about the local housing market posted a reading of 39.49 in May, down from an April score of 51.76, the Massachusetts Association of Realtors said today.
This is the first month that the index has reported a decrease in optimism about Massachusetts home prices home prices since June 2009, the association said, and the drop was likely caused by the expiration of a federal tax credit designed to encourage home purchases. Still, the May 2010 reading was better than the reading in May 2009, when the index clocked in at 33.19. The index uses a 100-point scale, with a score of 50 representing a midpoint between a strong and a weak market. The index is based on monthly responses from a random sampling of association members who are asked questions about current and future market conditions.
Association president Kevin Sears commented on the index reading for May 2010 in a statement.
“In the first month post-tax credit, realtors are feeling the results of buyers and sellers catching their breath from all the activity of the first four months of the year,” Sears said. “We’ll be looking toward the ultimate incentive of low interest rates and more affordable pricing to build on the success of the market to date and move the index numbers back up.”
The latest reading of the index seems to be in line with data that the association released recently about pending Massachusetts home sales for the month of May.
The association said then that pending single-family home sales fell 3 percent and condominium sales dropped 6 percent last month, when compared with May 2009. Pending sales are measured by signed purchase and sales agreements and are considered an indicator of where the housing market might be headed.
To read a Globe story about pending sales, please click here.