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What is the "Market Action Index" and how does it effect your home?

By George Fotion

Real Estate Agent with Call Realty Company

January 24, 2011 06:49 AM

real estate sales transactions

As part of my customer service, I've invested a lot of money into a service that will help you understand more about what the trends are in your area. The company has proprietary algorithms that measure the forces of supply and demand as well as tracks the number sales and price movements.

It's a free service I offer that you can easily sign up for. Whether or not you have any interest in buynig or selling real estate, you are welcome to use the service to learn more about the real estate sales transactions in your city.

Here's a sample of the latest report for Rancho Palos Verdes. Whether you're located in the Beach Cities, Torrance or one of the other Peninsula Cities, you can get your own customized reports. Click on the images for a larger, more legible image. By the way, when next you're on http://www.homeispalosverdes.com, click the "Like" button at the top of the page.

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Definition of the "Market Action Index" ...

"Residential house prices are a function of supply and demand, and market conditions can be characterized by analyzing those factors.

"The Market Action Index (MAI) illustrates the balance between supply and demand using a statistical function of the current rate of sale versus current inventory. An MAI value greater than 30 typically indicates a “Seller's Market” (a.k.a. "Hot Market") because demand is high enough to quickly absorb available supply. A hot market will typically cause prices to rise. MAI values below 30 indicate a "Buyer's Market" (a.k.a. "Cold Market") where the inventory of already-listed homes is sufficient to last several months at the current rate of sales. A cold market will typically cause prices to fall."

Keep in mind that an MAI value close to "30" probably means that the local market is balanced or neutral. So if the MAI for your local market is somewhere between 27-33, then it's likely to be either a buyer's market or seller's market based on the individual street or home area that a particular property is in.

Remember, you're welcome to use the other free services and tools, such as searching for foreclosure and bank owned homes and searching for homes and income property for sale throughout the Southern California regions.

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