I've been posting monthly
real estate market report updates on this site for cities around Pasadena.
One of the key real estate indicators that I refer to is the Market
Action Index or MAI.
What is the Market Action Index ? And, why does the
Market Action Indicator matter?
Residential house prices are a function of supply and demand, and
market MARKET ACTION INDEX conditions can be characterized by
analyzing those factors.
My research company, Altos Research
uses an algorithm to divide a Buyer's Market from a Seller's Market. The red
line at 30 is that line.
For example in the graph below for Pasadena's
real estate market, it has been a COLD, BUYER'S MARKET
since end of 2007 with the MAI hovering quite a bit under the balanced market of
30, closer to 15. Now, this graph is for the entire Pasadena real estate market.
Each zip code within the city has a different MAI.
Come back to this site to watch this index for sustained changes:
if the index falls into the Buyer's Market zone for a long period, prices are
likely in for a downward correction.
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 gobble up
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
If you are interested in receiving a weekly real estate market
reports with the Market Price Index, you can request
Market Real Estate Report here and it will be emailed to you
automatically each Monday. This is a report that I order specifically for the
readers of my website from Altos Research who specializes
specifically in real estate housing market activity throughout the country.
I currently offer real estate market reports for Pasadena, Alhambra, San
Marino, South Pasadena, Monterey Hills (under Los Angeles 90042), Arcadia,
Altadena, San Gabriel and more.
If you have additional questions about the state of the Pasadena housing
market, please call me at 626-629-8439 .