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The Market Action Index PDF Print E-mail

One of the unique market statistics provided by Altos Research is their proprietary "Market Action Index" (MAI).  They developed the MAI to roll together some of the key stats (and a few others) to generate a number, indexed to "30", to determine if the local market is trending towards a "buyer's market" or "seller's market."  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.

Source:  Altos Research

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