Frequently Asked Questions
The Bright MLS | T3 Home Demand Index is an index that is designed to track the level of interest and activity of actively engaged home buyers and is a measurement of home buying demand in a specific region. The Bright MLS | T3 Home Demand Index does not track home prices or the number of sales. Instead, it measures activities that happen before sales transactions are completed, and is thus considered a leading indicator of market activity.
Each type of home is segmented to capture different common price points and housing types. Cluster analysis is used to identify the prevalent price ranges for each type of home within each geographic area.
The Bright MLS | T3 Home Demand Index has five levels of ratings, each based on index scores showing the level of home demand in the specific market, either in the aggregate or individually for each type of home. The category ratings are:
- High – High demand with lots of consumer pre-sales activity occurring.
- Moderate – Activity showing consistently strong buyer interest.
- Steady – Demand at regular or “average” levels. This is normal market demand.
- Slow – Relatively low demand.
- Limited – Very little demand and weak buyer interest.
The Bright MLS |T3 Home Demand Index currently covers the three greater metropolitan market areas, served by Bright MLS, namely the Greater Philadelphia Area, the Greater Washington D.C. Area, and the Greater Baltimore Area. Smaller, more local regions are available for a deeper dive within the map for each market area.
These market areas are determined by Bright MLS and are based on the natural real estate markets that occur in these geographies. These areas are referred to as MLS Market Areas (MMA). The main market areas in the Bright MLS | T3 Home Demand Index are defined by counties and are reflected in the list below.
Greater Philadelphia Area
- Central Pennsylvania – Adams, PA; Berks, PA; Cumberland, PA; Dauphin, PA; Franklin, PA; Fulton, PA; Lancaster, PA; Lebanon, PA; Perry, PA; Schuylkill, PA; York, PA.
- Ocean County – Ocean, NJ.
- Philadelphia Metro – Bucks, PA; Burlington, NJ; Camden, NJ; Chester, PA; Delaware, PA; Gloucester, NJ; Kent, DE; Mercer, NJ; Montgomery, PA; New Castle, DE; Philadelphia, PA.
- Salem-Cumberland – Cumberland, NJ; Salem, NJ.
Greater Baltimore Area
- Baltimore Metro – Anne Arundel, MD; Baltimore City, MD; Baltimore, MD; Carroll, MD; Harford, MD; Howard, MD.
- DelMar Coastal – Somerset, MD; Sussex, DE; Wicomico, MD; Worcester, MD.
- Maryland Eastern Shore – Caroline, MD; Cecil, MD; Dorchester, MD; Kent, MD; Queen Annes, MD; Talbot, MD.
Greater Washington DC Area
- Maryland-West Virginia Panhandle – Allegany, MD; Berkeley, WV; Garrett, MD; Grant, WV; Hampshire, WV; Hardy, WV; Jefferson, WV; Mineral, WV; Morgan, WV; Pendleton, WV; Washington, MD.
- North Central Virginia – Caroline, VA; Clarke, VA; Culpeper, VA; Fauquier, VA; Frederick, VA; Fredericksburg City, VA; King George, VA; Madison, VA; Manassas City, VA; Orange, VA; Page, VA; Prince William, VA; Rappahannock, VA; Shenandoah, VA; Spotsylvania, VA; Stafford, VA; Warren, VA; Winchester City, VA.
- Southern Maryland – Calvert, MD; Charles, MD; Saint Marys, MD.
- Washington D.C. Metro – Alexandria City, VA; Arlington, VA; Fairfax, VA; Falls Church City, VA; Frederick, MD; Loudoun, VA; Montgomery, MD; Prince Georges, MD; Washington, DC.
Data used in the Bright MLS | T3 Home Demand Index is sourced from the Bright MLS, and depending on availability in a particular area, includes the following:
- Data from MLS systems that includes home searches and viewing activity of agents and consumers working with agents
- Agent/Consumer showing appointment reservation systems
- MLS listing and home sales
The Bright MLS | T3 Home Demand Index utilizes a patent-pending algorithm that combines an array of source data, including pre-sale activity indicators such as showings per listing and views per listing. Each of the components is weighted based on an analysis of past trends in home sales and correlations with housing market activity for the specific market. The Index scores are then aligned with a base period set to a value of 100. The index calculation is periodically revised to improve the Bright MLS | T3 Home Demand Index and makes use of a number of machine learning and statistical methods to improve accuracy and relevancy between pre-sale consumer and real estate professional activities and actual sales transactions.
The index has been set to 100 using a base period of activity for the year 2019 for each of the metropolitan areas. All future activities are measured against the baseline. This is a common practice with indexes, and the Home Demand Index was designed on this principal.
An Index score of 125, for example, means that demand for homes in a particular segment has increased by 25 points, relative to the baseline. This reflects heightened buyer intention to purchase a home compared to the base period of 2019. Conversely, an index score of 90 indicates a weaker demand for homes than the base period. Index scores can also be compared between any two periods, not just relative to the base period, to see how demand for homes has changed. Because the index does not measure sales levels or prices, which vary by geographic area, index scores can also be compared across geographic areas.
Each publication of the Bright T3 Home Demand Index shows time-based charts for the last 24 months, a map of the metropolitan area that is color coded to various Index scores, and the Home Demand Index for each housing type represented in the market.
The Bright T3 Home Demand Index is published monthly.
Many indexes measure sales activity after the sale occurs, and as such, reflects how the market *was* weeks or months ago. The Bright T3 Home Demand Index measures home buying demand activities before actual sales transactions occur. The Bright T3 Home Demand Index is also calculated at more localized levels as well as fine-tuned to the different types of homes, so it provides a more accurate view of home demand than other real estate indexes.
The index can be used in several ways. First, it provides a reading on the level of consumer home buying interest across several residential segments. Second, the index allows the user to compare the latest data with information from a year earlier and spot trends. Finally, the index can be used to make comparisons across geographic areas and uncover trends at the metropolitan, county or ZIP code levels. The Home Demand Index provides brokers and agents a new way to determine current home buying demand in a region and is a significantly more dynamic, localized and real-time method than using pending or sold data.