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February Sales Increase with Movement of Distressed Properties
Tuesday, March 31, 2009

Warwick, RI, March 31, 2009 …Rhode Island single family home sales rose 7.8 percent in February, from 372 sales in February 2008 to 401 sales in February this year.  Pending sales – those under contract but not yet closed – also increased nearly 20 percent (19.5) percent according to sales statistics released today by the Rhode Island Association of Realtors.  The statewide information comes on the heels of a report by the National Association of Realtors (NAR) that nationally, sales rose 5.1 percent for all property types in February.

“Sales have been rising pretty consistently since September,” said Paul Leys, President of the Rhode Island Association of Realtors.  “They slipped a bit in January but many people were waiting to hear the specifics about the government’s stimulus incentives, particularly the first-time homebuyer credit of $8000. Now that there is more information out there, it appears that buyers are getting off the fence.”

February sales statistics showed a decrease of 14.7 percent of homes on the market.  Six thousand and eighty-six (6086) single family homes were listed for sale through the State-Wide MLS in February 2008 compared to 5194 homes for sale on February 2009.  The average number of days a home stayed on the market fell to 104 last month compared to 115 the year prior.  Both signs indicate positive movement in the housing market.

Prices were down in February by 25.8 percent, falling from $249,250 in February 2008 to $185,000 this year.  “Forty-two (42.6) percent of February’s single family home sales involved foreclosures or short sales which had an enormous impact on price. If you take those distressed sales out of the mix, the median price for homes that sold as conventional sales was $222,500,” explained Leys.  “The non-distressed price is significant because we really have two markets out there right now, distressed and conventional. Prices have dropped in both but not nearly as significantly for conventional sales,” he explained. “Whether you’re a buyer or a seller, you have to understand which market you’re working in,” Leys commented.

The percentage of distressed sales in February fell slightly from the month prior and the median price went up month-to-month, from $175,000 in January to $185,000 in February.  “The price increase is good news for Rhode Island,” said Leys. “In recent months, NAR Chief Economist Lawrence Yun has indicated that Rhode Island seems to be following in California’s footsteps. (California) just saw its median price rise for the first time in three years.” 

The statistics indicated great variances in sales trends between towns. Providence, for example, which had a distressed sale rate of 72 percent, saw a median sales price of $75,000.   Overall, 12 towns had median prices below the statewide median of $185,000, all with distressed sale rates of nearly 50 percent or more.  Those towns were: East Providence, Providence, North Providence, Cranston, Woonsocket, Pawtucket, Glocester, Hopkinton, West Warwick, Warwick, Coventry and West Greenwich. 

Condo sales fell 14.5 percent from February 2008 to February 2009, with 65 selling this year compared to 76 last year.  The median price also decreased 17.5 percent to $188,000 from $228,000 last year. Eighteen of the 65 sales in February 2009 involved foreclosure or short sale procedures.  The non-distressed sale median price was $217,500.  The overall median price of $188,000 went up 13.3 percent from the month prior, rising from $166,000 in January.

Multi-family sales were up over 70 (70.5) percent as median price continued to drop.  One hundred and sixty-two multi-family properties sold in February, compared to 93 the year prior.The median price of multi-family property sales, 84.6 percent of which were comprised of distressed sales, tumbled to $80,000 from $175,000 in February 2008.  The median price of non-distressed multi-family properties was $175,396.
 
“Investors and first-time homebuyers have re-entered the market to snatch up bargains,” commented Leys. “That’s great news because if these properties lingered on the market, it would be catastrophic.  Now, properties on the market in the towns with the highest distressed rates are moving the quickest, generally in less than three months,” he said.

According to statistics compiled by the National Association of Realtors (NAR), sales in the Northeast dropped 14.9 percent from February 2008 to February of this year. Rhode Island however, bucked the trend, rising 15.7 percent among all categories (single family, condominium and multi-family.

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