Real Estate News

Warwick, RI, April 30, 2009…Rhode Island existing home sales increased 21.5 percent from February to March in contrast to national sales data released from the National Association of Realtors (NAR), which showed a 3 percent drop.  The data includes sales of condominiums and single and multi-family homes.  The Rhode Island statistics from the Rhode Island Association of Realtors (RIAR) showed a 12.4 percent increase in sales from March 2008 to March 2009 while the NAR data showed a nationwide 7.1 decrease in sales among all three categories combined during the same twelve months.  RIAR statistics include Rhode Island sales only, while NAR data includes the Fall River and New Bedford metropolitan areas.  Rhode Island seems to be bucking the national trend due to substantially lower prices, particularly in the lower price brackets and the multi-family home category.  NAR recently reported that distressed sales accounted for just over half the sales in March.  Likewise, Rhode Island distressed sales accounted for 52.6 percent of sales.

Rhode Island single family home sales stabilized, falling only 1 percent in March from a year earlier while pending sales – those under contract but not yet closed – rose 35 percent in a year, from 1004 in March 2008 to 1355 in March 2009. The median price of existing single family homes sold in March was $180,000, down from $243,000 a year prior.  (Median price reflects the midpoint of sales, with half the sales selling for more and half selling for less.) More than 44 percent of the single family sales were distressed sales, sold through foreclosure or short sale.  The median price of traditional, non-distressed single family sales was $225,000.  The non-distressed median price seems to be stabilizing close to prices seen in 2004, a year considered good for housing prices as it was part of the housing boom. The number of single family homes on the market is also falling, bringing supply and demand back into balance.  There were 5172 homes for sale in March compared to 6347 the year prior.

In the multi-family market, median price fell by more than half during the past year to $70,000 from $156,000, and the number of sales more than doubled to 211 in March of this year compared to 103 in March, 2008.  Foreclosures and short sales accounted for 78.2 percent of the sales, down from 84.6 percent in February.  The median price of non-distressed sales was $163,500. 
“There are fantastic bargains out there, particularly for first time homebuyers who can reap the benefits of low interest rates as well as the $8000 tax credit for first time buyers, but you need to know what you’re getting into” said Paul Leys, President of the Rhode Island Association of Realtors. “In most cases of foreclosure, consumers are buying properties in “as is” condition and that often means that considerable restoration is needed.  If they’re not buying in the distressed market, they need to be more realistic in terms of price. ”

The condo market, which held steady for most of the housing correction, has begun to slow, showing a 21.8 percent drop in sales from March 2008 to March 2009.  Twenty-two (22), or 32.4 percent, of the 68 total condo sales in March 2009 were distressed sales. The median price was down 16.6 percent year-to-year from $199,000 in March 2008 to $166,000 last month. The median price of non-distressed condo sales was $256,000. Most recently however, condo sales increased 4.6 percent from February to March but median price decreased 11.7 percent to $166,000 in March from $188,000 in February.
“The reason for the sudden slowdown in condo sales could be the increasing affordability of single family homes,” noted Leys.  “If you look at a median condo price of $166,000, where buyers will also have to pay association fees, the median single family home price of $180,000 could seem pretty attractive by comparison.”

At a Rhode Island Real Estate Housing Summit recently hosted by the Rhode Island Association of Realtors, Lawrence Yun, Chief Economist of the National Association of Realtors said “I think the worst in housing is happening now or is already passed.” Yun predicted that the Providence housing market would most likely see the earliest recovery in New England.  He explained that economic indicators point to a 10 to 20 percent increase in Rhode Island sales by the second half of the year but warned that the psychological effects of consumer confidence could significantly affect that outcome

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