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RHODE ISLAND ASSOCIATION OF REALTORS®, INC.

"The Voice of Real Estate in Rhode Island"
Serving Rhode Islanders Since 1948
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Press Release

Contact: Kerry Park
Ph: 401-432-6948
Email: kerry@rirealtors.org

 

RI Association of REALTORS® Releases 2008 Second Quarter Sales Statistics

Warwick, RI – July 30, 2008…The Rhode Island Association of Realtors (RIAR) released June sales statistics today which showed some positive signs for Rhode Island’s real estate market.  For the third month in a row, single family pending sales rose. Pending sales are those sales under contract but not yet closed and are considered the most current indicator of the market.  There were 1119 pending sales this June compared to 1036 in June of 2007.  Another positive sign was a decline in single family home inventory year to year.  Inventory in June 2008 declined to 6679 from 6772 in June 2007.  Single family inventory had also declined in May.  A reduction in inventory is key to rebalancing the real estate market. Rhode Island’s trends stand in contrast to national statistics which have recently shown lower pending sales year to year.

Of the 716 single family homes sold in June, 143 (19.97 percent) were bank-owned and sold at a median price of $250,500, down slightly from the median price of $252,500 in June of 2007.  Bank-owned properties are typically properties that have gone through foreclosure and are resold by the bank generally at less than market value.  RIAR began tracking bank-owned properties in February of this year.  The June sales also included 24 short sales – “distressed” sales in which property owners avoid foreclosure by negotiating a sale of something less than market value with the bank.  Total bank-owned and short sale properties comprised 23.32 percent of the market. RIAR began tracking short sale transactions in May of this year.

The association also released second quarter and half-year sales statistics which showed a 17.15 percent decline in the number of single family homes sold from April through June compared to the same time period a year ago, (1889 units this year compared to 2280 last year.) Three hundred and seventy-nine of the homes sold, or 20.06 percent, were bank-owned.  Median sales price was down in the second quarter from $280,000 last year to $250,000 this year, a 10.71 percent drop.  From January through June, sales volume dropped 19.84 percent and the median price for single family homes sold from January through June decreased 9.7 percent.

 While sales volume has remained relatively the same from January to June, June saw less than a one percent (.79) drop in price compared to a 6.9 percent drop in second quarter and an even greater 9.7 percent drop January through June. That, in addition to pending sales going up and the surplus of homes on the market going down, could be signs of a recovering market. “The trends seem to be going in the right direction,” said Rob Scaralia, President of the Rhode Island Association of Realtors. We’re hopeful that since Rhode Island was among the first markets to enter the boom, we’ll be among the first to come out of the decline,” he added.

The number of multi-family homes sold rose during the second quarter to 407 from 340 the year prior but median price declined substantially, from $265,000 to $150,000.  From January through June, sales volume decreased only about one half percent (.45) percent in the multi-family category but median price dropped a substantial 43 percent, from $265,000 during the first half of 2007 to $151,050 during the first half of 2008. The price decrease is attributed to the glut of foreclosures in the multi-family market.  Two hundred and forty-seven of the 407 multi-family properties sold in the second quarter (60.7 percent) were bank-owned.  Investors of multi-family properties are typically the first to leave the market during a downturn.  Conversely, they are the first to jump back into the market when prices become attractive, as evidenced by the stable sales volume.

The volume of condo sales declined most markedly, down 27.69 percent in the second quarter year to year from 549 to 397.  The median price of condos however, was least affected of all categories, down only 4.08 percent from $222,000 during the second quarter of last year to $220,000 in April through June of this year. Only 35 of the second quarter condo sales involved bank-owned properties.  From January through June, the number of condos sold dropped 31.46 percent from 944 to 647 units sold. The price remained relatively constant, decreasing only .2 percent from $215,500 to $215,000.

“It’s important to analyze the trends to understand the market.  Month to month sales don’t tell the story due to seasonal sales fluctuations but comparing the data year to year gives you a benchmark to figure out where you’re headed,” commented Scaralia.  “I think what we’re seeing is very promising and the government's stimulus packages will help even more. Many first-time homebuyers will return to the market to take advantage of the temporary homebuyer tax credit of up to $7,500.”

“The Rhode Island market is showing signs of recovery,” agreed Lawrence Yun, Chief Economist of the National Association of Realtors.  Yun also concurred that first-time home buyers are critical to the health of the housing market. “About four in 10 homes are purchased by first-time buyers, which frees existing owners to trade up,” he said. “With many potential first-time home buyers on the sidelines, a first-time buyer tax credit would have a significant positive impact on both housing and the economy.”


 

Rob Scaralia

2008 REALTOR®
State President

About the Rhode Island Association of REALTORS®

The Rhode Island Association of REALTORS®, the largest professional organizations in Rhode Island with approximately 5,000 members in nearly 700 offices, has been serving Rhode Islanders since 1948. Advocating for Rhode Island 's property owners, the Rhode Island Association of REALTORS® provides a facility for professional development, research and exchange of information among its members and to the public and government for the purpose of preserving the free enterprise system and the right to own real property.

Last year, Rhode Island REALTORS® were involved in over 10,600 real estate transactions with a total sales volume of $3.5 billion. The Association is one of more than 1,800 local boards and associations that comprise the National Association of REALTORS® (NAR). The National Association of Realtors®, “The Voice for Real Estate,” is America 's largest trade association, representing over one million members involved in all aspects of the residential and commercial real estate industries and who subscribe to a strict Code of Ethics.