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 September 2007 Pending Sales

October 16, 2007, Warwick, RI – The number of projected closings for single family homes dropped in September to 791 from 1025 during September of 2006.  Projected closings are a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing. Projected closings are considered the most current indicator of sales trends. 

“The subprime mortgage scare has definitely had an impact on the market and people are sitting back and waiting to see what shakes out” said Cecile Cohen, President of the Rhode Island Association of Realtors (RIAR.)  “We hear so much about it in the media that it can be hard to put into context.  In

Rhode Island , the worst case scenario is that foreclosures could affect only one percent of the total homes.”Inventory increased from 6453 in September 2006 to 6883 in September 2007.  The median price of a single family home sold from July through September of this year dropped three percent from $286,500 last year to $279,900 this year.  The median price reflects the marketing mix (size and type) of properties on the market and does not necessarily reflect adjustments to like properties year-to year.  Days on market increased 10 days year to year to 84 days for the period July through September.

The relationship between median price and inventory is dictated by the law of supply and demand explained Cohen.  “Right now buyers are in the driver's seat because there's a lot of inventory on the market to choose from.  Until the inventory decreases, buyers are going to set the price.  The lesson to be learned for sellers is that there are buyers out there and they are buying.  The secret is pricing the property appropriately.  If they're not willing to do that, it may be in their best interest to take their property off the market for a while until the market comes back into balance,” she said.

According to Lawrence Yun, Senior Economist for the National Association of Realtors, it's important to place the current housing market in perspective, noting that 2007 will be the fifth highest year on record for existing-home sales.  “Although sales are off from an unsustainable peak in 2005, there is a historically high level of home sales taking place this year – a lot of people are, in fact, buying homes,” he said.  “One out of 16 American households is buying a home this year.  The speculative excesses have been removed from the market and home sales are returning to fundamentally healthy levels, while prices remain near record highs, reflecting favorable mortgage rates and positive job gains.

About the Rhode Island Association of REALTORS®

The Rhode Island Association of REALTORS®, one of the largest trade organizations in Rhode Island with more than 5,000 members in nearly 1,000 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, RI Realtors transacted $6.9 billion in residential real estate sales and $7.1 billion in total sales and rentals including commercial transactions.

The Association is one of more than 1,500 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 1.5 million members involved in all aspects of the residential and commercial real estate industries and who subscribe to a strict Code of Ethics.