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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
Cell: 401-207-4502
Email: kerry@rirealtors.org

 

Continued Recovery for Rhode Island Housing Market

Warwick, RI, September 24, 2009…The median price of Rhode Island existing single family homes rose for the fifth month in a row to $220,000 in August 2009 from $210,000 the month prior.  The median price reflects the midpoint of sales prices where half the homes sold for more and half sold for less. Though the median sales price remained down from a year earlier (-6.4 percent), the percentage of decline has decreased substantially in recent months.  The year began with a median single family sales price which lagged 28.6 percent below the January 2008 price.  The number of sales sold through foreclosure or short sale also continued a five-month downward trend, with 29 percent of the homes sold falling in the distressed category.   In January nearly half of all single family sales (47.8 percent) were sold under duress. Sales in this category often require further investment for renovation.  The median price of non-distressed sales in August was $250,000, the highest point reached this year. Town-by-town statistics show that the bulk of distressed sales occurred in Warwick and Providence.

The number of single family sales continued to soar in August compared to the year prior spurred largely by the federal  $8000 tax credit to eligible home buyers who have not owned a home in at least the past three years.  Sales increased 28.9 percent from August 2008 to August of this year, but dipped slightly from July to August, down 3.4 percent.  The National Association of Realtors is encouraging Congress to extend the tax credit which is set to expire at the end of November.  As it now stands, purchase and sales agreements should be signed no later than Halloween in order to potentially close by the November 30th deadline.

The number of single family homes available for sale has dropped steadily since April, falling more than 21 percent in August 2008 from August 2009.  The reduced inventory has left the state with a 6.9 month inventory of homes for sale.  A six-month supply is considered a balanced market between supply and demand and therefore buyers and sellers.

“By all accounts we’re heading in the right direction,” commented Paul Leys, President of the Rhode Island Association of Realtors. “Though sales dipped a bit from July through August, that’s not unusual in the summer months.”  Leys explained that comparing statistics to the same time period 12 months earlier eliminates variations from seasonality. “The most important thing is that supply and demand has come back into a more normal range of balance in recent months.  That’s the best indicator of market stability,” said Leys.

The multi-family market continues to be marked predominantly by distressed sales, with more than 77 percent of sales being sold though short sale or foreclosure. The small percentage of sales sold through conventional means saw a median sales price of more than double their distressed counterparts -$177,000 compared to an $80,000 sales price for multi-family properties overall.  Driven by low prices, the number of sales of multi-family homes remained dramatically higher than last year, up 37 percent from August 2008 to August of this year. There was a 5.3-month supply of multi-family properties on the market last month. 

Median price increased ten percent among condo sales from July to August to $187,000 but fell 19.6 percent from the year prior when the median condo sale closed at $232,500. The number of sales remained relatively stable through the summer months of July and August, up .8 percent in August, but fell 6.2 percent year to year.  Just more than a quarter of all condo sales (26.4 percent) were distressed sales. The non-distressed median sales price was $200,000, up slightly from July. 

“Though the supply is dropping, the condo market continues to have too much inventory,” said Leys. “Statistically speaking, there’s still an 11-month supply out there so it’s definitely a buyer’s market.  Those looking for a home without maintenance headaches may love the lifestyle a condo offers but if they’re going to act, they should do it now.”  Leys explained that the combination of the $8000 tax credit deadline this fall along with a supply of condos for sale that has been decreasing since April, makes this an opportune time to buy in the condo market.

Pending sales – those under contract but not yet sold – have increased among single family, multi-family and condominiums, and inventory has decreased in all three categories as well.  Both facts are evidence that the Rhode Island housing market has regained its footing and recovery is well underway.

 

Paul Leys

2009 REALTOR®
State President

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Single Family Sales
By Town

About the Rhode Island Association of REALTORS®

The Rhode Island Association of REALTORSĀ®, one of the largest trade organizations in Rhode Island with more than 7,000 members in approximately 900 offices, has been serving Rhode Islanders since 1948. Collectively, RI REALTORSĀ® transacted nearly $7.9 billion in residential real estate sales last year and nearly $8.1 billion in total transactions including rentals and commercial real estate. 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.

The Association is one of more than 1,400 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 1.4 million members involved in all aspects of the residential and commercial real estate industries and who subscribe to a strict Code of Ethics.

REALTOR® is a federally registered collective membership mark which identifies a real estate professional who is member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics.