NEW: RI Housing Prices on the Rise
Wednesday, January 23, 2013
Despite the impact Hurricane Sandy had on the quarter as a whole, single family home sales skyrocketed and prices showed marked improvement in the fourth quarter of last year as sales increased by 25 percent from 2011 and the median price rose five percent from $185,000 to $195,000.
"Prices finally began some upward momentum this fall,” said Victoria Doran, president of RIAR. “Falling inventory put pressure on prices. At the end of December, Rhode Island had a six month supply of single family homes on the market so we've finally achieved a balance market. It's a great starting point for the New Year.”
Condominium sales also had a strong quarter as the median price of condos increased 24 percent to $192,250 and the number of sales increased 27 percent overall. According to RIAR, there was a 7.6 month supply of condos on the market at the end of the fourth quarter.
The median price of multi-family home sales also rose at the end of last year, jumping 10 percent to $120,000. This was despite a decrease of three percent in sales activity during the quarter.
Foreclosure and short sales have also fallen in Rhode Island, which has helped boost the median price of homes in all three categories. All told, “distressed” sales of single family home sales fell nine percent from October through December, 21 percent for condominium sales and 26 percent for multi-family homes.
"We saw a lot of movement last fall, particularly in the higher price brackets," Doran said. "It appears that some may have been making a move in advance of anticipated tax code changes. As it turns out, the housing market was relatively unscathed during the fiscal cliff negotiations – only the highest earners face a reduction in their deductions.”
Doran warns, though, that there is still a lot of uncertainty in the market.
“Everything is up for grabs in the next few months though, as Congress tries to tackle the deficit,” she said. “It's critically important that people let their Congressmen know that changes to the mortgage interest deduction or anything else that takes away key benefits of home ownership for that matter, could be extremely detrimental to the housing recovery."
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