Housing Market in RI: Prices Stable and Activity Up
Friday, September 28, 2012
The data released by the Realtors also showed a 13% increase in sales activity, marking the 14th consecutive month of rising single family home sales.
"We've been seeing a strengthening market for some time now but August sales are evidence of a major turning point," said Jamie Moore, president of the Rhode Island Association of Realtors. "We may still experience a step or two backward in the months ahead but the forward momentum has clearly become more evident. The market is much stronger than it has been."
Foreclosure Sales Activities Drop
In addition, the percentage of sales transacted through foreclosure or short sale has fallen dramatically since the beginning of the year which has contributed greatly to the healthier market. Distressed single family sales accounted for 35 percent of all sales in January and dropped to 20 percent by August. In August, 2011, distressed sales accounted for 24 percent of all sales.
Another contributing factor in the market turnaround has been a reduction in the number of homes available for sale. Available inventory fell 17 percent from the prior year in August. It appears that the trend of decreasing inventory will continue as pending sales in August - those that are under contract but not yet closed - rose 25 percent from August, 2011. Pending sales are considered to be a key indicator of the current state of the market. There was a seven-month supply of single family homes available on the market in August. A six-month supply is considered a normal supply of inventory and indicates a market balanced between buyers and sellers.
The condo market is improving with rising median price and sales activity both up in August. The median condo price rose 7% to $203,000 and sales activity increased 5%.
"Reasonable prices and low interest rates are making home ownership extremely attractive. Rents are on the rise and many people are finding that owning is cheaper than renting," said Moore.
Multi-family sales statistics showed multi-family properties to be the only property type which experienced a decline in median price. The multi-family median price was down 19% from August, 2011 to $105,000, according to the Realtors.
"The multi-family median price rebounded significantly last year as investors entered the market once again, but it has subsided a bit in recent months. We should see prices begin to rise again with the depletion of excess inventory in the investor market," said Moore.
"Overall, we're thrilled to see hard evidence that the market is recovering. Great pricing and low interest rates have really helped turn things around. Job availability and overly tight lending standards are the main constraints on the market right now. Still, even with those conditions, we’re definitely making headway," said Moore.
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