NEW: Rhode Island Housing Market Takes Off—RI Assoc. of Realtors
Friday, July 26, 2013
Signs of the housing slump seem to be a distant memory, according to statistics released today by the Rhode Island Association of Realtors. The single family home median price soared by 19 percent since June, 2012, to $240,000, marking the highest median sales price seen since July, 2008, before the housing downturn occurred. June also showed a 16 percent increase in the number of single family homes sold compared to a year ago, which contributed to a sharp decrease in the number of single family homes on the market. Single family home inventory dropped 11 percent from June, 2012 to June, 2013, arriving at the lowest number of June homes for sale since 2005 when prices were close to their peak.
More good news
Pending sales -homes under contract in June but not yet closed - also rose four percent, an indication of continued market strength. The statistics, released by the Rhode Island Association of Realtors (RIAR) today, also point to a sharp drop in distressed sales. Less than 17 percent of all single family homes sold last month sold through short sale or foreclosure, compared to nearly 23 percent 12 months earlier.
A banner June
"Typically June is the most active month for home sales but this year was exceptional. Consumers are finally realizing that we have seen the bottom of the market and they’re questioning how long interest rates will remain low," said Victoria Doran, RIAR President. "Activity is up, homes are moving and the distressed inventory is quickly diminishing." Doran also noted that for the first time since the housing downturn began, the pendulum has swung to a sellers' market. "We have just over a 5-month supply of homes for sale which indicates that buyer demand is greater than seller supply. That doesn’t mean that sellers can get sky-high prices now but homeowners are definitely regaining some of the equity that they lost during the downturn." Doran further explained that a six-month supply of homes for sale typically marks a market balanced between buyers and sellers.
With an 18 percent increase in median price, the condominium market is also thriving. The median price of all condominium sales in June was $209,000. Sales skyrocketed 35 percent and pending sales increased 14 percent. Distressed sales dropped from 21 percent of all sales in June, 2012 to 13 percent this year.
Even the multi-family market saw a double digit increase in median price. June’s median sales price of $138,000 reflected an 11 percent increase from the prior year. Sales have slowed however, dropping four percent, and pending sales also declined by 11 percent. Distressed sales – a portion of the market which attracted a flurry of sales activity from investors in past years – have fallen from 43 percent of total multi-family home sales in June, 2012 to 35 percent last month, causing activity in the multi-family market to moderate.
"Rhode Island has been making gains throughout the year and though interest rates are rising, we don't expect them to rise so quickly that they will derail the recovery," said Doran.
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