RIAR "Cautiously Optimistic" About 2010 Price Gains

RIAR "Cautiously Optimistic" About 2010 Price Gains

The Rhode Island Association of Realtors (RIAR) released home statistics today showing price gains in 2010, reversing a downward trend that began in 2005.

The median price of single family homes sold last year in Rhode Island was $210,000, up five percent from 2009's median price of $199,400. The median price represents the midpoint of all sales, with half selling for more and half selling for less. Median price does not reflect the value of the same property over time, but rather the mix (size and type) of properties sold. Rhode Island defied the trend of falling prices seen throughout much of the country.

Reasons Behind the Rise

RIAR theorized the rise in median price is likely owed to a decline in distressed sales last year, as well as more reasonable lending standards in the jumbo mortgage market and an added tax credit incentive for move up buyers during the tax credit extension. The number of distressed sales among single family homes – foreclosures and short sales – dropped 31 percent from 2009.

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"Overall, we're pleased that we seem to be headed in the right direction," commented Stephen Antoni, RIAR president. "Median price has increased every month since November 2009 and sales activity is beginning to regain its footing since beginning to fall in the summer following the expiration of the tax credit," he said.

Against the National Trend

Median prices have been decreasing countrywide due to increased distressed sales. Rhode Island is now finding the opposite to be true. One of the first to enter the foreclosure crisis, Rhode Island now appears to be ahead of the curve in the recovery. The number of distressed sales, which typically sell in the lower price ranges, are decreasing throughout the state , while sales of higher priced properties selling through conventional means are increasing, leading to higher median prices. "Cautiously optimistic” is how Antoni best describes it. “Affordable prices, low interest rates, rising equity and decreasing distressed sales…they're all good signs and we seem to be once again, ahead of the national curve. We didn't get into this overnight so it's taking a while to regain our momentum, but I think we're definitely on the right track,” he said. “Still, the key to total recovery will be getting rid of the oversupply and continuing to deplete our distressed inventory. It's also important to remember that though it's a buyer's market, when you sell, if you're buying something else, you're going to get a great deal on the other end.”