State-Wide MLS 2015 Year In Review

A SOLID YEAR OF RECOVERY SETS UP FUTURE GROWTH IN RHODE ISLAND’S HOUSING MARKET

While housing sales began to improve in 2012, 2015 appeared to be the year which put the real estate downturn solidly in Rhode Island’s rear view mirror. With single family home sales increasing year-after-year, every month for the past year, and the median price of those sales rising in all but two months of the past 13, the faulty footing of Rhode Island’s housing market seems to be a thing of the past. A consistent trend of improving market conditions appears to be the new normal.

“We’ve seen continual improvement in our housing market this year,” commented Arthur Yatsko, 2016 president of the Rhode Island Association of Realtors. “Sales activity has been strong and though prices are still down from their peak, most homeowners have regained most, if not all, of any equity lost during the housing downturn. A better economic outlook seems to have reinvigorated home sales and continued low interest rates have helped keep home ownership affordable.”

And though news of a likely hike in interest rates could threaten to quell sales in 2016, one industry expert has issued exciting news for Rhode Island homeowners looking to sell their property in the coming year. A new report issued by realtor. com places the Providence-Warwick area in the number one spot on its list of hottest real estate markets in 2016.

Jonathan Smoke, chief economist for realtor.com, predicts that the 2016 housing market will experience solid but moderate growth throughout most of the country, with sales and prices rising by three percent. By comparison, Smoke expects to see Rhode Island sales activity and median price in the single family home market rise by as much as ten percent.

Markets on realtor.com’s top ten growth list can thank growing household formation, a better job market and/or large numbers of millennials, young gen-X’ers and retirees, all of which are demographic groups that are expected to drive the market in 2016.

According to Smoke, some of the areas which are expected to see better than average growth, are just now seeing signs of recovery and better economic conditions forecasted for next year. He also indicated that top growth markets like Providence, could get a boost from spillover sales from nearby markets in demand. The Rhode Island housing market for example, could benefit from the pricier Boston market, which was identified as one of the top markets for growth in 2015. Boston also made realtor.com’s overall top ten list for 2016, and ranks number one in the 65-74 age group, or those looking to retire, downsize or relocate.

While it’s hard to know for sure whether Rhode Island home sales will be a standout in 2016, Yatsko believes that Rhode Island is not poised for another housing bubble. “Ten years ago, Rhode Island was a leader in price appreciation but those hikes in price were too much, too fast. We don’t have the same scenario now. Consumers today are well aware of the perils of over reaching for a home and tighter lending standards have curtailed bad loans. As a result, our housing market is more solid. I’m not sure if an improving economy helped our real estate market or if an improving housing market helped boost our economy, but either way, it’s encouraging,” he said.

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