Inventory Reaches Multi-Year Low

WARWICK, RI – Statistics released by the Rhode Island Association of Realtors show that the single family home median sales price rose eight percent in December from 12 months earlier, to $200,000. The number of sales however, fell by 2 percent.  Realtors pointed to the government shutdown in October, which they say played a role in delaying December closings, as one reason for the sales decline.  The lowest number of homes for sale since 2005 also helped to restrain sales activity.  Rhode Island had a 5.8-month supply of homes on the market at the end of the year, swinging the pendulum just slightly in favor of sellers.  A six-month supply is considered balanced between supply and demand.

In the investor driven multi-family market, the median sales price rose 25 percent to $150,000, the highest median price since May, 2008.  Like the single family market however, sales activity decreased, down 19 percent from the previous December.

Sales activity and median price were down in the condominium market in December, with activity slowing by four percent and median price down eight percent to $183,250.

Pending sales, or sales under contract but not yet sold, were down eight percent in the single family home market, one percent for the condo market, and 10 percent among multi-family homes.  The decrease in pending sales, which are considered the best indicator of sales activity in the coming months, suggest that lull in home sales is likely in the beginning months of 2014.  Pent up home seller demand however, is likely to add properties to the supply for sale by the spring selling season.

Increases in median price were driven by decreases in foreclosure and short sales in all three categories, which typically occur in the lower end of the market.  Median price is not a reflection of the value of the same home over time, but rather, reflects the mix in size and price of homes on the market, with half selling for more and half selling for less.

The Rhode Island Association of Realtors will release fourth quarter and 2013 year-end statistics on Thursday, January 30th.

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