Stability in RI Housing Market Continues in Third Quarter

WARWICK, RI – Rhode Island’s single family home sales changed little in the third quarter from a year earlier according to sales statistics released by the Rhode Island Association of Realtors today. Sales activity dropped just 1.9 percent with 52 fewer homes selling from July through September of this year compared to the third quarter of 2013.  Median price declined $3000 to $215,000, or 1.4 percent.

Warwick led the state with the most single family home sales activity with 323 transactions. With an increase of 58 percent, Foster saw the largest percentage gain in the number of sales and the biggest increase in median price with a rise of 79 percent. Though median price does not reflect a rise in the value of specific homes, it does indicate a shift in the type and price of homes selling in a particular market. A lower median price generally assumes a predominance of distressed or lower priced, first-time homebuyer sales while a higher median price indicates movement in the higher priced move-up sector.

“Rhode Island’s housing market held its own in the third quarter and we’re seeing a number of positive signs for continued housing recovery. Interest rates reached an annual low last week and there were some significant advances made in loosening the onerous restrictions in lending resulting from the financial crisis,” said Robert Martin, 2014 president of the Rhode Island Association of Realtors.  Martin alluded to a decision announced by financial regulators last week to ease lending requirements stemming from the 2010 banking reform bill enacted after the financial crisis.  Part of the new Qualified Residential Mortgage rule includes elimination of the 20 and 30 percent down payment requirements included in earlier versions of the rule, which should open up options for otherwise creditworthy homebuyers currently shut out of the market.

Rhode Island’s condominium market saw a 14 percent decrease in activity in the third quarter with the median sales price virtually unchanged at $199,900, $450 higher than the prior year.  Though activity in the investor-driven multi-family market slowed seven percent, the median price rose to $155,000, an 11 percent increase.

The Rhode Island Association of Realtors released September statistics along with the third quarter numbers which showed a strong surge in single family home sales at the end of the quarter.  After seven months of sales activity which declined from the prior year, September showed a 10 percent gain.  Pending sales, or those under contract but not yet closed, also rose in August and September, after dropping year to year since August, 2013.

There was a six-month supply of single family homes for sale at the end of the third quarter, considered by industry experts to be a market balanced between supply and demand,.  The condominium and multi-family markets tipped slightly in favor of buyers with a seven-month supply of inventory.

“The stock market may be fluctuating but Rhode Island’s housing market now seems to be cemented in stability.  As investment options go, housing is once again showing itself as a great long term investment,” said Martin.

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