Warwick, RI, March 22, 2016… Rhode Island’s housing market showed strong year-over-year gains in February with the number of single family homes sold rising 24 percent from February, 2015. The median sales price increased nearly 12 percent to $217,300. The statistics released by the Rhode Island Association of Realtors today told a story of a robust market that shows signs of continuing well into spring.
Pending sales, considered by industry experts to be the most accurate indicator of the market in the coming months, rose 19 percent from 12 months earlier. With last year’s harsh weather hitting New England at the end of January, 2015’s first quarter housing market slowed considerably. This year’s housing indicators portray a more vibrant market with increased sales, higher prices and fewer foreclosure and short sales.
“We’re pleased with what we’re seeing. Home owners are gaining equity but despite the price appreciation, homes are still affordable for buyers. Interest rates haven’t risen since the Federal Reserve announced that they would hike rates in December and it recently announced that it has no current plans to raise the benchmark rate again. That means that the costs associated with financing a home will continue to be among the lowest that buyers have ever seen,” commented Arthur Yatsko, president of the Rhode Island Association of Realtors.
While financing conditions are favorable, Rhode Island’s housing market is starting to experience diminishing inventory. Though the number of single family homes for sale rose two percent from 12 months earlier, the quickening pace of sales is beginning to outstrip supply. Rhode Island is approaching a seller’s market with a 4.7-month supply of homes for sale.
The number of multi-family sales also soared, rising 31 percent from 12 months earlier while the median sales price rose nearly ten percent to $165,000. Pending sales remained relatively stable from February, 2015, rising just one percent. An analysis of Realtor pending and closed sales data indicates the likelihood that the investor-driven multi-family property market has been heavily driven by cash sales in recent months. Twenty-two percent of Rhode Island’s multi-family home sales were distressed sales last month, falling from 30 percent during the same month of the prior year.
Even the fluctuating condominium market experienced a significant upsurge. The number of condo sales in February grew by 57 percent and the median sales price grew by five percent. Sales under contract increased by 10 percent and the number of foreclosure and short sales fell by 50 percent
“People are entering the market in droves. There are a number of new programs for first-time home buyers and even many who went through a distressed sale during the recession are able to get back into home ownership at this point. The fact of the matter is that thousands of Rhode Islanders are realizing that owning a home may actually be less expensive than renting right now,” commented Yatsko.