Single-family Home Sales Increase 10 Percent in Third Quarter But Market Shows Signs of Moderation in September
Warwick, R.I. — October 26, 2016 – The Rhode Island Association of Realtors reported that Rhode Island single-family home sales rose 10.2 percent in the third quarter compared to July through September of 2015, breaking all quarterly records for Realtor-assisted sales. The median price of those sales increased to $245,000, a 4.5 percent gain.
“This year has been a banner year for home sales. The uptick in the economy, low interest rates, improved job growth and enhanced consumer confidence, have brought buyers back into the market. First-time and move-up buyers, and even those whose credit was hurt during the recession, are now able and willing to invest in real estate again,” commented Arthur Yatsko, 2016 President of the Rhode Island Association of Realtors.
Single-family home sales ended the quarter with a year-over-year increase in September sales activity of 9.9 percent and an increase in median price of .43 percent to $231,000. Sales under contract but not yet closed dropped .5 percent, the first decrease in pending sales since February, 2015. There was a 4.9-month supply of single-family homes for sale in September, giving sellers a slight advantage. Industry experts consider a six-month supply of homes balanced between supply and demand.
“If you have been thinking about selling, this is a fantastic time to do so. When you put your home on the market, you will have less competition and if priced properly, your home should sell quickly. And, when you go to buy, you will be able to take advantage of incredibly low interest rates which will help you afford more of the amenities you want in your next home. That’s a really important point for those torn between moving or refinancing,” said Yatsko.
Condo sales rise following ease in lending requirements
Condominium sales also increased in the third quarter, rising 5.8 percent since the third quarter of 2015. The median price of those sales however, fell 2.5 percent to $195,000, from $200,000 last year. The drop in the median price, which does not necessarily reflect a change in value of a particular property over time, but rather, a change in the type of properties sold, could have resulted from reforms to FHA lending restrictions passed this summer. As a result, some first-time buyers were able to take advantage of new financing rules to purchase their first home.
In September, condominium sales in Rhode Island increased 7.4 percent compared to September of 2015. September’s median sales price fell 7.5 percent to $185,000. Pending sales increased 16.2 percent, indicating robust closing activity in the months ahead. The quarter ended with a 5.9-month supply of condominiums available for sale.
“There are some great condo options out there. Condominium lending restrictions have eased and there are many great choices. If you’re looking for a nearly maintenance free first home option, the condo market could be pretty attractive right now,” said Yatsko.
Sales drop, median price rises in multifamily home market
The multifamily home market was the only sector of the market that saw a drop in sales. Closing activity decreased 3.6 percent compared to last year. Median price, however, increased significantly, rising 8.5 percent to $189,900.
The quarter closed in September with Rhode Island multifamily home sales falling 10.9 percent and median price increasing 2.9 percent. Though closed transactions decreased, pending sales increased 20.6 percent, foretelling a strong end to the year in the investor-driven sector. There was a 5.2-month supply of multifamily properties on the market in September.