Warwick, RI, January 25, 2017 — Rhode Island’s home sales hit new levels in 2016 with 11,038 single-family homes sold, 12.4 percent more than 2015. Today, the Rhode Island Association of Realtors reported that Rhode Island Realtors transacted 1013 more single-family home sales than the previous record reached in 2004, leaving no doubt that 2016 was the year when Rhode Island’s housing market firmly reestablished its footing.
In addition to the meteoric rise in activity, the median price of single family home sales rose 6.6 percent to $239,900 according to Realtor statistics. Though this represents a 15.2 percent lag behind the highest annual median price on record, realized at the peak of the housing boom, the vast majority of homeowners have regained the home equity lost during the housing downturn.
“As our economy has improved, so too has our housing market. There was activity at all ends of the market in 2016, from first-time homes to properties that sold in the millions. Sales started off strong in the beginning of the year and remained robust throughout. Even November’s controversial election didn’t quell activity,” commented Brenda L. Marchwicki, president of the Rhode Island Association of Realtors.
The condominium market saw the strongest gain in activity, with sales rising 15.6 percent from the previous year, thanks in part to legislation enacted last year which tempered overly stringent financing rules for condos. The median price of condo sales remained relatively stable, falling $100 from the prior year to $199,900.
Sales of multifamily homes increased 7.9 percent year-over-year, while the median sales prices of those sales rose from $168,000 in 2015 to $182,900 in 2016, an 8.9 percent increase.
It should be noted that median price does not represent appreciation or depreciation in value of all homes, but rather the mid-point of all sales at which half of the properties sold for more and half sold for less. Median price is an indicator of the type of properties selling on the market at a given time, starter home versus “move-up” or luxury homes, for example. The volume of distressed properties on the market also affects median price.
The percentage of foreclosure and short sales, which fell among all property types in 2016, was highest among multifamily home sales at 16 percent of total sales and lowest in the condo sector, comprising just 7.7 percent of all condominium sales.
A Strong End to the Year
Fourth quarter sales maintained the strong momentum seen earlier in the year. Nearly 2800 (2791) single-family homes sold, an 8.5 percent increase from the same quarter in 2015.
The median sales price of single-family homes sold from October through December matched the year end price of $239,900, also an increase of 6.6 percent from the prior year.
In the condominium market, closing activity increased 20.9 percent while median sales price rose eight percent to $210,500.
The multifamily market also saw strong fourth quarter gains, with sales rising 14.3 percent and median price increasing 9.9 percent.
The Realtor Association pointed to pent up demand, low interest rates, rising consumer confidence and the improved economy for last year’s strong showing. New mortgage options also enabled more buyers to enter the market.
“Rhode Island’s housing market has a solid footing going into 2017. We are seeing diminished inventory but listing activity will pick up going into the spring selling season. Though interest rates have risen recently, we don’t expect to see a significant hike this year so as long as we see more property listings in the next few months, we should be in good shape for the year ahead,” said Marchwicki.
Statistics reported by the Rhode Island Association of Realtors represent all Realtor-assisted sales transacted through the State-Wide Multiple Listing Service.