Warwick, RI, November 20, 2017….The median price of single-family home sales rose to $264,950 last month from $235,000 in October 2016. Sales data released today by RI Realtors also reveal an 8.6 percent increase in closing activity compared to a year earlier.
Despite increased closing activity in October, diminishing inventory caused pending sales to fall by 18.2 percent, an indication that the rate of sales will likely slow in the months ahead. The supply of homes for sale dropped by 8.7 percent from October 2016 to October 2017.
“We saw a slight slowdown in single-family home sales in September, but sales rebounded again in October. Though 2016 broke records, we’ve seen even more sales this year than last from January 1st through October 31st,” said Joseph Luca, president of the Rhode Island Association of Realtors.
Activity skyrocketed last month in the condo market when sales rose 44.4 percent from 12 months earlier. The median price of those sales however, fell 8.3 percent to $199,900. Pending sales also fell 8.9 percent and listings dropped by 7.2 percent.
Multifamily property sales were 7.9 percent higher than in October 2016 and the median sales price of those sales climbed sharply, rising 21.9 percent to $219,450. Sales under contract but not yet complete fell 14.9 percent while inventory decreased by 13.1 percent from the previous October.
The number of days a listing stayed on the market fell significantly in all housing sectors last month due to the shrinking supply of listed properties. Days on market decreased from 73 in October 2016 to 59 this October in the single-family home market, from 95 to 67 in the condominium market, and from 60 to 27 in the multifamily home market.
“With these tight inventory conditions, buyers need to be able to act quickly. There’s no such thing as being too prepared in a market like this,” advised Luca. He added, “If people have been thinking about selling, this is a great time. Prices are up, interest rates are still low for potential buyers and there’s little competition out there. Plus, there’s no telling what might happen to the housing market next year with pending tax reforms brewing in Washington. Strike while the iron is hot.”
Luca cautioned that the passage of the House version of tax reform legislation last week puts consumers one step closer to losing important homeowner benefits and critical commercial real estate investment incentives. Though the Senate version maintains the current $1 million cap on the deduction for mortgage interest, it repeals all state and local tax deductions and reduces tax credits for rehabilitating historic properties. Both are particularly troublesome for residents of high-tax states with a prevalence of older housing stock like Rhode Island.