Warwick, R.I. — December 20, 2017 – According to the latest report from RI Realtors, Rhode Island’s single-family home sales activity remained stable in November, rising .8 percent from November 2016. The median price of those sales rose 5.7 percent to $259,000.
With 3154 single-family homes listed for sale in the State-Wide Multiple Listing Service last month, inventory remained 8.3 percent below that of November 2016. The lack of inventory played a part in a drop in pending sales. Homes under contract in November fell 19 percent from the prior year.
The condominium market saw the same trends, increasing in both sales activity and median price by 6.1 and 1.8 percent respectively. Inventory dropped 5.9 percent while condominiums under contract decreased 9.4 percent from November of last year.
Multifamily Sales Activity Reverses Trend
Conversely, the multifamily sector saw its first slowdown in sales activity all year. One hundred and forty-six (146) condos sold in R.I. last month, compared to 162 in November 2016, a 9.9 percent decline. A 26.9 percent spike in the median sales price is reflective of a 17.7 percent drop in inventory and a 59.4 percent drop in foreclosure and short sales. At $232,150, November’s median sales price was the highest in the multifamily market in more than a decade. Despite the shortage of inventory, pending sales were relatively stable, declining just 1.6 percent from a year earlier.
Even With Important Improvements to Tax Code, New Bill Still Includes Deterrents to Homeownership
“Growth in Rhode Island’s housing market has been impressive this year, surpassing even last year’s record-breaking numbers. Even with the uncertainty caused by pending tax reform changes last month, residential sales continued to rise year to year, though at a more moderate rate. Unfortunately, sales activity did slowdown on the investor side and will likely continue to be impacted by some of the tax reform measures passed by Congress today,” said Joseph Luca, President of the Rhode Island Association of Realtors.
“Lowering the cap on the mortgage interest deduction for primary homes and the loss in most deductions for home equity interest run counter to the interests of property owners. Thankfully, it looks like the capital gains exemption for real property remained intact and though subject to limits, the deduction on mortgage interest on second homes was preserved. Equally important, particularly to the investor market, the final bill excludes real property from the repeal of section 1031 like-kind exchanges,” Luca commented.
New data from the National Association of Realtors®’ fourth quarter Housing Opportunities and Market Experience (HOME) survey indicate that changes to the mortgage interest and property tax deductions undercut the incentive of owning a home and would have a detrimental effect on many homeowners’ financial situation and future desire to move. As a result, 2018 may see tempered sales activity and a slowdown in price growth, explained Luca.