WARWICK – Through June, single-family home sales “have moderated as expected,” Cecile Cohen, president of the Rhode Island Association of Realtors, said today in an RIAR report that discounts “seemingly inconsistent trends” in the local housing market.
“There are more homes on the market, but those that are priced right are still selling in a matter of months,” Cohen said. “We feel that as long as the economy remains stable and interest rates remain low, the market will continue to correct itself.”
The state’s inventory of unsold single-family homes increased sharply, rising 38 percent to 6,735 in the last week of June from 4,865 at the same time last year. And projected closings fell 9.1 percent, to 1,174 in May 2007 from 1,291 in May 2006.
Meanwhile, the average time on the market increased 12.3 percent for houses sold in March through May – to 91 days, from 81 in the year-ago period – as their median price fell only 1.4 percent to $275,000.
Why were prices so stable? Two of the three factors historically required for a precipitous decline in prices just don’t exist, Cohen said. Typically, she said, prices plunge when the housing supply is high, unemployment is high and the economy is week.
At present, oversupply is the only one of those factors affecting the Rhode Island real estate market, Cohen said, though consumer confidence also has played a role.
In analyzing trends in median prices, the Realtors said, it is important to understand that median sales price reflects the mix of properties on the market at the time and does not indicate value fluctuations in comparable properties year to year.
“It’s important that people realize that real estate is extremely local,” Cohen added. “We can see a buyers’ market in one town and a sellers’ market in another. In fact, even neighborhoods in the same town can vary greatly.
“One hundred and seven less homes sold this March through May than last. If you think about the hundreds of thousands of homes in Rhode Island” – 671,240 dwelling units, according to the U.S. Census Bureau – “that puts the decrease in sales in context,” she said.
The Rhode Island Association of Realtors has nearly 5,000 member Realtors, who last year were involved in nearly 12,000 transactions totaling $3.95 billion. The RIAR is one of more than 1,800 local boards and associations that comprise the nation’s largest trade association, the National Association of Realtors. To learn more, visit www.riliving.com.
