Rhode Island Home Sales Rise in October

As expected,    we continue to show brisk sales as people are taking advantage of great mortgage rates and the first time buyer’s tax credit. The Rhode Island Association of Realtors reported last Wednesday that sales of single family homes rose 29 % in October in year-over-year comparisons, but as we work through the distressed listings, the median sales price continued to decline.  So, though the news is encouraging, we are still working our way out of the doldrums of last year. Here are the highlights of the RIAR report. The Single Family Home market is starting to stabilize:

• 787 Single Family homes sold, compared with 621 last year.
• The median sales price was $200,000, down from $215,000 during October 2008.
• 22% of sales were distressed properties, which is approximately the difference between this and last year sales.
• The median price of sales without short sales or foreclosures was $230,000.

The multifamily home market fell slightly in year-over-year comparisons:

• 187 sales in October 2009, down from 193 a year earlier, a 3.1% drop.
• The median price fell from $116,000 to $110,000.
• 18.6 % of those were distressed sales.

Condos had a 35% increase in sales in October compared with the last year:

• 111 sold compared with 82 a year earlier.
• The median price fell 29 % to $161,000 from $227,500.
• 21 % of the sales were distressed, again most of the difference from last year.

With Mortgage rates at historic lows, and lower prices, home affordability conditions are the best on record since 1970. The expanded tax credit should  drive the spring market; helping the move-up buyer as well as the first-time buyer. Since potential buyers have until April 30 to have a contract in place, we should continue to see robust sales through  Spring. This Week’s Real Estate Insight: By the time the credit expires,  we  should have worked though enough inventory that prices stabilize or even increase slightly, then  the market could  stabilize  because buyers won’t be  paralyzed by  worry about further decline in home values.