142 homes sell during 'hot' housing market

By John Howell
Posted 7/6/17

By JOHN HOWELL Warwick single-family home sales that consistently outpace every other municipality in the state did it again in the month of May, which, according to the Rhode Island Realtors Association, had more single-family home sales statewide than

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142 homes sell during 'hot' housing market

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Warwick single-family home sales that consistently outpace every other municipality in the state did it again in the month of May, which, according to the Rhode Island Realtors Association, had more single-family home sales statewide than any other month of May on record.

Statewide, the sales numbered 1,044, an increase of 42 from May last year. Warwick sales represented more than 13 percent of the total with 142 sales for the month, up 18 from last May.

But how can so many single-family homes be selling when the inventory is down?

Multiple Listing Service recorded 3,924 single-family homes on the market statewide in May. The total was 4,610 for May 2016.

Mark McHugh of Clear Mark Real Estate finds homeowners looking to move up in the market again. With prices rising, he said, people have the equity in their homes to make a move.

“People have the money,” he said.

As an indication of how hot the market is, McHugh said he recently sold two houses within 12 hours of being listed and another within a week. All went at the full price sought by the seller.

Donald Morash of Abbott Properties, who works largely in the commercial market, said he was looking to find a house for a client in Greenwood and was surprised by what he found.

“A year ago you couldn’t get $225,000 for that house and now it’s $300,000,” he said of a property he looked into. He said Greenwood remains especially attractive because of its proximity to the highway and central location in the state.

Morash said the “hot” residential market has created false expectations in the commercial market, with sellers thinking because single-family homes are in demand, commercial properties should be, too.

“It’s better but it’s not that hot,” Morash said of the commercial market. “You would think it [a strong residential market] would have an effect, but it doesn’t work that way.”

He points out that commercial sales hinge on a number of factors, including zoning of the property that can determine its uses, location of the property, traffic volume, as well as price and the size and condition of the property.

“Everything has to fit,” he said.

Not everything is a fit in the residential market either.

Both McHugh and Morash see the sweet spot for residential sales in Warwick in the range of the low $200,000 to $300,000. To the south in East Greenwich and North Kingstown prices run about $100,000 higher, which they felt is largely due to schools. They felt a factor depressing the Warwick market is the ongoing unsettlement of a Warwick teachers contract and history of differences between the union and the administration.

According to the RI Association of Realtors, supply of homes for sale continued its downward trend, falling 22 percent from a year earlier. With the exception of one month, the number of homes for sale has fallen each month since May 2015, causing prices to climb.

May’s median price of $250,000 represented a 4.6 percent increase from the prior May. May’s single-family home sales price was the second highest monthly price since July of 2008.

“We saw a short lull in activity, but that has certainly reversed,” Brenda L. Marchwicki, president of the Rhode Island Association of Realtors, said in a statement. “The only thing holding the market back right now is lack of inventory. On the flip side, that’s helping sellers, many of whom were unable to move during the recession years because of lost equity. Most homeowners are in a much better financial position to make a move now.”

Condominium sales were also up in May, an increase of 12.4 percent over May of 2016. A 6.7 percent drop in listings helped push the May median sales price to $205,000 from $199,900 12 months earlier.

While the single-family home and condominium markets saw solid growth in sales activity and median price, sales in the multi-family home market skyrocketed. Multi-family home sales rose 19.5 percent, the third consecutive month of double-digit growth, while their median sales price rose 10.6 percent to $199,000. The supply of multi-family properties for sale has fallen year-over-year for the past 24 months.

“A lack of options to choose from is making it difficult for buyers, particularly at the lower end of the price spectrum. On the plus side, interest rates are remaining low, which is helping to make homes more affordable,” said Marchwicki.

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