October 20, 2014
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Sales up, prices down for homes; 325 vacant Warwick properties

Rhode Island’s single-family home sales are up roughly 18 percent from this time last year, though the median price of homes is down more than 6 percent.

Jamie Moore, president of the Rhode Island Association of Realtors, said the state has seen a consecutive 13-month increase in units sold, though the prices of homes have not shown the same upward trend.

“Prices have still been relatively low,” she said, but coupled with great interest rates, homes in the $200,000 and less range are moving through the pipeline steadily.

“People are starting to realize: how long are these interest rates going to stay this good?” she said.

Moore said as the demand for homes in this price range increases – with the supply now going down – the prices of homes will begin to take an upward turn.

Statewide numbers of distressed properties (short sales or foreclosures) were up nearly 15 percent from last year, rising from 497 to 570. However, sales of distressed properties decreased from 27.5 percent in 2011 to just under 27 percent this year; distressed sales also decreased throughout the second quarter. The first quarter data showed distressed sales making up 34 percent of the market.

Multi-family home sales were about the same this year as last year, with the median price up $500 from 2011’s $120,000. 2012 saw six-percent fewer distressed properties. The percent of distressed sales of multi-family homes was down to 47-percent from last year’s 50-percent, and down also from the 2012 first quarter percentage of 55.

Moore said multi-family home sales have been looking up, a trend she said is due to investors’ ability to pay off mortgages with rental incomes.

Statewide condo sales were up 11 percent from last year. The median price took a $3,000 dip.

In Warwick, single-family home sales rose by nearly 12 percent. Moore said Warwick showed an increase of home sales in June, with 95 sales in 2012 compared to 78 in 2011. Though sales were up, the median price dipped by 6 percent, from $155,000 to $145,000.

“It’s the good with the bad,” said Moore.

But Moore said the number of sales is more important than the sale price.

“We want to see that,” she said of the increase in single-family home sales. “House sales are what generate economy and other industries. People say for every house that sells five jobs are created.”

Those jobs are through home repair, additions, remodeling, furnishing and more.

“It’s a great benefit to the number of units selling,” she said.

Warwick showed no change in the number of distressed properties from last year, and Moore said she hopes it stays that way, though she said there could be something else coming down the pike that they don’t know about.

“We don’t have a crystal ball,” she said.

Though numbers of distressed properties are stagnating, Ted Sarno, Director of the Building Department for Warwick, said the volume of abandoned homes is taxing city resources. According to Sarno, there are 325 vacant homes in Warwick, and in many cases the city does not know who owns them. Sarno said a large portion is bank-owned, but finding out which bank is the issue. Many, he said, have been languishing for “years and years.”

Sarno said after the second minimum housing violation is issued to the property, the case will be sent to the court system. In the last week, Sarno said they have issued about five violations for “life safety issues” to properties with pools alone.

“It’s overwhelming for our staff to respond to all of this,” he said.

This quarter showed multi-family home sales stayed roughly the same in Warwick, while the median price of multi-family homes decreased from $181,198 to $175,000. Warwick had two distressed properties this year, while there were none recorded last year.

Moore said condos are lagging behind this year, and data showed Warwick condo sales dipped 10 percent with a nearly 25-percent decrease in median price. Distressed properties stayed steady, with seven in 2011 and eight this year.

Though most cities and towns showed both good and bad trends, Moore is staying “cautiously optimistic.”

“It’s slow but steady,” Moore said of the trends reported in the second quarter. “We’re going in the right direction.”

Moore said if interest rates stay low, a balance between supply and demand in the market is established, and people become more confident in the jobs market, the real estate industry will make a steady comeback.

(With reports from John Howell)


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