01:00 AM EDT on Tuesday, May 25, 2010
By Lisa Vernon-Sparks
Journal Staff Writer
WARWICK — For the sixth consecutive month, housing prices in Rhode Island rose, a trend that is expected to gain momentum over the next few months as the industry recovers from the recession, according to housing officials.
Median house prices increased by 12 percent last month, to $205,000 compared with $183,000 for the same month last year, according to a report released Tuesday by the Rhode Island Association of Realtors.
In March, the median home price was $193,500.
Single-family house sales increased by 26 percent, rising to 668 last month compared with 529 in April 2009, according to the Realtors.
The surge in sales indicates that many first-time buyers took advantage of an $8,000 federal tax credit, extended to April 30. The government also expanded the program, offering a $6,500 credit to people who already own a home.
Karl A. Martone, president of the Realtors Association, said extending the credit through April has had a “solid impact on the market.” This, combined with lower interest rates, renewed consumer confidence and the coming summer housing season, traditionally stronger, should mark the beginning of a sustained period for Rhode Island housing, he said.
“It’s stabilizing. Sales were off the chart for single-family homes and prices rose as well, probably in large part due to the credit that was available to move-up buyers,” Martone said Monday. “We’ve grown back in a healthy manner. We are fortunate enough to be entering the home-buying season. We had a good first quarter. The market is growing robustly. We really haven’t seen a chill in the market since the tax credit ended.”
The inventory of single-family homes listed for sale has increased steadily since the beginning of this year, and is higher for last month, at 5,696, than for April 2009 when it was 5,296. Available housing remains below its July 2008 peak of 6,750.
Trending along with increases in single-family sales and prices is growth in the condominium market. Sales in April were up by 47 percent, with 110 sold last month, compared with 75 units sold in April 2009. The median price of condominiums decreased, down 15 percent, from $198,000 to $168,000. Distressed sales, whether short sales, abandoned properties or foreclosures, made up 18 percent of all condo sales last month, compared with 24 percent of all condos sales in April 2009.
Sales on multifamily dwellings have slowed, down by 38 percent, but prices are rising to levels not seen since 2008, according to the Realtors’ report. The median price of multifamily properties in April was $123,750, compared with $69,900 during the same month in 2009.