Wednesday, December 23, 2009 By Christine Dunn Journal Staff Writer
November saw a dramatic increase in the number of houses sold in Rhode Island — up 61.1 percent compared with November 2008, according to statistics compiled by the Rhode Island Association of Realtors.
Association president Karl Martone was unable to say how many of those sales involved people eager to cash in on the $8,000 first-time homebuyers’ tax credit, which had been set to expire on Nov. 30.
But “I think that has something to do with it,” Martone said.
U.S. home sales rose 7.4 percent in November, according to the National Association of Realtors, while in neighboring Massachusetts, the single-family sales spike mirrored that of Rhode Island, at about 60 percent.
In Rhode Island, the increase in sales volume was accompanied by a slight increase in the median house price, up 1.2 percent, to $205,000 from $202,500 in November 2008.
It was the first time since July of 2006 that the median house price in Rhode Island was up in a year-to-year comparison.
In real estate, year-to-year comparisons are considered more valuable than month-to-month changes, because the market is seasonal.
Many of the houses that sold in November would have been under contract before Nov. 6, the day President Obama signed a law extending and expanding the tax credit.
The Rhode Island Realtors’ group said prices varied greatly from town to town, with medians ranging from a high of $2.05 million in Little Compton to a low of $105,500 in Central Falls.
There was also great variance in sales volume by city and town. The number of house sales in Lincoln went up 600 percent, from 2 to 14; sales decreased by 75 percent in Exeter, from 4 to 1.
The number of condos sold in November increased 88 percent, but the median price dropped 11.9 percent, to $174,500.
The multifamily market experienced a 19.6-percent increase in sales volume and a 9.4-percent increase in median price.
Martone said low interest rates and the improving health of the overall market also contributed to the November sales jump.
“We’re recovering, and [the market] is healthy, and we hope that the rates stay where they are,” he said.
In another positive sign, the Realtors’ association reported that single-family inventory — the number of properties available for sale — fell 16.5 percent, and is at its lowest level since January 2006.
In addition, the distressed-sales share of the single-family and multifamily markets decreased.
For single-family houses, the number of short sales and foreclosures declined to 23 percent of sales, down from 36.9 percent in November 2008.
Distressed sales accounted for 18.3 percent of condo sales and 62 percent of multifamily sales, down from more than 80 percent.
“Home sales have been trending back up,” said Leonard Lardaro, a professor of economics at the University of Rhode Island.
“We’re still in a recession, but we’re in a typical recession, not a free-fall, like we were in a year ago,” he said.
“I wouldn’t say that happy days are here again,” Lardaro added. “It isn’t going straight up. The question is, where do we go from here.”