There’s no place like home and, given the numbers, no Rhode Island community outdoes Warwick when it comes to the sale of single-family homes.
That’s been true even during a down economy.
Third quarter sales of single-family homes in Warwick totaled 271, which is up 42 from the same period last year, according to the latest Rhode Island Association of Realtors report. That 18 percent increase is viewed as a sign the market is improving, although it has a way to go before returning to the days when people out-bid one another to get the property they wanted. Statewide single-family sales rose 15 percent from the third quarter last year, with a total of 2,235 single-family homes sold.
“It’s not all doom and gloom,” says Remax 5 Star realtor Lisa Russo. Russo has been selling real estate for 14 years. So far this year, she has sold 30 houses and currently has another six or seven under contract.
Conditions, she said, are far better than 18 months ago – the worst she can recall in her career.
Jamie Moore, president of the Rhode Island Realtors Association, sees it that way, too.
“More inventory is selling every month, even though median prices are lagging,” she said Tuesday. She said there is a seven-month supply of homes on the market, a statistic she would like to see drop to six months. “It’s positive. It’s going in the right direction.”
The median price of all single-family homes sold from July through September was $197,500 while those, which sold through conventional means only (not through foreclosure or short sale), was $230,000.
The median price in Warwick for the quarter was $148,000, a drop of 9 percent from last year’s $162,800. Median price reflects the midpoint of sales, with half of the properties selling below the median and half selling for more. It does not represent an increase or decrease in the same property over time.
City Tax Assessor and Collector Kenneth Mallette was not surprised by the decline in the median price. He’s generally seeing lower property values throughout the city as part of the statistical revaluation currently under way.
Collectively, he expects property values to be 10 to 15 percent lower than what they were in 2009, with a greater drop in residential than commercial values.
Russo sees Warwick prices as part of the reason the city outpaces other communities when it comes to home sales.
“Warwick is always a great place,” she said, “People get more bang for the buck.” Generally she finds houses under $200,000 sell quickly while those in the range of $500,000, like prices on Warwick Neck, take longer.
Moore is finding the higher end homes in the range of $750,000 are selling more frequently “because the money is so cheap.”
But while mortgage interest rates are low, both Moore and Russo say strict bank regulations are slowing the market and frustrating buyers and sellers.
“It’s a lot more tough to get through the system now,” said Russo. “It’s not easy to get a mortgage.” While she says greater credit controls would have helped avert the housing bubble and the eventual purging of the system through foreclosures and bankruptcies, the pendulum has swung too far the other way.
“It’s gotten a little too crazy,” she said. “We need to relax a little more.”
Moore and Russo are seeing a slowing of foreclosures, with banks more receptive to allowing delinquent mortgage holders to stay in the property and accept a short sale. Russo said banks are finally realizing that they save more in a short sale than in pursuing foreclosures.
Mallette has also seen a reduction in foreclosures and an increase in short sales.
“The banks are hedging. They don’t want to foreclose and then get thrown out of court,” he said.
Moore said increasing rents are also driving the market. She said people are realizing that, with low interest rates, they can afford to own a home for close to what they are paying in rent.
Yet, she finds there is a level of insecurity that is dampening the market.
“The only factor that is keeping them from buying is job security,” she said.
And she is finding more buyers to be multiple generations, meaning that while houses may not have in-law accommodations, families of multiple generations are living together.
According to the National Association of Realtors, housing affordability conditions are forecast to remain favorable through next year, with the 30-year fixed-rate mortgage staying near record lows for the balance of this year but gradually rising to 4 percent in the second half of 2013.
Traditionally, said Moore, the market cools off between Thanksgiving and the Super Bowl.
“But I hope that’s not going to be the case this year,” she said.
In addition to single-family home sales, Warwick was second only to Providence in condominium sales for the third quarter. Twenty-three condos sold for a median price of $114,000 in the city compared to 31 in Providence at a median price of $215,000.
Mallette agreed the market looks brighter.
“There’s more activity now. The market is starting to pick up … We’re seeing a little up-tick, not a big one.”