Could the economy be improving…finally?
That’s one take on March statistics that puts the median sale price of a single-family home at $205,000, the highest since the end of the first quarter in 2008. Even though Warwick statistics were slightly lower than this time last year, professionals in the field say that does not indicate a trend and the market is strong throughout the state.
The data released by the Rhode Island Association of Realtors indicates the median price of a single-family home rose 8 percent since March 2013, the median price of condominium sales rose 10 percent, and the price for multi-family homes rose 19 percent to $149,000. More good news on the condominium front is a sales volume increase of 5 percent and pending sales up 7 percent, indicating a strong future.
“We’re seeing exactly what we expected to see,” said Robert Martin, president of Rhode Island Association of Realtors, in a press release. “The harsh winter weather and fears of skyrocketing flood insurance rates put a slight damper on sales activity in the beginning of the year, but those problems are behind us for the most part. This is turning out to be the best spring selling season we’ve seen in a long time.”
The data comes from Realtor-assisted sales input into the State-Wide Multiple Listing System.
On the other hand, the number of sales of multi-family homes did drop, as well as a 13 percent drop in pending sales, which could lead to lower sales numbers in the months to come. Also, single-family homes sales activity slowed, down 0.3 percent from March 2013, but did bounce back from the February lull. Pending sales fell 4 percent.
In a phone interview yesterday, Martin again spoke as to how well the Rhode Island market is doing.
“Right now we’re expecting a very strong spring. That’s been indicated by the increased activity. It seems everyone we’re speaking to is seeing a resurgence,” said Martin.
He said the real estate market had plateaued slightly over the winter months, following a sustained period of growth. But the warm weather has brought people out, and activity has picked up once again.
“It’s been a difficult winter,” said Martin. “In my experience working in the Northeast, nothing kills sales like snow.”
Martin says cold weather, a slight rise in interest rates and fear of the unknown regarding flood insurance may all have been factors in the plateau of the real estate market this winter, but that is not a bad thing.
“In my office, everyone is busy again. Nice weather has changed the mindset,” said Martin. “People are getting in the game while things are very good.”
In his initial statement regarding the March numbers, Martin said fears on rising flood insurance has passed, something that may not be the case in Warwick. He elaborated on that, saying the work done by Congress to delay dramatic increases for the immediate future has eased fears, moving sales back to normal. He also admits he works in northern Rhode Island, where flood insurance costs are not as prominent an issue.
“The fact that they’ve resolved the issue for at least the foreseeable future and they’re looking to redo FEMA maps, it alleviated the fears of some people,” said Martin. “It’s more of a cautious review when someone’s looking to purchase.”
In Warwick, March numbers were down slightly from March 2013. The number of sales went from 83 in March 2013 to 78 in March 2014, and distressed properties increased from 19 to 20. The median sales price decreased 0.15 percent, from $167,000 in March 2013 to $166,750 last month.
Some good news in Warwick is that the average days on the market dropped 15.63 percent, from 96 in March 2013 to 81 for March 2014.
Martin said not to see the decreases in the number of sales for Warwick as a trend because it is only a decrease of five houses. That drop could occur for a number of reasons such as delayed closings or the product available on the market at the time. He prefers to look at overall trends as opposed to city-specific data.
Warwick real estate professionals agree the numbers don’t represent what they are seeing.
“The market is very strong,” said Philip Slocum of Slocum Realty. “We’re seeing strong and meaningful appreciation.”
Slocum said he was not terribly surprised by the overall increases across the state based on his experiences in the area; in fact, he said he was encouraged by the numbers and by what he has seen.
“I don’t think it’s specific to Warwick. There’s good pent-up demand. When good listings come on the market, they’re getting a lot of attention,” he said, highlighting Warwick’s decrease in days on market. “Days on market are very strong. The demand is there and people are seeing listings very quickly.”
Slocum said the lower numbers in other areas may be due to the fact that there are less and less foreclosure sales happening, encouraging people to look at the quality of the transaction.
Overall, Slocum sees Rhode Island’s real estate market in a solid recovery with people ready to move. He expects the positive trend to continue over the next few months.
Hugh Fisher of H.A. Fisher Homes, a Warwick-based company that builds and sells properties, said the real estate business in Warwick and throughout the state is “phenomenal.”
“The general market has been building up,” said Fisher, pointing out that prices have moved up, equity has come back and people are able to make the move into their first homes or move up. “It’s better for everyone,” he said.
As proof, Fisher shared that in less than a year he sold 23 condominiums in a new development he built; the final building only has two units left. He also built and sold nine single-family homes off of Warwick Avenue. He has sold to a combination of first-time buyers, young couples and those looking to move back to Warwick.
“There’s a pent-up demand,” said Fisher. “We build a lot of homes for people looking to move up.”
Fisher said over the past few years people may have been encouraged to purchase properties that had been foreclosed on with the intention to “flip” the house. But then they discovered there were more problems than anticipated and ended up spending more than if they bought a newer house. Now he says the market to buy new houses is back and seeing a lot of activity.
“Our market turned for the better,” said Fisher. “It moves very, very slowly, but it moves.”
Looking forward, Martin predicts the spring and summer will remain positive due to pent-up demand, a good real estate environment and banks beginning to be more lenient with some credit requirements. “All economic factors have remained very good,” he said. “It’s still a good time to buy in the affordability index; within Rhode Island, more people can afford houses than they could a few years ago.”
RI Realtors will release first quarter sales data on May 1.