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R.I. home sales plunge

01:00 AM EDT on Wednesday, October 3, 2007

By Lynn Arditi

Journal Staff Writer

Rhode Island residential real-estate sales fell sharply in August and prices inched down, according to a report released yesterday by a Boston research firm, The Warren Group.

Sales of single-family houses declined 11.7 percent from August of last year, while condo sales fell 14.5 percent, the report said.

The median price of a single-family house in August dipped 5.6 percent, to $255,000, compared with $270,000 in August of last year. The median price of a condo in August ticked up nearly 2.3 percent, to $225,000, but remained down almost 1 percent since January. (The Warren Group data includes sales by owners as well as those made through real-estate agents.)

Timothy C. Warren Jr., the chief executive officer of The Warren Group, said one factor that “could be contributing to lower median prices” in Rhode Island is the spike in foreclosures.

Foreclosure auction notices in The Providence Journal spiked 133 percent in August, to 331, according to The Warren Group. There were 276 notices in July and 285 in June.

“People at risk of losing their homes may decide to sell quickly,” Warren said, “and accept a lower price to avoid foreclosure.”

Prices of single-family houses in Rhode Island have declined for 12 of the past 13 months, excluding March, when prices were flat, The Warren Group reported.

In Providence County, the median price of a single-family house in August declined 7.2 percent, to $231,000, the report said. So far this year, the median price in Providence County is down, on average, 4.6 percent, to $240,000.

In Washington County, the median price of a single-family house in August declined about 11 percent, to $320,000; so far this year, the median price is down, on average, about 5 percent, to $333,000.

Meanwhile, condo prices have plunged in Bristol County, where the median price so far this year is down, on average, 29.4 percent, to $274,000, the report said.

By contrast, the median price of a condo in Washington County so far this year rose, on average, 4.4 percent, to $271,500, the report said. (It is worth noting that the smaller the number of sales, the bigger the price fluctuations may be and the less reliable the data.)

The Rhode Island Association of Realtors, which tracks sales through real-estate agents, reported that the number of buyers who signed purchase-and-sales agreements in August declined 9.5 percent, and average selling time during the summer stretched to 82 days.

The inventory of unsold single-family houses also climbed to about a 10-month supply as of the last week in August, according to the Statewide Multiple Listing Service.

The Realtors reported that the statewide median price of single-family houses during June, July and August fell 3.2 percent, to $283,570. The Realtors only track sales through real-estate agents, which may account for the somewhat higher median price. For example, The Warren Group, which also tracks sales by owners, reported the median single-family house price in August was $255,000. (No comparable price data for August was available from the Realtors.)

Real-estate agent sales account for almost 90 percent of total sales, said the association’s spokeswoman, Kerry Park. Sales by owners or “arms-length transactions” are not reported by the Realtors.

“If Mrs. Smith wants to sell her home to her granddaughter for $1, that would be included” by The Warren Group, said Park, “so it’s going to bring the median price down.”

The Realtors reported that the median price for condos during the second quarter declined about 6 percent, to $222,000. The third-quarter report from the Realtors will not be available until next month .

larditi@projo.com

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