Business
Price slump finally hits real estate in R.I.
07:09 AM EST on Tuesday, November 14, 2006
The nationwide slump in the housing market has finally reached Rhode Island, where the median price of single-family houses and condominiums fell last quarter for the first time in six years.
The median sale price of single-family houses in the third quarter was $270,000, down 1.8 percent compared with $275,000 in the same quarter last year, according to the The Warren Group, a Boston-based real estate market research company.
The number of houses sold dropped sharply to 2,635, down 15.2 percent from 3,107 in the third quarter of last year, The Warren Group said.
The sale price of condos also fell, as did the number of units sold. The median price was $220,000, down 2.2 percent from $225,000 in the third quarter of 2005.
There were 1,945 sales of condo units, down 8.6 percent from last year.
The Warren Group is the publisher of The Commercial Record, Banker & Tradesman and other trade magazines.
The third-quarter figures are a reversal from the first two quarters, according to The Warren Group. Prices of single-family houses rose by 4 percent in the first quarter, while condos shot up by 21.3 percent. In the second quarter, prices for houses rose 1.1 percent and prices for condos increased 9.9 percent.
“Rhode Island is starting to feel the impact of the same softness that’s been affecting the Connecticut and Massachusetts markets most of this year,” said Timothy Warren Jr., chief executive officer of The Warren Group.
“After 10 years of unabated growth, the market is undergoing a correction,” he said. “While it’s tough to project how deep this correction will go and how long it will last, we still see it more as a soft landing than the type of crash the market experienced back in the early 1990s.”
The decline in median house prices has been more dramatic elsewhere. Last month, the U.S. Commerce Department reported that the median price for a new house sold in the U.S. in September was $217,100, a drop of 9.7 percent from September 2005, the Associated Press reported. That was the lowest median price since September 2004 and the sharpest year-over-year decline since December 1970, the AP said.
In Massachusetts, the median price of a single-family house in September declined 5.3 percent, to $341,000, according to the Massachusetts Association of Realtors. Sales were down from September of last year by nearly 24 percent, the lowest sales volume in that state since September 1996.
Analysts have said that the decline was due to rising mortgage rates, high energy costs and a higher number of new houses on the market.
The Rhode Island Association of Realtors also tracks real estate transfers, based on sales that occur through its Multiple Listing Service. The group no longer releases price or sales data on a monthly basis; third-quarter numbers are scheduled to be released Nov. 21.
In the second quarter, the median price of existing single-family houses sold was unchanged at $285,000, the association reported. The number of sales fell by 9.6 percent.
The Warren Group said its figures are based on public filings in all the state’s cities and towns. It includes all transfers of property, including for-sale-by-owner purchases, the company said.
Within Rhode Island, some areas fared better than others. For example, the median price of single-family houses remained steady in Washington and Bristol counties, while it dropped in Newport, Kent and Providence counties.
Condo sales appeared to remain strong in parts of the state. The number of units sold rose 24.3 percent in Bristol County, and 8.4 percent in Providence County, The Warren Group said.
“Rhode Island is starting to feel the impact of the same softness that’s been affecting the Connecticut and Massachusetts markets most of this year.”
>chief executive officer of The Warren Group.
“Rhode Island is starting to feel the impact of the same softness that’s been affecting the Connecticut and Massachusetts markets most of this year.”
>chief executive officer of The Warren Group.
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