Slight Drop in Rhode Island Housing Prices in 2007

Warwick, RI….Sales statistics released today by the Rhode Island Association of Realtors (RIAR) indicate a 2.65 percent decline in the 2007 median price of single family homes, falling from $282,500 in 2006 to $275,000 in 2007.  The decline follows prices which climbed at record rates during the first half of this decade, more than doubling from 2000 to 2005.  (The first year to experience a price decrease was 2006 which saw a .14 percent decline.)  The pace of sales slowed from 8313 single family home sales in 2006 to 7600 last year, an 8.6 percent decline.  Days on market increased to 88 from 79 in 2006.

“The correction that began in 2006 continued throughout 2007. The Federal Reserve's recent rate drops should help balance the market further,” said Robert Scaralia, President of the Rhode Island Association of Realtors. The Rhode Island Association of Realtors expects that more favorable interest rates will decrease housing inventory as homes placed on the market due to strained finances are refinanced. 

“Restoring consumer confidence is key and the good news in that respect is that the decline in sales volume has been more significant than the decrease in sales price.  What most homeowners lost in value recently, if anything, is minimal compared to what they've gained over the past few years,” commented Scaralia.

The pace of sales slowed most notably in the fourth quarter of 2007, down 19.11 percent from the same period the year prior.  The median price of single family homes during the fourth quarter fell 5.8 percent from $275,000 to $259,000.  (Median prices do not necessarily reflect values of similar properties year-to-year, but rather reflect the marketing mix -- price, size and type of homes -- on the market at that time.)

Despite a Federal Reserve study which shows that the average homeowner's net worth is 46 times that of a renter, potential home buyers are staying on the sidelines as they react to reports about the housing market and weakening economy.  According to Lawrence Yun, chief economist of the National Association of Realtors, there are opposing forces exerting themselves on the market.  Pent-up demand from the four million jobs added to the economy nationwide over the past two years of declining sales contrasts with pensive consumers waiting for additional signs of market stabilization. “There are more people with financial capacity now than in 2005, but many are trying to market-time their purchase.  As a result, the exact timing and the strength of a home sales recovery is a bit uncertain.  A meaningful recovery in existing-home sales could occur as early as this spring, or it may be further delayed toward late 2008,” said Yun.

Over the past 20 years, the Rhode Island median price of existing homes have increased more than six percent per year on average according to statistics from the Rhode Island Association of Realtors.  Though sales are slower by comparison to the early part of the decade, the National Association of Realtors projects 2007 home sales to be the fifth highest on record. (Final national sales data is not yet available.)

Local Markets at a Glance

The following provides a general summary of  local (city/town) sales data.  Local contacts are listed to provide interviews and commentary for each area.

Aquidneck Island: Newport, Portsmouth, Tiverton, Middletown, Jamestown, Little Compton
Contact:  Carol Hale, President, Newport County Board of Realtors 401-842-0845/ carol@carolhale.com

Newport and Jamestown saw healthy gains in prices and sales, up 4.93 in price and 7.3 percent in sales volume in Newport , and 35.42 percent in price and 3.3 percent in sales volume in Jamestown.  Little Compton saw a 40 percent increase in sales volume.

Metro and East Bay:  Barrington, Warren, Bristol, East Providence, Providence, East Side of Providence, North Providence, Johnston, Cranston
Contact:  Victoria Doran, President, Greater Providence Board of Realtors 401-431-6900/ Victoria.doran@nemoves.com

Sales volume and prices were down in most metro and East Bay towns. Barrington was the exception in terms of price, rising 3.63 percent.  Sales volume also increased year to year in Barrington .  The number of sales stayed the same in Bristol but declined in the remainder of the metro and East Bay markets.

Northern Rhode Island:  Lincoln , Cumberland , Woonsocket , Pawtucket , Central Falls , North Smithfield, Smithfield , Burrillville, Glocester, Foster, Scituate
Contact:  Patricia Robitaille, President, Northern Rhode Island Board of Realtors 401-769-7821/ patr@fontainerealestate.com

Prices were down in all but North Smithfield which rose year to year by 1.49 percent.   Sales volume was down significantly in Pawtucket and Central Falls (20.5 and 26.1 percent respectively.)

Washington County:  Exeter , Narragansett, Richmond , South Kingstown, North Kingstown, Charlestown, Westerly , New Shoreham, Hopkinton
Contact:  Dean de Tonnancourt, President, Kent-Washington Association of Realtors
401-785-1700/ dean@leadingyouhome.com

The volume of South County sales was healthy in 2007 in all but Hopkinton, North Kingstown and Westerly which experienced declining sales. Prices declined in Exeter, Richmond, Narragansett and North and South Kingstown, and rose in Hopkinton, Charlestown and Westerly .

Kent County:  Warwick , West Warwick, East Greenwich, West Greenwich, Coventry
Contact:  Dean de Tonnancourt, President, Kent-Washington Association of Realtors
401-785-1700/ dean@leadingyouhome.com

Prices and sales volume dropped in all Kent County towns with the exception of East Greenwich which saw a 12.9 percent increase in volume.  While West Warwick prices remained relatively steady (down 1.89 percent), the number of sales dropped by 21.5 percent, the largest drop of all Kent County towns.

About the Rhode Island Association of REALTORS®

The Rhode Island Association of REALTORS®, one of the largest trade organizations in Rhode Island with more than 5,000 members in nearly 1,000 offices, has been serving Rhode Islanders since 1948. Advocating for Rhode Island's property owners, the Rhode Island Association of REALTORS® provides a facility for professional development, research and exchange of information among its members and to the public and government for the purpose of preserving the free enterprise system and the right to own real property. Last year, RI Realtors transacted $6.9 billion in residential real estate sales and $7.1 billion in total sales and rentals including commercial transactions.

The Association is one of more than 1,500 boards and associations that comprise the National Association of REALTORS® (NAR). The National Association of Realtors®, “The Voice for Real Estate,” is America's largest trade association, representing over 1.5 million members involved in all aspects of the residential and commercial real estate industries and who subscribe to a strict Code of Ethics.