Despite Slowing Sales in February, Data Indicate that RI's Housing Recovery Remains on Track
Warwick, RI… March 27, 2014 - Rhode Island single family home sales fell in February, down five percent from February 2013, and data showing a decline in sales under contract but not yet sold also indicates fewer sales in the weeks ahead. The statistics, released today by the Rhode Island Association of Realtors (RIAR), indicate a moderating market, in all likelihood affected by bad winter weather and worries about flood insurance increases mandated by legislation that was repealed by Congress this month. Realtors remain unfazed however, indicating that statistics indicate the moderation in the market will most likely be short-lived.
The decrease in sales, along with an increase in the supply of homes for sale has tipped the market in favor of buyers once again. There was an approximate 10 month supply of single family homes for sale in February, compared to a six month supply in December. A six month supply is considered a market balanced between seller and buyer demand according to industry experts.
February's decline was foretold by sinking pending sales for the past few months, but Realtors say the percentage of decline in pending sales is diminishing, indicating that a reversal in the sales activity slowdown lies ahead. The percentage of decrease in pending sales fell from eight percent in December, to seven percent in January to four percent in February. RIAR statistics, which are pulled from Multiple Listing Service's data of all Realtor-assisted sales, offer the only pending sales information available in the market. Such sales are considered the most current indicator of future sales.
The median price of Rhode Island single family home sales fell two percent in February, typical of a market in favor of buyers rather than sellers.
"This is the reality of the market. It ebbs and flows. We've had a rough winter and that was reflected in sales activity and prices. We've analyzed the numbers and feel confident that we'll continue to make headway in the housing recovery in the Spring," said Robert Martin, President of the Rhode Island Association of Realtors.
Martin's assertion is backed by the fact that the multi-family market showed strong gains in the number of sales and median price last month, up five and 45 percent respectfully. The investor driven, multi-family market, often sets the trends for the single family and condo markets.
Sales of condominiums followed the course of single family home sales last month, with sales activity down 12 percent and median price down four percent. The inventory of condos fell 14 percent last month, however, which should help to restore a balanced market in that sector.
"This lull won't last but it's giving buyers another window of opportunity to score a great deal. Prices are still good, interest rates are low and there's a number of properties to choose from. According to Trulia, the cost of owning a home is 38 percent cheaper than renting right now. If people are in the position to buy, this is a great time to do so," said Martin.
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