Last-minute sales surge inspires hope
January 24, 2012
While prices and sales declined for all of 2011, an end-of-year jump in sales leads Realtors to believe that the light at the end of the tunnel may become visible in 2012
A 10-percent jump in the number of houses sold in the fourth quarter was a positive end to another rough year for Rhode Island’s housing market, as foreclosures continued to drag median prices down in 2011.
Median house prices fell nearly 12 percent in the fourth quarter, to $185,000, and 7 percent overall in 2011, to $195,000, thanks to the continuing stream of foreclosures and short sales. The number of these “distressed” house sales was up slightly in 2011.
There were 1,715 houses sold in Rhode Island in the fourth quarter, up 159 from the 1,556 sold in the fourth quarter of 2010. But 103 of the 159 additional sales in 2011 were “distressed,” either foreclosures or short sales. In short sales, properties are sold for less than the outstanding loan balance.
States have been negotiating with the nation’s largest mortgage lenders about foreclosure-related irregularities. If a settlement is reached, it “may unleash more foreclosures,” Retsinas added, and that would exert more downward pressure on home prices.
“There’s not going to be a robust recovery,” he said.
But Realtors hoped that the late-year surge in the number of sales was a signal of the beginning of the end of the housing crisis.
“Sales increased in the second half of the year without the aid of any homebuyer tax incentives,” Jamie Moore, 2012 president of the state Realtors’ association, said in a prepared statement. “That’s what we want to see.”
“I think 2012 is the bottom,” said Richard Godfrey, executive director of Rhode Island Housing. “At some point, prices are going to start to go up.”
Godfrey said rents are high in Rhode Island, and many people who are renting now can afford to buy a home. He said Rhode Island is “poised to see a housing recovery as soon as people start feeling secure about their jobs.”
Rhode Island’s median house price for all of 2011 was $195,000, down 7 percent from the 2010 median of $210,000. Despite the 10-percent bump in the number of houses sold in the fourth quarter, house sales were down 2 percent overall in 2011.
Of the 6,701 house sales in Rhode Island in 2011, about 27 percent were distressed.
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