Arthur Chapman

It seems the market in RI is showing some signs of improvement. While supply is critically high and overall prices will continue to drop in the next 12 to 24 months, price changes, pendings and showing activity is up. Coupled with this data is the slowdown in new listings.

I compile data every day on all status changes in the state from the State Wide MLS, www.statewidemls.com. I count the number of status changes and then average by the number of days in the month. This data is very helpful in understanding overall trends. It is not a barometer for your individual neighborhood or price point, but gives us a mile high view of the market and market trends.

Here's an interesting chart illustrating the number of new listings per day, pendings per day and price changes per day which clearly shows the dramatic rise in price changes per day along with the steady growth of pendings per day.

Please let me know your thoughts and comments.

The local real estate market is staying strong this fall with home sales and pending contracts still above average. The Rhode Island real estate market saw an increase of single family sales of over 22% for the month of August 2011 versus 2010.

There were 160 total distressed single family sales, an increase of 33% from 2010. Short sales as a percentage of overall pending sales have been up dramatically over the past couple of years. Currently 13% of all pending sales in the state of RI are short sales. This is down from a high of 18% in November 2010.

An increase in short sales, while obviously not great for a market, is actually much better than the short sale going to foreclosure. So when short sales increase, and overall pending and sales increase, does this mean that we are inching closer to stability? It's all about inventory and we have far too much inventory to even hope for stability when looking at the entire state.

However, when you start to look closer at specific price points, neighborhoods and property types, there is reason to think that some areas will start to see a slowdown in price depreciation and perhaps, just perhaps, some price stability in the next 12 months.

It's important to know your specific market along with the regional trends in order to make the best decisions.

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Quotes from the recent RIAR Association President on the 2nd Quarter statistics for the RI real estate market,

"Sales of single family homes dropped 20 percent compared to the same time period in 2010 and 10 percent from the second quarter of 2009."

“Still, extremely tight lending standards remain a problem for the housing market. It’s a chain reaction. If first time home buyers can’t qualify for a home, sales of lower priced homes are delayed. And, if those homeowners can’t sell their home, they can’t move up to another price bracket,” he said.

I have no idea what he's talking about. We haven't had one problem with financing in a long time. Our company has booked or closed over 160 sides this year. No financing issues that I am aware of, other than appraisal, but even that isn't much of a problem any more. I guess financing is different in different areas of the state? Really?

Statewide sales of single family homes dropped 20 percent in RI from 2010. That's accurate. But overall sales in Providence County dropped 27%, Kent County is down 17%. Since these two counties are the major population centers, these counties will skew the entire state. But if you look at the counties individually, it paints a much different story.

Newport County is down only 9% YTD, Bristol County is down only 6% YTD. Washington County at the end of June had a total of 682 sales. In 2010 there were 683.

In order to fully understand a market, you have to look at it from many angles. Don't believe the negative hype.

Recently the RI Association of Realtors came out with their statistics on the state of the market here in Lil Rhody. The overall sales volume is down significantly in our state and the association and it's President focused on the unfair comparison to last year due to the First Time Buyers Tax Credit program that pushed a lot of demand forward to April/May of 2010. True, very true, the tax credit did push a lot of demand foward, not only in our state, but in the entire country.

I heard the President of RIAR on the radio last week explaining this difference in the statistics and also complaining on how hard it is for buyers to get financing in today's market and how the slow down in sales has pushed many agents into getting second jobs. I strongly disagree with this statement and feel this is exactly the PR we DON'T need!!

In fact, if you peel back the onion a bit, several counties in our state are enjoying year over year INCREASE or STABILIZED numbers in sales volume - not DECREASES! It's all about where there is JOB CREATION!!

Newport County, RI, encompassing the cities and towns of Newport, Middletown, Portsmouth, Jamestown and Little Compton, RI saw a total of 90 sales in 2010. 2011 had 91.

Bristol County, RI (Barrington, Bristol & Warren, RI) from January 1, 2011 to May 31, 2011 saw a total sales volume of 156 sales - same period in 2010 was 158.

Washington County (Narragansett, North Kingstown, South Kingstown, Exeter, Richmond, Charlestown, Hopkington and Westerly) had 499 sales in the first five months of 2010. In 2011 we have seen 509.

The real issue is demographics and jobs. Metropolitan Providence area is not creating jobs, just yet. We will see significant job creation in Providence next year and the relocation of I-195 will open up significant acreage for development and job creation. But for now, the major population center in RI is experiencing a reduction in sales volume - thereby increasing supply and depressing prices. This will continue in this area for a while - 12 to 24 months - at least.

However, the sales volumes in Newport, Bristol and Washington Counties illustrate how we as professionals need to live by the famous words, "Like politics, all real estate is local".

Moving forward......