PROVIDENCE, R.I. — Though the momentum slowed in June, a new report shows that house sales in Rhode Island increased by 15 percent in the second quarter of 2016, and the median sales price was $240,000, a jump of nearly 7 percent compared with April, May and June 2015.
With 2,975 sales statewide in the second quarter, “more single family homes sold … than in any other quarter since record-keeping began in 1986,” the Rhode Island Association of Realtors reported Thursday. There were 1,906 house sales in the first quarter of 2016, which beat a record set in 2005, when there were 1,825 first-quarter sales.
Realtors say most of the sales activity is concentrated at the entry level of the local markets, while houses priced above the medians in their communities are taking longer to sell. Despite a long run of low interest rates, they said, a lack of listings priced affordably for first-time buyers is holding back more robust activity.
In its June report, released on Tuesday, the association reported that the number of houses listed for sale in Rhode Island was down 14 percent, and this lack of inventory could affect future sales.
Cash-strapped millennials, shut out of the market for years because of economic conditions after the 2008 housing crash, including a grim job market and daunting college debt, are fueling the “pent-up demand” on display today, according to Guy Glennon, a team leader at Re/Max Professionals’ Hill Harbor Group, based in East Greenwich.
Overall, houses in good condition that are priced under $300,000 are selling briskly, because that is the price point that is most attainable for young couples buying their first homes, Glennon said. But “once you get over 300, aside from Barrington, the East Side, East Greenwich, Stonington [Connecticut], North Kingstown … it slows down.”
Glennon added that most first-time buyers have very little cash to put down, and none left after a purchase to do major repairs, so they avoid fixer-uppers.
“We have tons of [first-time buyers] wandering around, and the inventory just isn’t big enough,” said Dory Ann Skemp, an agent with Coldwell Banker Residential Brokerage. Skemp said there has been a lot of interest in a bungalow she recently listed for $199,900 in Warwick, including one buyer who wants to live in Bristol but can’t find a suitable home there.
“Buyers absolutely don’t want to do any work” on houses they buy, added Timothy O’Keefe, who manages Skemp’s office in Barrington. “It’s a funny market.”
After a lot of activity in April and May, “it has quieted down, but it is an inventory issue, I believe,” he said.
In the condominium market, sales were up 16 percent in the second quarter, but the median price fell 7 percent, to $200,000. Multifamily home sales increased by close to 5 percent, while the median price jumped 9 percent, to $180,000.
The Realtors’ Association also noted that there was a 1.7-percent upturn in distressed single-family house sales in the second quarter, and “though the increase is marginal, it represents the first quarterly rise in distressed sales since the last quarter of 2012.”
Association president Arthur Yatsko noted that “programs geared toward removing foreclosure and short sale inventory are having an effect on sales,” including a Rhode Island Housing program that “offers up to $20,000 in down payment assistance for first-time buyers who buy distressed properties in 10 Rhode Island towns.”
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