Real Estate in the '818

Recently, at a friend’s party, a couple had asked which child was ours, where do we live (the usual chit chat which occurs while watching 10 3-year-olds run amuck around a pool) and lastly what I did for a living. When I responded that I am in real estate, I was immediately greeted with a gasp, a hand on my shoulder, and a reassurance that “everything will be okay," like I had just mentioned that my dog had left me for the neighbor's because they serve wet food and not the boring dry stuff. I had to wonder, what is the perception of our real estate market as compared to actual numbers?

The Rhode Island Association of Realtors released their statistics this week for month-to-month comparisons, along with the quarterly comparison from last year. Included in this comparison was the latest spin as to why this is occurring on a state level. Most will tell you that due to the run up in sales that were initiated during the tax credit of 2010, a sharp decline was expected right afterwards. I would agree with this, as we were essentially compressing a year’s worth of buyers into a 6-month period, thus creating a vortex of doom on Aug. 1, 2010, when all the buyers had completed their purchase.Okay, fine, I get it - but what about this year? Why are we in a free fall (or so it seems) when it comes to home sales?  Because I live in East Greenwich, work in East Greenwich and this is not Rhode Island.patch.com, let's take a look at our local market and what has been happening year to date.

In the first eight months of this year, home sales in EG were down 10 percent, in the same amount of time (@ 88 days) and our average sale price has dipped 4 percent compared to 2010. Time for mass paranoia, conspiracy theories and complete anarchy? Perhaps when it comes to the Weather Channel and their coverage of Irene, but when we split the sales into two categories, there are some interesting points. There were 14 "bank owned" and "short sale" home sales in the first three quarters of 2010, but there have only been 8 so far this year.

The numbers of traditional sales are about the same this year compared to 2010 (73 vs.75). While the traditional sale numbers also did see a decline of 4.5 percent in the average sale price, we have had an increase in both the price per square foot averages and the sale price as compared to the town’s assessments. I believe that these numbers will increase over the next few months as many sales in late June / July actually were selling above the town's assessed value (insert gasp here)!

So what do these numbers mean for you as a seller? As a buyer? If you are considering the sale of your home, know that the traditional timing of the market has disappeared. People get transferred in January, there can be fewer homes on the market in October (reducing the absorption rate) and when the seller of another home is trying to purchase in EG from another location, they could be just now finally selling their home after a summer of constant showings.

For the buyers, the interest rates are phenomenal right now; in fact they are at the lowest point in over 50 years! Combine this with increased inventory and pricing comparable to 2003 levels, and there are some good options out there. Make sure you have someone guiding the way between the good deals and the “what are they thinking???!!” ones.

Next week, let’s talk about getting your house ready and why I don’t need to see the velvet painting of your late grandmother.