Sluggish Home Sales Reported For Q2

According to the Rhode Island Association of Realtors, the median price of a single family home dropped two percent in the second quarter of 2011, when compared to the same period last year. The current median price is $205,000, compared to $210,000 in the same quarter last year. Sales were down more than 20% year-over-year.

Unlike many cities and towns in Rhode Island, South Kingstown registered solid sales numbers for the quarter.

Sales in South Kingstown dropped nearly 8%, but median prices for single family homes remained steady at $291,000. Days on the market also had a dramatic drop of more than 21% from 126 to 99. There were no sales of multi family houses during the second quarter.

The median price of condominiums saw a 3.7% drop to $173,000
from $179,625 in 2011. The condominium market also saw a drop in sales, falling 14.4 percent from 2010.

The multi-family market also saw a sizeable reduction in sales, falling nearly 30% in the past year. On the bright side, the median price of a multi-family home held steady at $120,000.

In a press release, the Association points out that the news isn't that bad when the current quarter is compared to 2009. The problem is that sales figures from 2010 are skewed because of a federal tax credit used to boost the housing market.

Stephen Antoni, President of the Rhode Island Association of Realtors explained the effect of the tax credits on house prices.

“There’s no question that sales have fallen since the tax credit expired a year ago but we’re beginning to see them slowly creep back up again.  June closed out the quarter with the highest number of monthly sales in 12 months,” said Antoni.

Another reason for the depressed market is the difficulty some borrowers have getting a mortgage, which can have a ripple effect at all price levels.

“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,” said Antoni.

Condominiums also fared very well. Sales increased more than 45% during the quarter, and the median price rose almost 6% from $315,000 to $333,650. Days on the market fell nearly 21% from 117 to 93.