Beige Book: R.I. home sales increased in February

ACCORDING TO THE BEIGE BOOK REPORT released by the Federal Reserve Bank of Boston, Rhode Island was one of four New England states that saw sales of single-family homes increase year over year in February. / BLOOMBERG FILE PHOTO/BRENT LEWIN
ACCORDING TO THE BEIGE BOOK REPORT released by the Federal Reserve Bank of Boston, Rhode Island was one of four New England states that saw sales of single-family homes increase year over year in February. / BLOOMBERG FILE PHOTO/BRENT LEWIN

BOSTON – Rhode Island was one of four New England states that saw sales of single-family homes increase year over year in February, according to the Federal Reserve’s latest Beige Book report on the economy.
Even though sales increased, residential real estate markets throughout New England were slowed by “severe winter weather,” the report said. However, that slowness is expected to be temporary.
The other states with increases in single-family home sales were Maine, Connecticut and Vermont. Sales declined in Massachusetts and New Hampshire, however. In Massachusetts, sales have declined year-over-year in eight of the last 10 months, the report said. Contacts in Massachusetts attribute the sales decline to “tight and declining inventories,” as the housing supply in the Greater Boston area is at the lowest level in more than 12 years.
Median sale prices also increased in Rhode Island, Maine, Massachusetts and New Hampshire. Vermont saw no change and Connecticut saw prices decrease.
Condominium sales increased in February in New Hampshire, Connecticut and Vermont, but declined in Rhode Island, Massachusetts and Maine.
Condo median sales prices rose in Massachusetts, New Hampshire, Maine and Vermont while falling in Connecticut and Rhode Island.
As in the single-family home market, inventory shortages are blamed for declining sales and increasing prices in Massachusetts condominium markets, where only 2.3 months of supply are available. Condominium inventories decreased in all six New England states.
“Contacts expect the spring market to be strong, although starting later this year owing to the harsh weather. Respondents anticipate that new listings will rise after owners repair winter damage and express hope that low interest rates continue to bring buyers to the market,” the report said.
Commercial real estate is continuing to improve across most New England markets. On the commercial real estate side, rents in Greater Boston increased an average of 7.9 percent over the year on the strength of high-demand submarkets such as Cambridge and the Seaport District.
“Strong sales activity for commercial properties in Boston continues to be fueled by foreign institutional investors, many of which are increasing their allocations to real estate. Office construction increased modestly in the Boston area and includes a small, but increasing, amount of speculative activity,” the report said.
The report said that overall, business activity is continuing to expand in New England, but contacts are not quite as upbeat this round.
“With a few exceptions, retailers, manufacturers and selected business services firms report increases in revenue compared with a year earlier. For retail and manufacturing, the increases are fairly modest, while most consulting and advertising contacts cite moderate to strong results. … Aside from ongoing energy price increases associated with limited natural gas capacity in the region and the effects of the strong dollar, contacts say non-labor costs and prices are steady. Only a few firms experiencing strong demand are doing any significant hiring; one retailer is raising its entry-level wages,” the report said.

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