NATICK, Mass. – Single-family home sales in Rhode Island saw 10.7 percent growth in 2013, according to Re/Max of New England, and thanks to the improving health of the residential real estate market, the median price for a single-family home during the year increased as well, by 7.4 percent to $206,870. The real estate brokerage cautioned, however, that improving consumer confidence, expected increases in interest rates and a continuing drop in inventory available for sale would likely slow the residential market into the second half of 2014.
The Re/Max 2014 Housing Forecast noted that despite a persistently high unemployment rate (tied for highest in the nation in November, at 9 percent), Rhode Island’s housing market put in a strong 2013 showing. In addition to the 10.7 percent increase in single-family home sales for the year, condominium sales increased 32.5 percent (the largest year-over-year gain in New England), and multifamily home sales increased 2.1 percent.
Similarly, the 7.4 percent increase in median sale price for single-family homes was complemented by a 17 percent increase in the prices paid for condos (also the highest recorded in New England), with a median of $191,559, and a 6.9 percent gain to $128,327 for multifamily homes.
Former president of the Rhode Island Association of Realtors, Karl Martone, a Re/Max Realtor, said in the report that “2013 was absolutely gangbusters,” thanks in large part to “very low inventory and a wealth of buyers who are in the market trying to find a home and beat the interest rate rise.”
Martone expects “to see a more balanced market in 2014. Key factors that could affect the industry include new flood insurance laws, interest rates and [new rules for] qualified mortgages,” as well as a continued slow pace in the luxury market, despite the odd transactions, such as the recent purchase of a Newport mansion by Alex and Ani CEO Giovanni Feroce for $6.8 million and the $17.75 million purchase by pop star Taylor Swift of an 11,000-square-foot home in Westerly’s tony Watch Hill neighborhood.
On a national level, the report quoted Steve Harney, president and founder of Keeping Current Matters, a real estate tracking organization, who said that “the market really came back and became more normalized” in 2013.
“Inventory was at five to six months and prices shot up across the nation,” he said. “This will level off in 2014, however, and I don’t think we’ll be looking at double-digit appreciation.”
National Association of Realtors Chief Economist Lawrence Yun concurred, saying that tighter lending standards, increases in interest rates and shrinking inventory would constrict activity.
Massachusetts experienced strong growth in home sales and prices last year as well, although in general, not as much as in the Ocean State. Single-family home sales increased 8.8 percent over 2012, while condo transactions increased 11.9 percent and multifamily homes saw a 4.2 percent gain. The median price for a single-family home increased 8.8 percent to $313,109 across the state (no county-by-county breakdown was available), while condos saw a 5.7 percent rise to $290,574 and multifamily homes experienced a 15.9 percent increase to $273,474.