PAST REALTY CHECK COLUMNS

June 2017

REALTY CHECK

Condomania

Plummeted. Sky-rocketed. I see these words in a lot in articles I read.  What I frequently find is that one reporter’s plummeting house sales, or sky-rocketing housing starts, is this reader’s blip.  Must every negative change in a politician or reporter’s world be deemed a crisis?  Must every positive change be a miraculous recovery?  Is every aberration a melodrama?

Now that I have that pet peeve out of the way, let me tell you that condominium sales in Washington County in 2017 have been volcanic, paroxysmal, fulminative, yes, even sky-rocketing. Or, to be a little more precise, unit sales from the beginning of this year to the last day in May are running 32% over 2016 sales, and 59% over the same period in 2015.  In contrast, single family home unit sales in Washington County rose 2.8% over last year and 19% over 2015.

The rise in condo sales occurred across most price levels. The number of units sold this year between $200,000-299,999 rose by 83% over last year.  There is a 40% increase for condos selling between $300,000-399,999.  From $400,000-499,999, it is a 50% increase.  The biggest gain has been with condos selling between $500,000-999,999, which more than doubled over last year.  As a quick reference point, in 2008 a total of 2 condos sold for more than $500,000 in the first five months of the year.  So far, this year there are 22 sales above $500,000.

A review of where sales have taken place shows that Narragansett with a year over year increase from 17 to 32 and South Kingstown, which jumped from 10 to 21, have had the biggest increases. As has been true for nine of the last ten years, Westerly has had the most sales this year with 36 units changing hands during the first five months of the year.  That compares to 31 last year and 26 the year before for the same period.

Many potential condo buyers get hung up on the monthly fees associations charge. They perceive those fees as being high.  Some of that perception comes from not understanding what the fees are used for beyond mowing the grass and plowing the streets.  In general, a condo association is responsible for maintaining the common areas of a project.  Depending upon the association, those fees could cover maintaining tennis courts, swimming pools, exterior lighting, driveways, and arbors.  In most Rhode Island associations, it is the association and not the individual owner that is responsible for maintaining the exterior of the buildings including roof repair or replacement, re-siding, painting, and gutter maintenance.  Associations hold insurance coverage on the common elements of the community, even flood insurance.   Monthly fees may look more reasonable after potential homeowners, who are considering buying a condo, figure out their own lawn, snow, driveway, roof, re-siding, and insurance costs.

I reviewed the 2017 condo sales and using the MLS listing sheets figured four measurements for units sold in more than fifty different condo associations. Those measurements were the annual combined cost of condo fees and real estate taxes, the monthly cost of fees and taxes, the cost of fees and taxes per square foot of above ground finished living space, and, as a percentage, the fee/tax  cost compared to the selling price per square foot.  The first measurements are pretty obvious.  They are absolute measures of cost.  The third and, especially, the fourth can be seen as a measure of relative value.

For an example of the difference between absolute and relative, within my sample there were 9 units sold in associations in four different South County towns that had a combination of fees plus taxes that exceeded $10,000 a year.

The highest fee/tax cost for a condo was cost was in Westerly where a unit in Ocean House Residences had costs of $28,778. Another Westerly unit, one in Winnapaug Cottages, cost $13,804 in annual fees and taxes.  In South Kingstown a unit in Shadow Farm had $13,359 in combined costs and one at Matunuck Breakers came in at $11,834.  A condo in 101 Ocean Road in Narragansett had annual fees plus taxes of $14,816 while one in Surfside cost $13,736.  Another Narragansett condo, a unit in Water’s Edge, cost $11,257 in combined fees.  In North Kingstown, a Quidnessett condo was listed as having $15,748 in fees and one in Oceanwoods hit $10,301.

Are those costs high? For the Ocean House unit fees averaged $33.08 a square foot of living space.  At Matunuck Beakers, the number was $25.95 a square foot.  The Water’s Edge combined costs were $8.98 a square foot.  The Shadow Farm condo was $8.17. Three condos– Surfside, 101 Ocean Road, and Oceanwoods—had costs that fell between $6-7.00 a square foot in combined fees/taxes.  The Quidnessett and Winnapaug Cottage units cost, $5.71 and $5.58 respectively.

But, are those costs high? The Ocean House condo which had the highest annual combined costs and the highest costs per square foot fell in the middle of the sample when fees/taxes per square foot is compared to selling price per square foot.  From my perspective, selling price per square foot is a great measure of the total package of amenities a property offers.  Ocean House has near spa/resort-like amenities built into its fees.  Shadow Farm has the pristine waters of Silver Lake and tennis courts.  101, Surfside, Water’s Edge and Matunuck Breakers have fabulous views and easy access to the shore.  In order from the lowest to the highest percentage of combined fees/taxes as a percent of selling price per square foot, the condos are as follows:  Surfside-1.3%, Winnapaug Cottage-1.4%, 101 Ocean Road-1.5%, Water’s Edge-2.1%, Ocean House-2.2%, Shadow Farm-2.4%, Quidnesset-2.7%, Oceanwoods-3.2%, and Matunuck Breakers-9.0%.

Reviewing the fifty sales I used for this column, 29 or 58% of the solds fell into the 2-3% ratio of combined fees per square foot of selling price. Seven units, or 14%, were below 2%, and 15 or 30% were from 3-4%.  Only 3 units were above 4%.  Looking more closely, 100% of the condos in Narragansett and South Kingstown were under 3%, while 70% of North Kingstown sales were above 3%.  Westerly had 4 under 2%, 8 between 2-3%, and 5 over 3%.

In summary, condo sales in 2017 have grown ten times faster than single family homes. The biggest improvement has been with condos selling for over $500,000.  On average the fees and taxes associated with a condo run between 2-3% annually of the sale price per square foot.  Among the nine towns, Narragansett and South Kingstown appears to offer the best value of fees relative to selling price per square foot.

To see an example of the combined fees and per square foot measurements for most of the condo associations in South County, please go to my website.

A SAMPLE OF FEES AND COSTS FOR A SAMPLING OF WASHINGTON COUNTY CONDO ASSOCIATIONS

CAVEATS:

  1. Measurements were derived from listing sheet information. If the listing information was incorrect, my measurements will be incorrect.
  2. Measurements for an association came from the sale of one randomly chosen unit. Costs can/will be different for other sales within the same association.
  3. Not all associations are represented either because there were no sales in 2017 or because taxes or condo fees for newer projects have not yet been determined or were left off the listing.
         
 TOWN/

ASSOC

ANNUAL COST

TAX+FEES

MONTHLY COSTS

TAXES+FEE

ANNUAL COST

PER SQ. FT.

TAX/FEES AS % OF

SQ. FT. SELLING PRICE

CHARLESTOWN $$ $$ $$ %%
CASTLE ROCK 4857 405 5.72 3.9
         
HOPKINTON        
NORTH GARDENS 5752 479 5.99 4.7
LINDHBROOK

GREEN

7489 624 5.25 3.7
         
NARRAGANSETT        
CLARK POINT 4653 388 4.28 2.6
WESTWIND 4770 398 5.20 2.1
LAKEWOOD GLEN 5620 468 6.89 2.7
NARRAGANSETT

HIGHLANDS

5684 474 4.33 2.6
OCEAN BREEZE 6183 515 7.55 2.1
NORTHGATE 6566 547 3.72 2.2
SEAWINDS 6611 551 5.77 2.0
RIVERDELL 7037 586 5.19 2.1
POLO CLUB 7527 627 5.70 2.3
GIBSON COURT 7710 643 4.84 1.8
CLARK FARM 8954 746 4.92 2.1
WATER’S EDGE 11,257 938 8.98 2.1
SURFSIDE 13,736 1144 6.57 1.3
101 OCEAN ROAD 14,816 1235 6.03 1.5
         
NORTH KINGSTOWN        
CHADSEY 4934 395 5.05 4.4
SAW MILL SQUARE 5109 426 5.21 3.1
THE FAIRWAYS 6134 511 7.78 3.2
CEDARHURST 7246 603 5.56 2.3
HERITAGE

GARDENS

7308 609 4.23 3.1
HAMILTON

HARBOUR

7883 657 7.29 3.3
CARDINAL RIDGE 8783 731 5.32 2.8
HAMILTON GATE 9200 767 6.13 3.4
OCEANWOODS 10,301 858 6.20 3.2
QUIDNESSETT 15,748 1312 5.71 2.7
         
RICHMOND        
OAK RIDGE 4846 404 4.21 2.9
         
SOUTH KINGSTOWN        
GREEN STREET 4923 410 3.65 2.3
ROCKY BROOK 4975 415 3.69 3.0
NOEL COURT 5273 439 5.23 2.5
SWEET ALLEN FARM 6875 572 6.45 2.9
SOUTHWINDS 8857 738 3.87 2.2
WAKEFIELD

MEADOWS

9060 755 4.55 2.1
MATUNUCK

BREAKERS

11,834 986 25.95 9.0
SHADOW FARM 13,359 1113 8.17 2.4
         
WESTERLY        
BOWLING 3035 253 3.42 3.1
BEACH PLUM 3218 268 11.66 2.7
VILLAGE TERRACE 3722 310 4.4 3.2
MORNINGS SIDE 3996 333 4.41 3.0
HIGH CLIFF 4329 361 3.13 2.1
WINDSOR 4374 365 4.70 3.6
DIXON HOUSE 4420 368 2.60 2.3
SPRINGBOOK 4712 393 4.64 2.5
KING’S GRANT 4967 414 3.73 2.6
WESTWOOD 5241 437 4.73 2.3
FOUNTAIN CREST 5769 481 3.61 1.9
SPINNAKER

LANDING

5899 492 4.06 1.9
ATRIUM AT THE

QUARRY

6362 530 3.96 2.4
CAPTAIN’S WATCH 6801 567 4.50 3.0
BAYSIDE 8172 681 13.62 1.3
WINNAPAUG

COTTAGES

13,804 1150 5.58 1.4
OCEAN HOUSE 28,778 2398 33.08 2.2

 

  1. N. Hetzner is a fulltime Associate Broker in the Wakefield office of Randall Realtors.   He may be reached at 401-742-3421 or cnhetzner@randallrealtors.com. Copies of previous Realty Check columns may be found at cnhetzner.randallrealtors.com. In his spare time, C.N. writes novels. His tenth, Leaving by Degrees, may be found under Neil Hetzner on Amazon, iBooks, Nook, and Smashwords.

May 2017

REALTY CHECK

Spring Fog

Many real estate agents will testify that it is as likely that the first question asked by a friend not seen for some time will be “How’s the market?” rather than “How’s your health?” or “How are the kids or grandkids?” For some agents the practiced response is one word, “Great!” regardless of current market conditions. Over my career, my answer has been paragraphs long and, frequently, the person asking the question starts nodding politely as he backpedals away from me in Belmont’s, or the library, or on the beach.  In the current market, however, my answer is even shorter than, “Great!”  I just shrug my shoulders because I have no sense of what is going on.

Demand

At the national level, home prices are ratcheting up twice as fast as incomes are growing. Case Shiller’s National Home Price Index for February was 5.8% higher than the same month in 2016.  Incomes were up 3% over the last year.  Home prices have jumped 40% from 2012 while income has risen just 12%.  That mismatch between fast rising prices and slow rising personal income usually puts a brake on sales.  That has yet to occur in this market.

Mortgage rates, which went up past 4.25% after the election, have drifted back down to under 4% for a 30 year conventional loan despite an increase in the yields of long-term government bonds. Lower interest rates tend to accelerate sales.

For the first time in a dozen years, there are more new households buying homes than renting.   The percentage of households owning rather than renting is starting to climb back toward its historical average of 65%.  The National Association of Realtors (NAR) reports that March sales of existing homes were the highest in ten years.  First time homebuyers are increasing their share of the market.  After the steep decline in the value of single family homes in 2008, many consumers, particular younger consumers, decided that owning a home would not be a good investment, and that they were better off renting and not having to deal with the constant joys of maintaining a home.  Those sentiments are changing even among millennials.

Moving from the national to the local and reviewing demand in South County for the first four months of the year from 2006 until 2017, the low point was 212 homes sold in 2009. The high was last year when 419 homes were sold.  This year the number falls just short of that at 417.  As a reference point, back in what are considered the good old days of 2006 and 2007, 321 and 378 homes were sold.  Buyers in South County have had their wallets out over the last year or so.

Supply

People want to buy, but there isn’t much for sale. NAR recently reported that nationally March inventory was down 6.6% from March of 2016. New construction units as a percentage of households lags far behind its historic levels and, in fact, that percentage is the lowest since that data started to get collected back in the 1957.

As an example of supply constriction, the historical level of single family inventory for sale in South Kingstown in the spring market tends to be between 275-300 homes. Currently active inventory of single family homes in South Kingstown is just over 100.  In the first four months of 2015, 28% of the active single family listings went into sales agreement in 60 days or less.  This year 45% of active listings went into sales contract in less than 60 days on market

The rule of thumb about inventory is that when there is less than six months of active inventory more power resides in the hands of sellers. Sale price rises.  Buyers buy homes with more faults than they would prefer.  When inventory grows beyond six months, the opposite starts to become true.  Buyers push back on list price and demand that sellers fix things that aren’t in good repair.

At the end of April the single family inventory for South County across all price levels was five months’ worth. However, there are very different inventories at different price levels.  For homes priced between $200,000-300,000 there is about seven weeks of inventory.  For homes priced between $300,000-400,000 there is 3.5 months.  When I look at homes priced over $500,000 and less than $1,000,000 there is more than a year’s worth of available inventory.

For years economists predicted that when single family home prices returned to pre-recession price levels a slew of inventory would come to market as middle-aged homeowners traded up and older homeowners made decisions to cash out and rent, or move into a condo or independent living. So far, however, despite the frothy demand and the rising prices, sellers are sitting on the sidelines.  To my mind, to a certain extent waiting to sell makes some sense; however I think there is a real risk if homeowners who have been contemplating selling wait too long.

  1. N. Hetzner is a fulltime Associate Broker in the Wakefield office of Randall Realtors.   He may be reached at 401-742-3421 or cnhetzner@randallrealtors.com. Copies of previous Realty Check columns may be found at http://cnhetzner.randallrealtors.com// In his spare time, C.N. writes novels. His tenth, Leaving by Degrees, may be found under Neil Hetzner on Amazon, iBooks, Nook, and Smashwords.

March 2017

REALTY CHECK

Keep Repeating: Change Is Good, Change Is Good

A familiar visual trope in disaster movies is the town’s inhabitants wandering around in disorientation after a [choose one] flood, gas explosion, forest fire, tornado, hurricane, earthquake, enemy bombing, has ruined what they have known. After the camera lingers on what has been lost, it normally pans to those souls who are beginning to pick up the pieces and start life anew.  The music swells.  It has been re-affirmed that, indeed, humans are resilient.  Fade to black.

Over the last couple of months if you have noticed that disaster-induced kind of disoriented behavior by someone as you drive along South County’s roads, queue for coffee, or make your way down the aisles of your grocery, but can’t think of what the disaster might have been to cause the obvious disorientation before you, I may have an answer. You may be witnessing a shell-shocked real estate agent changing over from the Fusion to the Matrix Multiple Listing Service program.

If you refrain from making sudden moves or loud noises, and if you can find it in your empathetic hearts to be patient, I can assure you that in a very short time those agents’ tentative steps will become firm and the deer in the headlight stare will return to being laser sharp. I can assure you of that  because my experience is that real estate agents are by definition resilient.  If they aren’t, they soon become former real estate agents.

Sellers’ Delight

The switchover from Fusion has been a massive undertaking.  It felt like going from the English to the Cyrillic alphabet.  Throughout December and into January classes were offered multiple times during the day, and many nights and weekends to get thousands of agents trained on the new system.  Because of the complexity  of the change, many agents took more than one training class.  I, myself, took the class and then watched hours worth of training videos trying to get to where I felt comfortable.

The switch from the old system to Matrix software offers a number of significant benefits to sellers. Where the old system allowed for 25 photos to portray a listing, the Matrix template will accommodate  40 photos.  Admittedly, there are many properties where a dozen pictures will do it justice, but there are also some homes where it would take all forty to capture all that is unique.  Having the option to display 60% more photographs than before is a big benefit.   The old system had the very onerous restriction of limiting the description of a property to 250 characters including spaces.  In some cases this restriction led potential buyers as well as real estate agents to consider hiring retired NSA cryptographers to decipher what all the abbreviations meant.  The new system allows for 4,000 characters to describe a property—as a reference, 4000 characters is just about I’ve used so far in this article.

Buyers’ Greater Delight

The Matrix system offers several substantial improvements for buyers. Obviously, buyers benefit from more pictures and more complete descriptions of listings.  Buyers who are connected with a real estate agent can activate a portal that will give them access to all of MLS.  In addition, Matrix has an astounding mapping function that can automatically show or notify buyers of new listings in very specific geographical target areas.  For example, a map could be generated that would include all of a neighborhood except for homes two blocks either side of a main artery.  Matrix can incorporate multiple variables to refine searches.  There is a  concierge function that will generate new listings that might meet a buyer’s need, but won’t be emailed until the agent has reviewed them and found them suitable.  This function lowers the possibility that buyers will waste time with listings that aren’t quite what they are looking for.  The portal holds all email correspondence between buyer and agent, allows for clients to make comments about listings, and functions in a way as a text mode between buyer and agent.

Analysis

Even as they have groused about the steepness of the learning curve, almost all of the agents I have talked with are very enthusiastic about all the possibilities Matrix offers to them to better serve their clients.

That steep learning curve of the new system and the very short period before the old system was disappeared was not without its costs. As those of you know who read my column on a regular basis, I have a soft spot for statistics.  Continuing in that vein, I have reviewed the pertinent variables related to the changeover from the old system to Matrix.  I am happy to say that after a relatively short period of extremes most of those variables have regressed to their historic levels.

More specifically, in Rhode Island, consumption of alcohol by real estate agents shows a bi-modal distribution with one peak, 27.8% higher than normal, occurring in the week before the Fusion to Matrix conversion was made. A second peak, 22.4% higher than the norm, occurred about a week after the new system went active and agents experienced a series of snafus.  Overall during the period I analyzed, consumption of low alcohol content beverages was down by 8.1%; however glugs taken directly from no-name bottles of vodka surged by 52.4%.  Consumption over the last six weeks has shown a slow but measurable decline with the exception of a massive spike, when consumption jumped by 83.6%, late on the night of Sunday, February 5.

Generic real estate swearing peaked in late January, up 41.7%. Multi-syllabic swearing hit its high, with an increase of 18.4%, around the 10th of February when a number of glitches occurred.  It has since tapered off except for, coincidentally, an extreme surge of 412%, in both multi-syllabic and multi-language swearing that occurred about an hour before the alcohol spike on the night of February  5.

Because of the traditional post-holiday sales coupled to the effect of the new political administration and the Super Bowl on Sunday, February 5, it was not easy for me to tease out just how much shopping therapy was taking place by agents strictly from the MLS changeover. My best guess is that shopping therapy rose about 20%.

Despite the traditional New Year’s resolution directed toward dieting, caloric intake among real estate agents, especially donut consumption, has surged by 16% since the beginning of January. Unlike the drop-off in alcohol and swearing, that increase has been persistent.  It may be that until swimsuit, capris, cargo shorts, and halter top review takes place in April, that there will be no discernible decline.

Overall, I think it is safe to say that things are getting back to normal. I predict that by late spring the community of real estate agents in Rhode Island is going to be wired up from their newly won Matrix competence and working diligently to use that hard-won competence to bring satisfaction beyond expectations to their buyers and sellers.

  1. N. Hetzner is a fulltime Associate Broker in the Wakefield office of Randall Realtors.   He may be reached at 401-742-3421 or cnhetzner@randallrealtors.com. Copies of previous Realty Check columns may be found at http://cnhetzner.randallrealtors.com/. In his spare time, C.N. writes novels. His tenth, Leaving by Degrees, may be found under Neil Hetzner on Amazon, iBooks, Nook, and Smashwords.

January 2017

REALTY CHECK

Annual Local Real Estate Report 2016

Overview

In the nine towns that I cover for this column, all of South County plus East Greenwich, there were 1175 homes sold by Realtors in the doldrums of 2008. By 2014 that number had increased to 1699.  The following year sales grew 8.9% to 1851 homes.  In 2016, unit sales grew another 8.6% to cross the 2000 threshold.  Total dollar sales in 2009 hit a low of $448.5 million dollars.  By 2014 that number was up to $659.1 before increasing by 8.5% to $715.2 million in 2015.  Dollar sales in 2016 jumped a remarkable 17.9% to $837.4 million, an increase of more than $120 million over the prior year.

Looking at my records, which go back to 2000, the two years with the highest unit sales have been the last two. The third highest sales took place back in 2000.  My take is that the 2011 homes sold in 2016 in my covered area is probably a historical high.  That is very good news.

In a recent column I mentioned that the excitement that median housing prices nationally had returned to their previous highs was in my opinion misplaced because those prices were not adjusted for either inflation or for the price of borrowed money. In South County, even disregarding those two mitigating factors, and despite low inventory and record unit sales, house prices have a way to go before returning to their previous highs.  As an example of that gap, the median home price in North Kingstown in 2015 was $320,000.  The median for 2016 was $354,750.  A $35,000 bump in median price is nothing to sneeze at; however the median North Kingstown home price in 2005 was $415,000.

Details

TABLE 1: UNIT HOME SALES–2016

TOWN ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 %CHANGE ’15-‘16
E. GREENWICH 171 191 132 138 138 127 173 217 178 199 219 +10.1
N. KINGSTOWN 286 241 221 236 232 215 240 317 303 338 424 +25.4
NARRAGANSETT 158 201 156 181 162 144 213 218 223 236 234 -1.0
S. KINGSTOWN 265 314 230 248 239 255 304 338 366 374 393 +5.1
CHARLESTOWN 116 120 84 100 102 108 147 112 132 139 148 +6.5
WESTERLY 211 191 163 187 179 173 229 226 261 247 275 +11.3
HOPKINTON 96 73 63 60 65 59 78 83 81 120 102 -15.0
RICHMOND 79 85 66 46 75 77 78 81     93 137 136      -4.3
EXETER 53 59 60 45 54 47 60 61 62 61 85 +39.3
TOTALS 1435 1475 1175 1241 1246 1205 1522 1653 1699 1851 2011      +8.6

 

 

Unit home sales in 2016 by town and the percentage change from 2015 are as follows: East Greenwich—219 sales up 10.1%; North Kingstown– 424 sales, up 25.4%; Narragansett—234 sales, down 1%; South Kingstown—393 sales, up 5.1%; Charlestown—148 sales, up 6.5%; Westerly—275 sales, up 11.3%; Hopkinton—102 sales, down 15%; Richmond—131 sales, down 4.3%; Exeter—85 sales, up 39.3%.  The total for the area was 2011 sales, up 8.6 %.

Table 2: ANNUAL SALES IN MILLIONS OF DOLLARS–2016

TOWN 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016  ’15-’16 % Change
EGRN 97.4 109.8 66.1 61.4 66.0 56.5 75.3 97.0 78.0 90.1 98.7 +9.5%
NKNG 132.7 105.5 90.8 80.3 82.8 72.4 78.9 103.2 103.8 119.3 160.1 +34.4%
NARR 90.8 98.8 83.2 70.9 86.6 68.7 112.8 111.6 107.4 118.2 125.8 +6.4%
SKNG 112.0 130.9 84.7 79.7 79.8 69.0 101.3 112.5 123.2 131.4 139.6 +6.2%
CHAR 64.5 74.8 58.5 38.0 55.6 49.6 66.9 46.2 58.6 70.3 78.9 +12.2%
WEST 122.5 103.7 83.3 79.0 70.4 81.3 115.3 113.8 131.2 108.9 137.7 +26.4%
HOPK 28.2 23.3 16.3 14.5 14.8 13.4 14.9 17.7 17.3 26.5 35.0 +32.0%
RICH 26.7 24.0 17.0 11.0 17.8 17.5 16.8 17.8 22.0 32.7 36.0 +10.1%
EXET 20.6 18.3 21.4 13.7 17.1 16.6 16.6 19.4 17.6 17.8 25.6 +43.8%
TOTAL 695.4 688.1 521.3 448.5 490.9 445.3 598.8 639.2 659.1 715.2 837.4 +17.9%

 

Dollar sales in millions by town and the percentage change from 2015 are as follows: East Greenwich–$98.7, up 9.5%; North Kingstown–$160.4, up 34.4%; Narragansett–$125.8, up 6.4%; South Kingstown–$139.6, up 6.2%; Charlestown–$78.9, up 12.2%; Westerly–$137.7, up 26.4%; Hopkinton–$35.0, up 32.1%; Richmond–$36.0, up 10.1%, Exeter–$25.6, up 43.8%.  The total dollar sales for the area were $837,400,000, an increase of 17.9%

MEDIAN PRICE 2016

Town $ Median

2005

$Median

2014

$Median

2015

$ Median

2016

%Change

’15-‘16

%Change

’05-‘16

East Greenwich 527,500 410,000 412,500 419,900 1.8% -20.3%
North Kingstown 415,000 295,250 320,000 354,750 10.9% -14.5%
Narragansett 431,500 373,250 380,750 417,500 9.6% -3.2%
South Kingstown 372,000 302,000 305,000 315,000 3.3% -15.3%
Charlestown 389,900 315,000 335,000 351,000 4.8% -10.0%
Westerly 335,000 281,000 285,000 290,000 1.8% -13.4%
Hopkinton 303,500 200,000 225,250 255,000 13.2% -16.0%
Richmond 315,000 239,750 239,900 278,800 16.2% -11.5%
Exeter 390,000 265,250 282,000 287,674 2.0% -26.2%

 

Median home prices in 2016 by town and the percentage change from the previous year are as follows: East Greenwich–$419,900 up 1.8%; North Kingstown–$354,750, up 10.9%; Narragansett– $417,500, up 9.6%; South Kingstown– $315,000, up 3.3%; Charlestown–$351,000, up 4.8%; Westerly–$290,000, up 1.8%; Hopkinton–$255,000, up 13.2%; Richmond–$278,000, up 16.2%; Exeter–$287,674, up 2.0%.

Home sales by price level were: $1-199k—205; $200-299k—615, $300-399k—498; $400-499k—255; $500-999k, 365; over $1,000,000—58. In 2015, the distribution was $1-199k—310; $200-299k—550; $300-399k—420; $400-499k—226; $500-999k—274; over $1,000,000—62.  The most important change is the significant drop in homes that sold for under $199,000.

Sales of homes over $1,000,000 were essentially flat compared to 2015, 58 to 63. The breakdown of the location of those homes was a near mirror to the previous year.  In 2016, the distribution for million dollar homes was as follow:  Westerly, 20; Charlestown, 17; Narragansett, 11; South Kingstown, 8, North Kingstown, 4; and East Greenwich with 2.

The Future

Looking to 2017, I see a number of conflicting forces that will affect the local housing market. Mortgage rates have gone up more than a half point since the election.  There is a pretty good chance that they will go up another half point before the end of the year.  A one point rise in interest rates bumps the cost of a $250,000 30 year mortgage from $1125 to $1267 a month, or $1700 more a year.  As 2016 ended, the ability to deduct mortgage insurance premiums from federal taxes expired.  If the new congress doesn’t renew that deduction, that will be a drag on sales to potential buyers who have less than 20% to put down payments.  The rise in heating costs will push more people out of the market.  On the plus side, the lower the unemployment rate goes, the more pressure there is for wages to rise.  In addition, in South county where so many sales are as second homes, the recent rise in the stock market should bring more second home buyers into our local market.

  1. N. Hetzner is a fulltime Associate Broker in the Wakefield office of Randall Realtors.   He may be reached at 401-742-3421 or cnhetzner@randallrealtors.com. Copies of previous Realty Check columns may be found at http://cnhetzner.randallrealtors.com/. In his spare time, C.N. writes novels. His tenth, Leaving by Degrees, may be found under Neil Hetzner on Amazon, iBooks, Nook, and Smashwords.

 

 

 

 

 

 

 

 

 

Posted on June 9, 2017 at 2:43 pm
C.N. Hetzner | Category: Uncategorized

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