Upon re-reviewing the information, it seemed to me that the three-month window is sure to be erratic on a running basis. Simply as a matter of their size, a significant number of cities and towns in Rhode Island are apt to have fewer than 20 sales in a calendar quarter, so a good month (or significant sale) would throw things off considerably. Moving forward, therefore, I’ll trace the rolling annual average.
The following table presents data for the twelve months ending with July 2012. The percent change columns are measured against the twelve months ending July 2011. The numbers in the pink-shaded cells are not favorable. Coming out of a recession and housing bust, a city or town should want sales to be increasing while inventory drops and median sales prices increase. That’s an indication that people want to move into an area and property values are generally on the upswing.
As the table makes very clear, while no cities and towns are in the worst condition — fewer sales, higher inventory, and dropping prices — only four show full progress toward health: Barrington, Burrillville, Little Compton, and North Smithfield.
Rhode Island Cities and Towns Single-Family Home Sales, Twelve Months Ending in July, 2011 to 1012
|Sales||Sales change (%)||Inventory change (%)||Median sales price change (%)|
As with the last iteration of this report, I summed the three measures together into a “downward spiral index.” (Sales change minus inventory change plus sales price change.) By that measure, the five most struggling markets are in:
- Central Falls
- West Warwick
Meanwhile, the five most-advancing markets are:
- Little Compton
- North Smithfield
Of course, change is relative, depending how deep of a rut the town had been in. So, I also looked at the one-month results for July to see how the local markets are doing right now. The following table shows how many days the average house has been on the market and the ratio of the average sales price to the average list price in the town.
Note that this ratio is different from what realtors would refer to as a sales-list ratio. In that case, being client-focused, they’re more concerned with how much sellers are being negotiated down from their asking prices when they sell a specific house. But if a seller has adjusted his or her price down over time, the ratio might look better than it really is. To adjust for this, I thought comparing the overall average sales price with the overall average asking price currently on the market might give a better sense of how much buyers are willing to pay to live in a town versus how much sellers think they should get.
Rhode Island Cities and Towns Single-Family Home Sales, Time on Market and Average Sales Price to Average List Price Ratio, July 2012
|Market time (days)||Sale-list ratio|
This data lends itself to another aptly named index, perhaps a “disappointment index,” created by dividing the ratio by the days on the market. It’s interesting to see that the town that has most convincingly bucked the downward spiral leads in disappointment.
- Little Compton
- Central Falls
Little Compton may be seeing sales and sales prices going up while inventory drops, but the average house has been on the market for almost a year, and the people selling are only receiving about two-thirds of the average asking price in town. (That might have something to do with the shrinking inventory; people may not want to bother thinking about selling in such an environment.)
By contrast, these five cities and towns are on the optimistic side of the disappointment list:
- West Greenwich
- West Warwick
To be clear: This does not mean that people are getting more for their houses than they’re asking. Rather, if the average sale price is above the average list price, it means that the homes that are selling are weighted to the more-expensive side. In a city like Providence, the significant variation from neighborhood to neighborhood could distort the city’s overall results, but they’re interesting to note, nonetheless. After all, over the last decade, Providence was in the unique situation of gaining in unemployment while seeing median-household income rise.
In their own very different ways, Little Compton and Providence point to the critical point, with this data. The factors at play in each city and town are far too numerous to lend themselves to general theories. However, for people interested in a particular community, adding these results to the Current‘s three-part series on Census and employment trends across Rhode Island can help to fill out the picture.