Checking in on single-family home sales across Rhode Island, as I did for July and 1Q12, reveals a mixed picture. Results for the state are mildly improving, but the “downward spiral index” worsened for 22 of the 38 listed cities and towns.

The downward spiral index is the sum of the three percentages given in Table 1.  The idea is that an improving market will see an increase in sales,  a decrease in inventory, and an increase in median sales price.  If inventory is dropping, that indicates that houses are selling faster than new families can put them on the market, and if the median sales price is climbing, that suggests that the demand for homes in the area is increasing.

Conversely, a declining market will see sales dropping, more homeowners seeking to unload their properties, and the prices of houses that do sell dropping, as sellers become increasingly desperate.

Of the 38 Rhode Island cities and towns for which their is sufficient data (with New Shoreham as the lone omission), only Foster, Little Compton, and North Smithfield were positive on all three of these measures for August.  On the downside, a drop in the number of sales led Woonsocket to join Smithfield on the list of municipalities that have undesirable results on all three counts.

Pink shading in a cell of the table indicates a number that points in an undesirable direction.

Rhode Island Cities and Towns Single-Family Home Sales, Twelve Months Ending in August, 2011 to 1012

	Sales	Sales change (%)	Inventory change (%)	Median sales price change (%)
Rhode Island	7,491	15.5	4.8	-7.7
Barrington	221	5.7	-8.1	-7.9
Bristol	123	-0.8	-4.8	-5.7
Burrillville	126	21.2	-2.0	-2.3
Central Falls	16	60.0	55.6	-13.9
Charlestown	133	12.7	2.5	-14.3
Coventry	360	19.6	-1.3	-1.3
Cranston	590	11.7	3.8	-9.6
Cumberland	298	27.9	-3.5	-7.4
East Greenwich	162	25.6	14.5	-3.4
East Providence	319	27.1	0.0	-1.8
Exeter	53	1.9	4.3	-4.5
Foster	45	25.0	-26.2	8.1
Glocester	93	17.7	-3.3	-6.5
Hopkinton	74	34.5	21.3	-19.6
Jamestown	51	-31.1	-3.4	34.1
Johnston	250	17.4	1.0	-9.9
Lincoln	134	8.1	25.2	-3.9
Little Compton	39	44.4	-10.7	12.9
Middletown	112	20.4	11.2	-22.4
Narragansett	194	30.2	-1.0	-1.4
Newport	171	23.0	-8.7	-0.4
North Kingstown	231	5.0	9.3	1.0
North Providence	243	19.7	-1.0	-11.9
North Smithfield	84	13.5	-3.8	10.3
Pawtucket	320	10.0	2.8	-8.7
Portsmouth	165	32.0	9.3	1.0
Providence	637	31.3	8.5	-4.0
Richmond	81	22.7	-10.7	-2.1
Scituate	82	18.8	8.5	-11.5
Smithfield	114	-13.0	17.2	-2.4
South Kingstown	272	4.2	8.7	6.1
Tiverton	129	27.7	10.7	-15.6
Warren	68	61.9	-3.3	-12.0
Warwick	916	10.2	11.0	-7.8
West Greenwich	48	4.3	11.1	-15.6
West Warwick	204	24.4	14.0	-13.9
Westerly	197	4.8	7.6	4.1
Woonsocket	136	-2.2	25.4	-11.1

 

The communities in the five worst conditions, according to this index, have shuffled around a bit (last month’s rank is in parentheses):

1. Woonsocket (3)
2. Smithfield (2)
3. West Greenwich (7)
4. Lincoln (8)
5. Middletown (4)

On the opposite end, the following cities and towns are improving most decisively:

1. Little Compton (1)
2. Foster (3)
3. Warren (2)
4. Newport (12)
5. Richmond (9)

Once again, I also took a snapshot of each city and town’s condition for the single month, in this case August 2012.

Note that the “sale-list ratio,” in the table, is different from what realtors would refer to as a sales-list ratio. In their 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.

Roughly speaking, the ratio is the percentage of the average price that sellers are actually achieving.  Market time is the average length of time that sold houses have been for sale.

Rhode Island Cities and Towns Single-Family Home Sales, Time on Market and Average Sales Price to Average List Price Ratio, August 2012

	Market time (days)	Sale-list ratio
Rhode Island	89	72.0
Barrington	94	64.4
Bristol	84	61.0
Burrillville	70	77.8
Central Falls	17	72.9
Charlestown	88	50.8
Coventry	104	74.0
Cranston	118	84.7
Cumberland	75	78.4
East Greenwich	95	76.2
East Providence	99	91.3
Exeter	50	94.4
Foster	104	79.4
Glocester	85	52.3
Hopkinton	188	72.7
Jamestown	105	52.5
Johnston	59	90.6
Lincoln	186	84.4
Little Compton	99	59.3
Middletown	129	52.7
Narragansett	142	52.9
Newport	146	146.2
North Kingstown	73	76.2
North Providence	58	81.8
North Smithfield	103	64.1
Pawtucket	94	80.5
Portsmouth	113	77.9
Providence	65	107.1
Richmond	45	93.1
Scituate	29	68.9
Smithfield	47	90.2
South Kingstown	110	78.8
Tiverton	124	65.2
Warren	116	77.8
Warwick	50	75.6
West Greenwich	71	58.2
West Warwick	104	87.9
Westerly	88	30.1
Woonsocket	82	95.8

 

To summarize this data, I’ve compiled another index, the “disappointment index,” created by dividing the ratio by the days on the market. (Less time on the market and a greater average sale price will both lead to a higher score.)  The following five are, by this measure, the most disappointing (last month’s rank in parentheses):

1. Westerly (14)
2. Narragansett (15)
3. Hopkinton (10)
4. Middletown (5)
5. Lincoln (13)

On the other side, the five communities in which the combination of time-on-market and percentage of average sales price is most positive are:

1. Central Falls (37)
2. Scituate (36)
3. Richmond (4)
4. Smithfield (15)
5. Exeter (24)

As the volatility of this list shows, the single-month numbers can vary significantly from month to month, and in some cases, there isn’t truly enough data to declare a trend.  In August, for example, only one single-family home sold in Central Falls.  The emergence of the city from bankruptcy may have had a positive effect, of course, but a single property based on inventory of 12 homes isn’t exactly a sea change.

Readers should view the “disappointment index”  in concert with the “spiral index” and (especially) local circumstances that they know to be true from their own experience.1Q12ol-4.5