Election season and other contingencies led me to miss the single-family home sales data for September, but compared with August, Rhode Island’s real estate market appeared to near or perhaps finally to reach the bottom in October. For the state as a whole, median sales prices were lower in the last 12 months than in the 12 months prior, but the number of sales continues to increase, and inventory is finally decreasing.

Good news depends on one’s perspective, of course, but what October’s results indicate is that the market is equilibrating.  In other words, enough people are willing to buy houses at prices for which Rhode Islanders are willing to sell them that they are selling more quickly than new houses are going on the market.

One could argue, of course, that the financial loss that comes with selling a house for less than is owed has become so large that homeowners are making the decision to stay put.  Nonetheless, a shrinking inventory would typically be required for prices to begin going up.

As the following table shows, for the month of October, only four Rhode Island cities and towns continued to have negative Downward Spiral Index scores: Central Falls, Woonsocket, Tiverton, and West Greenwich.  That means that the sales change minus the inventory change plus the sales price change results in a negative number.

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

	Sales	Sales change (%)	Inventory change (%)	Median sales price change (%)
Rhode Island	7,684	17.1	-8.6	-5.1
Barrington	229	10.6	-14.3	-13.2
Bristol	123	6.0	-12.1	-3.8
Burrillville	137	31.7	-8.6	0.0
Central Falls	16	33.3	33.3	-12.7
Charlestown	136	25.9	-7.4	-6.5
Coventry	380	26.2	-16.8	-1.2
Cranston	636	19.1	-14.8	-5.7
Cumberland	298	16.9	-12.1	-3.5
East Greenwich	169	35.2	4.7	-1.8
East Providence	326	24.0	-13.5	-7.2
Exeter	59	11.3	-11.1	-4.6
Foster	46	39.4	-32.5	12.6
Glocester	93	16.3	-14.8	-5.9
Hopkinton	78	52.9	8.2	-19.8
Jamestown	55	-11.3	-8.4	26.6
Johnston	245	10.4	-19.2	-7.6
Lincoln	142	9.2	3.4	3.0
Little Compton	33	10.0	-18.3	4.9
Middletown	122	31.2	2.6	-6.7
Narragansett	216	49.0	-12.6	5.9
Newport	169	18.2	-18.6	10.7
North Kingstown	230	5.0	0.0	-1.7
North Providence	249	19.7	-18.7	-8.8
North Smithfield	89	18.7	-12.0	4.8
Pawtucket	335	9.5	-15.3	-8.8
Portsmouth	164	20.6	2.9	-4.9
Providence	623	22.4	-12.1	-0.8
Richmond	76	5.6	-11.4	-8.5
Scituate	87	35.9	-3.0	-11.0
Smithfield	116	-2.5	-2.4	0.1
South Kingstown	290	12.0	2.8	-3.4
Tiverton	120	8.1	1.2	-13.8
Warren	65	27.5	-8.6	-11.1
Warwick	945	13.7	-7.0	-6.0
West Greenwich	48	23.1	2.4	-21.0
West Warwick	200	13.0	-8.7	-9.7
Westerly	202	8.6	2.9	-0.5
Woonsocket	137	3.0	0.0	-10.1

 

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

1. Central Falls (6)
2. Woonsocket (1)
3. Tiverton (18)
4. West Greenwich (3)
5. Smithfield (2)

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

1. Foster (2)
2. Narragansett (6)
3. Newport (4)
4. Coventry (12)
5. Burrillville (11)

The other angle that I’ve been taking to present these numbers is an index of the time that houses have spent on the market before being sold and the ratio of average sales price to average asking price.

It’s important to note that this ratio isn’t the sales price compared with the asking price for the property sold.  Rather, it’s the sales price compared with the asking prices of houses still on the market.

In August, the average time on the market was 89 days, with the sale-list ratio as 72%, so it continues to take longer to sell houses for less.

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

	Market time (days)	Sale-list ratio
Rhode Island	95	59.9
Barrington	71	47.1
Bristol	95	56.7
Burrillville	54	106.8
Central Falls	148	169.0
Charlestown	71	129.0
Coventry	87	90.5
Cranston	92	76.4
Cumberland	98	77.3
East Greenwich	77	82.2
East Providence	87	72.7
Exeter	58	62.7
Foster	118	66.9
Glocester	111	58.2
Hopkinton	103	63.2
Jamestown	174	34.2
Johnston	51	85.2
Lincoln	115	80.2
Little Compton	191	164.6
Middletown	121	36.8
Narragansett	148	76.8
Newport	168	49.7
North Kingstown	96	63.2
North Providence	77	84.2
North Smithfield	44	60.0
Pawtucket	91	83.0
Portsmouth	79	36.3
Providence	71	79.8
Richmond	252	47.6
Scituate	72	75.2
Smithfield	102	80.4
South Kingstown	97	73.5
Tiverton	190	54.1
Warren	77	93.6
Warwick	70	81.8
West Greenwich	68	64.3
West Warwick	107	109.0
Westerly	227	64.5
Woonsocket	93	79.1