Rhode Island Home Loan Activity Strong in Newport County
Think the real estate market in Newport County, R.I., is soft?
If so, think again, say the Newport Daily News and the Newport County Board of Realtors President, Jennifer O’Hora Lawrence.
During a presentation Tuesday before the Jamestown Chamber of Commerce, Lawrence said the current Rhode Island housing market gives first-time buyers the opportunity to get into the game, offering more options for those searching for a new place to live.
As for those who got wrapped up in the housing boom of the past few years, Lawrence’s message is just sit tight, because home prices will rise up again - just maybe not as fast as before.
“In Newport County, we’re very fortunate that we’re islands,” Lawrence said. “There’s only so much land and we have a lot of special events that only happen here and make this area attractive.”
Home prices during the past few years have surged not only in Rhode Island, but also across the country. It was common for houses and businesses to sell for record prices, but that trend has slowed.
Lawrence said the mainstream media tends to lump a niche market such as Newport County in with the rest of the country, when in reality, Rhode Island mortgage demand is strong and the market is in better shape than many people believe.
The median sales price for single-family homes in Newport County rose in Little Compton, Portsmouth and Tiverton in 2006, while they were off slightly in Jamestown, Middletown and Newport compared to 2005 figures. Statewide, the 2006 median price was down by a little more than one-tenth of 1 percent.
“We couldn’t sustain the intense pace we had in the last few years, but it opens it up to both buyers and sellers,” Lawrence said. “But what’s happening in Las Vegas and Florida isn’t happening here.”
The housing market in both those places has struggled for the past few years, with not enough buyers for the number of homes being built.
Statistics provided by Lawrence indicate that single-family homes in Rhode Island experienced an average of 79 days on market in 2006, close to two weeks longer than the year before.
Stephen D. Antoni of the Kent Washington Association of Realtors, said what his organization is seeing across the Narragansett real estate landscape is roughly the same as the situation in Newport County.
“Home prices won’t go that much lower,” Antoni said. “In Rhode Island, with the exception of the condo market, we haven’t seen the decline in the market that others have experienced, nor are we positioned to.”
The bad thing, Antoni said, is that some buyers got into the market a couple of years back and became overextended, leading to many of the foreclosures running in the legal section of newspapers.
“People want to buy a house and that’s our job, to sell them a house, but I cringe when I read those foreclosure notices,” Antoni said. “I hope none of them were buyers I represented because you form a bond with them.”
Another problem is that sellers are trying to get post-boom prices when that market has tapered off. But Lawrence said as long as mortgage rates remain reasonable, there will be buyers in the market.
Based on large-scale real estate forecasts, for every point a home loan rate increases, a million buyers are knocked out of the market.
Below are the median sales prices for single-family homes in Newport County and Rhode Island in 2006, with the percent change from 2005:
- Jamestown; $556,000 (-1.6)
- Little Compton: $595,000 (+43.7)
- Middletown: $389,450 (-1.4)
- Newport: $449,000 (-2.6)
- Portsmouth: $376,000 (+12.6)
- Tiverton: $309,450 (+3.1)
- Statewide: $282,900 (-0.1)
SOURCE: Newport Daily News