[Please keep in mind this is a National and Regional review of activity, with very limited data and analysis for our specific region (Greater Providence Area)]
Some analysts believe this could be the beginning signs of a turnaround...
Sales of existing homes rose last month, exceeding analyst expectations, "however the number of unsold properties hit an all-time high". Still, sales were about 13% lower than a year ago and values are down dramatically.
"The number of unsold single-family homes and condominiums rose to 4.67 million, the highest number since 1968, when tracking began by industry insiders".
"Until the inventory level is reduced to more normal levels, analysts say, the housing slump is likely to persist. The inventory level is being driven higher by a massive wave of mortgage foreclsures".
"Between 33%-40% of sales activity is coming from foreclosures or other distressed properties, estimated Lawrence Yun, chief economist".
Locally, "Foreclosures are laving their mark in Providence, nearly one of five sales in the area were distressed sales, said a local professional. The discounted properties are weighing down the market, where the median price fell by 13% last month to $234,900. Sales also slipped by 9% in July".
In my opionion:
- Some markets (througout the US) will recover faster than the rest of the country and will begin to show improved statistics nationally.
- A change in national sales figures does not necessarily translate into a better local market
- Locally, I do believe our market is being held down by foreclosures and distressed sales. Distressed sales push values lower and effect the time on the market and values of all other sales. We will need to see a dramatic reduction in foreclosures and distressed sales before we begin to even notice a leveling of the market locally.
- Keep in mind foreclosures and distressed sales have a bigger impact in larger markets, espcially cities such as Providence, Cranston, Pawtucket and North Providence. Smaller markets, such as Bristol, Warren, Portsmouth, Glocester, Smithfield and others are mostly slower due to the general economic state of our nation.
- An increase in national sales is a very positive sign; this will likely translate into a more stable/normal inventory (On a national scale) and more stable values, but locally sales are still down and in some cases decreasing.
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