home sales

Chart: RI home prices steadying after 27% post-bubble drop

February 26th, 2014 at 11:35 am by under Nesi's Notes, On the Main Site

Has Rhode Island’s housing bubble finally finished bursting?

While it’s impossible to say for sure, new data from the Federal Housing Finance Agency shows that after a six-year decrease that pushed Rhode Island’s home prices down 27%, the decline has stopped.

The FHFA all-transactions house price index for Rhode Island, which measures changes in the cost of single-family homes, soared by 151% from the fourth quarter of 1996 through the first quarter of 2006, when the bubble popped. The index then began to drop, falling 27% through the second quarter of 2012.

The new data released Tuesday, however, shows Rhode Island home prices have barely moved in the six quarters since then, bouncing around in a narrow range compared with their big swings over the prior decade and a half. Single-family house prices have thus steadied at nearly double their 1996 level:

RI FHFA All-Trans House Price Index 4Q2014

• Related: Why is it more expensive to live in Providence than in Boston? (May 16, 2011)

How much you need to make to buy a house in each RI town

September 27th, 2013 at 12:01 am by under Nesi's Notes, On the Main Site

The advocacy group HousingWorks RI is out with its 2013 Housing Fact Book [pdf], a compendium of data about Rhode Island’s ever-pricey housing market. It’s always an eye-opening read.

One of the most interesting charts in this year’s edition is this breakdown of how much a family would need to make a year to afford the median-priced single-family home in each Rhode Island community.

There’s only one place where a family earning less than $30,000 can buy the median house – Central Falls – and there are five places where you need to earn at least $100,000 to do so: Block Island, Providence’s East Side, Jamestown, East Greenwich and Little Compton. The median house costs more than the state’s median household income ($53,636 last year) in two-thirds of all communities. Take a look:


• Watch: Executive Suite looks at why housing is so expensive in RI (Oct. 29)

Hasbro CEO Goldner selling Providence mansion for $2.89M

July 22nd, 2013 at 6:21 pm by under Nesi's Notes, On the Main Site

barbara_brian_goldner_hasbroOne of Rhode Island’s top executives has put his home up for sale.

Hasbro President and CEO Brian Goldner and his wife, Barbara, are seeking $2.89 million for the historic mansion at 309 Benefit St. on Providence’s East Side that they’ve owned for five years. The 8,701-square-foot house was listed for sale on July 10 by Residential Properties and his its own website, 309BenefitSt.com.

The Goldners bought the property in August 2009 for $3.2 million from the widow of Wharton P. “Whit” Whitaker, an executive with the Boston investment firm Eaton Vance, according to city records.

The house features 13 rooms including five bedrooms, five full bathrooms plus two half-baths, four fireplaces, an elevator and a four-car garage. The property was assessed by the city this year for $2.21 million; the annual tax bill is $33,899.

The brick property, known as the Susan and William Huston House, is one of the most striking buildings on Benefit Street. The Providence Preservation Society says the house was built between 1867 and 1869, though the Residential Properties listing dates it to 1860. It underwent major renovations in 2008, the listing reports.


Trulia: Home prices are undervalued in Providence region

May 15th, 2013 at 6:44 pm by under Nesi's Notes, On the Main Site

A leading real-estate firm says houses are cheap – relatively speaking – in the Providence region.

Home prices in the Providence-New Bedford-Fall River metropolitan area are 13% undervalued relative to the economic fundamentals of the region, significantly more than the 7% undervaluation nationwide and 8% undervaluation in Boston, according to an analysis by Trulia, the real-estate data firm.

Jed Kolko, Trulia’s chief economist, explained the methodology in a blog post:

[W]e assess whether home prices are overvalued or undervalued relative to their fundamental value by comparing prices today with historical prices, incomes, and rents. Incomes determine how much people can pay for housing, and price increases aren’t sustainable if they push prices too high relative to incomes. Rents reflect how much people value housing even if they won’t benefit from price appreciation (as renters don’t, but owners do); the price-to-rent ratio is like the price-earnings (P/E) ratio for stocks. Using data from multiple sources … we create several measures of fundamental value and combine them in order to calculate how overvalued or undervalued home prices are relative to fundamentals.

Home prices in the Providence area have fallen a long way since the height of the housing bubble: Trulia estimates prices were 51% overvalued during the middle of the 2000s, while they were 39% overvalued nationwide. (The Providence metro area encompasses all of Rhode Island plus Bristol County, Mass.)

Housing prices are below their fundamental value in 91 of the nation’s 100 largest metro areas, including Providence, according to Trulia. The only places where homes are estimated to be overvalued are in California, Texas, Oregon and Hawaii.

There aren’t exactly a flood of new people arriving in the area to snap up those supposedly cheap houses.

Trulia reports Providence was the sixth-slowest-growing major metropolitan area in the U.S. last year, eking out a population uptick of 0.1%, compared with 3% in fastest-growing Austin, Texas. Providence also has some of the oldest housing stock in the country: 6.6% of the homes for sale in March were built before 1900.

• Related: Study: Cost-of-living in Providence 23% above national average (Feb. 20)

Watch Newsmakers: Taveras, Tim White tour rundown homes

March 3rd, 2013 at 5:00 am by under Nesi's Notes, On the Main Site

Rhode Island house prices post biggest decline in the country

November 29th, 2012 at 5:00 am by under Nesi's Notes, On the Main Site

The local housing market is still struggling.

Rhode Island home prices declined 3.5% in September from a year earlier, the largest drop in any state, according to real-estate data firm CoreLogic Inc. Prices rose 5% nationally, with 43 of the 50 states reporting increases, including a 2.5% uptick in Massachusetts.

Housing prices doubled in Rhode Island between the summer of 2000 and the winter of 2006, according to the Federal Housing Finance Agency index. Prices have dropped 35% over the last six years and are now back to about the same level where they were in the summer of 2003.

A total of 11,832 homes were sold in Rhode Island during the 12 months through September, an increase of 10% from the previous year, according to CoreLogic. One in four of those were short sales, and there was a 9.9-month supply of distressed homes in the state.

Rhode Island continues to have more homeowners in trouble than most other states. CoreLogic said 7.5% of all mortgages in Rhode Island were at least 90 days delinquent in September, tied with Connecticut and topped only by Florida, Nevada, New Jersey, Illinois, Maryland, and New York.

Corelogic said 22.7% of Rhode Island homeowners had negative equity in September, meaning they owned more on their mortgage than their property was worth.

• Related: Watch Executive Suite with Gorbea, Marcantonio on RI housing (Oct. 29)

Chart: House prices still aren’t going up in RI, bucking US trend

November 28th, 2012 at 5:00 am by under Nesi's Notes, On the Main Site

What’s wrong with Rhode Island’s housing market?

A new chart making the rounds this week in the economics blogosphere raises the question. Amir Sufi, a finance professor at the University of Chicago, compared each state’s house price crash from 2006 to 2011 with its house price recovery over the last two years.

Basically a state is worse off the closer it gets to the bottom-left of the graph, which arguably gives Rhode Island the weakest housing market of all – the seventh-worst housing crash in the nation from 2006 to 2011, followed by the weakest recovery (in fact, a further decline) into this year:

(h/t: Wonkblog)

Watch Executive Suite with Gorbea, Marcantonio on RI housing

October 29th, 2012 at 5:00 am by under Nesi's Notes, On the Main Site

Patrick Kennedy cuts asking price for his RI home to $1.395M

October 5th, 2012 at 5:00 am by under Nesi's Notes, On the Main Site

Patrick Kennedy is sweetening the deal for would-be buyers of his home on Aquidneck Island.

Kennedy has cut the asking price for his three-acre waterfront property on Farmlands Drive in Portsmouth to $1.395 million, a $200,000 reduction from the original asking price in January, according to its listing with Prudential Prime Properties.

The former congressman built the 10-room, three-story home overlooking the Sakonnet River in 2001. It’s described as the Kennedy Orchard House and features three bedrooms, three bathrooms, two fireplaces and 3,144 square feet of living space. The estimated annual tax bill for the property is $17,975.

Kennedy, who now spends most of his time in New Jersey with his wife and new baby, has said he plans to buy a home in Providence to maintain his ties with Rhode Island. He retired from Congress in 2010 but returned recently to campaign for his successor David Cicilline.

Kennedy wouldn’t be the first Rhode Island politician to be disappointed by the local property market in the wake of the housing bust. Gov. Lincoln Chafee was forced to cut the price of his Providence home repeatedly before it finally sold for $675,000 last September.

• Related: Patrick Kennedy inherits millions from his late father Ted (Aug. 25, 2010)

Raimondo: $25M housing bond cheaper thanks to pension cuts

September 20th, 2012 at 5:00 am by under Nesi's Notes, On the Main Site

Rhode Island built up significant goodwill on Wall Street with last year’s pension law, and Treasurer Gina Raimondo says the state should tap into that now by borrowing to fund affordable housing.

Raimondo spoke at Wednesday’s kickoff for Yes on 7, the campaign for a Nov. 6 ballot question to borrow $25 million and use it to subsidize new and refurbished affordable housing. The treasurer said the “tough” pension cuts will allow Rhode Island to get lower interest rates from the bond market.

“We said we’re going to cut so we can invest,” Raimondo said. “I’m very happy to tell you that because of pension reform and some of our other good fiscal decisions last year, it puts us in a much better standing to go to the bond market now to raise money for things like affordable housing, so we can invest in Rhode Island’s future.”

The treasurer pitched the housing bond as “a fiscally responsible and prudent thing to do” – good stimulus and good social policy. “People ask me, how are we going to get Rhode Island working again?” she said. “We’re going to make this state competitive. We’re going to take money and invest in things that are right.”


RI ranks 7th-highest in the US on new ‘Housing Misery Index’

March 12th, 2012 at 2:53 pm by under Nesi's Notes, On the Main Site

It’s no secret Rhode Island was hit hard when the housing bubble burst. But six years later after prices peaked, the state is still among the worst affected in the nation.

Rhode Island ranks No. 7 on a new Housing Misery Index created by Trulia, a real-estate data website. The index adds two numbers together: the percentage change in home prices from the peak and the percentage of mortgages either severely delinquent or in foreclosure.

Rhode Island scored a 34 on the index, primarily due to a nearly 30% decline in home prices since 2006. The only more miserable states were Nevada (73), Florida (62), Arizona (55), California (54), Michigan (37) and Idaho (35), with Georgia tying Rhode Island for seventh place.

“Why these two indicators?” writes Jed Kolko, Trulia’s chief economist. “First, big price drops lead to more underwater borrowers and less household wealth, which hurt the housing market and hold back economic recovery. Second, defaults and foreclosures damage consumer confidence in the housing recovery, and foreclosures cause pain not only for people who lose their homes but also for their neighbors.”

Richard Florida at The Atlantic Cities took a closer look at the numbers:

Housing misery is directly linked to the economic crisis. There is a substantial correlation between Housing Misery and the unemployment rate (.61). Housing Misery is positively associated with the percentage of state residents who rate current economic conditions to be “bad” (.47) and negatively so with the percentage who rate them as “good” (.46). There is no correlation whatsoever between housing misery and state income levels or education levels. …

[S]tates with higher levels of housing misery tended to vote for Obama in 2008 (the correlation between the two being .32), while those with lower levels of housing misery were more likely to go for McCain (-.33).

Chafee cuts East Side home’s price by $160,000 in 5 months

July 21st, 2011 at 11:21 am by under Nesi's Notes

Chafee's house at 54 Barnes St.

If Lincoln Chafee’s experience is any indication, Rhode Island is still a buyer’s market for housing.

This week the governor and his wife reduced the asking price for their 3,900-square-foot home on Providence’s East Side by another $70,000. It’s the third reduction – and the biggest so far – since the house went on the market in mid-February.

The Chafees are now looking to get $729,000 for the seven-bedroom, three-and-a-half bathroom property at 54 Barnes St. That’s down 18% from their initial listing price of $889,000. The house didn’t sell at $829,000 or $799,000, either.

The Chafees bought the house for $939,000 in 2006, so selling at the current price would mean a sizable $210,000 loss for the wealthy couple (before closing costs – though at least those are apparently low here). They previously tried to get rid of the property in 2009 but didn’t wind up selling at the time.

Bill McBride, who writes the must-read economics blog Calculated Risk, suggested in May he expects the Chafees’ house to sell somewhere in the $700s. “So many homeowners are unwilling to price their homes realistically – at least the Chafees have been willing to reduce the price,” he noted.

The 101-year-old two-story colonial has an appraised value of $801,200, according to the city assessor’s office. Records show the house sold for $370,000 in 1998, meaning the price more than doubled in the eight years between then and when the Chafees bought it.

(photo: Residential Properties)

Did mortgage closing costs drop in RI like Bankrate says?

July 20th, 2011 at 2:21 pm by under Nesi's Notes

This is a little odd: The cost of closing on a mortgage in Rhode Island has apparently plunged from 14th-highest in the country down to 41st-highest over the past year, according to Bankrate’s annual survey.

Origination and title costs on a $200,000 mortgage in Rhode Island average $3,705 this year, down from $3,972 in 2010, Bankrate said. Closing costs rose 8.8% nationwide to average $4,070, with the highest costs in New York ($6,183) and the lowest in Arkansas ($3,378).

It’s possible that Rhode Island’s small size leads to noisy findings in Bankrate’s surveys. Over the past three years, the state has bounced from No. 42 in 2009 to No. 14 in 2010 to No. 41 in 2011.

It’s also possible last year was an outlier, which would mean Rhode Island is indeed one of the least expensive places in the nation to close on a mortgage.

Here’s how Bankrate explained its findings:

Most of the rise in closing costs is tied to fees charged directly by lenders. … Origination fees include lender charges for services such as underwriting and processing.

“Interest rates get a lot of attention, and rightfully so, but it’s also important for consumers to compare lender fees when shopping for a loan,” said Greg McBride, CFA, senior financial analyst for Bankrate, Inc.

Bankrate surveyed up to 10 lenders in each state in June 2011 and obtained online good faith estimates for a $200,000 mortgage to buy a single-family home with a 20 percent down payment. Costs include fees charged by lenders, as well as third-party fees for services such as appraisals and title insurance. The survey excludes taxes, property insurance, association fees, interest and other prepaid items.

Bankrate has more information on the survey here. Single-family home sales in Rhode Island were down 22% in June compared with a year earlier (as predicted), the Realtors said this week.

Tracking Rhode Island’s mortgage crisis in its fourth year

June 1st, 2011 at 7:00 am by under Nesi's Notes

Bill McBride of the must-read economics blog Calculated Risk posted two interesting charts last month about the mortgage delinquency crisis that I thought I’d share. They’re a reminder of just how much the housing crisis has affected Rhode Island.

This first one shows the delinquency rates in the 10 worst-hit states at three points over the last four years: around the start of the housing crisis (January-March 2007), a year ago (January-March 2010) and this past winter (January-March 2011).

The data comes from the Mortgage Bankers Association; Rhode Island is second from the right:

A couple things stand out to me in this one. Rhode Island’s rate of seriously delinquent mortgages is quite high – ninth-worst in the nation. The percentage of delinquent mortgages in Rhode Island nearly tripled, from 5.5% to 14%, between 2007 and 2010. And while the total delinquency rate fell by a bit more than a percentage point over the past year, the share actually in foreclosure continued to rise.

This second chart has the same information as the last column of the first one. It shows the delinquency rates for all 50 states, sorted by level of serious delinquency. Rhode Island is ninth-worst, so it’s near the left side:

As a side note, reading Calculated Risk is one of the ways I learned how valuable good charts can be when it comes to reporting about money. Bill’s are much nicer than mine, partly because he’s smarter than me and actually understands Excel!

(charts: Calculated Risk)

More bad news on Rhode Island’s moribund housing market

May 25th, 2011 at 10:36 am by under Nesi's Notes

From the Rhode Island Association of Realtors (emphasis mine):

Single-family housing sales fell 26 percent in April from a year earlier, marking the tenth consecutive month of year-to-year decline, according to statistics released today by the Rhode Island Association of Realtors. Median price also fell, down seven percent from April 2010 to $190,000, reversing an upward trend in median price that began in November, 2009. …

Some degree of the decline can be attributed to the tax credit in place last spring which pushed home sales upward. April 2011 sales, however, remained below the sales level of April 2009, when no tax credit incentive was in place.

Kudos to the Realtors for acknowledging those difficult facts in the last paragraph. The drop in sales was predicted here at WPRI.com, but that doesn’t make it any less of a problem for Rhode Island’s feeble recovery. The Warren Group’s Vince Valvo told me last fall he expects these big drops all the way through this June.

How low will Chafee’s house go?

May 4th, 2011 at 11:10 am by under Nesi's Notes

Chafee's house at 54 Barnes St.

Bill McBride, who writes the must-read economics blog Calculated Risk, has been keeping an eye on Governor Chafee’s (thus far unsuccessful) efforts to unload the Providence house he and has wife bought in 2006.

As I reported yesterday, the Chafees have reduced the price twice since putting the home on the market in mid-February – it’s now listed for $799,000. McBride, who knows the housing market better than just about anybody, thinks they’re getting closer to what the market will bear:

When this house was first listed, I argued we’d see a price reduction. Although Case-Shiller doesn’t track Providence, house prices have fallen about 15% in Boston and 23% in New York – and that would suggest a selling price in the $700s for the Chafees’ home. So many homeowners are unwilling to price their homes realistically – at least the Chafees have been willing to reduce the price.

One of McBride’s commenters noted that the house has an appraised value of $801,200, so the Chafees are only now asking for what the city says it’s worth. Meanwhile, another commenter questions whether the local property market should be compared with those in Boston and New York:

I don’t know much about Boston’s real estate market. But why would you compare the real estate markets in Providence and New York? The economic base, job scene, inventory, relocation market, etc. is totally different. Providence once was one of America’s great manufacturing towns. Now, all it has left is government and education.

Providence has more in common with Detroit or Cleveland.


Chafee drops asking price for Providence home by $30,000

May 3rd, 2011 at 1:53 pm by under Nesi's Notes

Chafee's house at 54 Barnes St.

Doesn’t anybody want to buy Lincoln Chafee’s house?

After two and a half months on the market, this week the governor and his wife reduced the asking price for their 3,900-square-foot home on Providence’s East Side by another $30,000.

The Chafees are now seeking $799,000 for the seven-bedroom, three-and-a-half-bathroom property at 54 Barnes St.

That’s down 10% from the initial listing price of $889,000 they sought in mid-February. The Chafees had already reduced the price to $829,000 last month.

The Chafees bought the house for $939,000 in 2006, so selling at the current price would mean a $140,000 loss for the wealthy couple (before closing costs). They already tried to get rid the property in 2009 but didn’t wind up selling.

Home prices in the Providence-New Bedford area dropped 33% from the peak of the housing bubble in June 2006 through last December, according to a home-price index maintained by FNC Inc., a mortgage-technology firm. Prices on the relatively desirable East Side likely haven’t fallen by that much, however.

(photo: Residential Properties)

RI home sales plunge 32% from the boom years

January 27th, 2011 at 8:15 am by under General Talk

The Rhode Island Association of Realtors is out with its annual report on home sales in Rhode Island, and the message about 2010 is, hey, things have been worse:

Last year’s sales of 6,833 single-family homes increased 3% from 2008′s volume of 6,648 sales, the last year that sales volume was not affected by the tax credit on home sales. For purposes of comparison, when analyzing sales data since 1990, the median number of home sales per year was 7,600 sales.

There’s another important comparison left out of the press release, though.

In 2004, at the height of the housing boom, the number of single-family homes sold in Rhode Island totaled a whopping 9,982, according to the Realtors. So last year’s sales total of 6,833 was still a drop of 32% from the peak.

Expert: RI home values to stay low for a long time

January 13th, 2011 at 6:08 pm by under General Talk

Edward Sullivan is chief economist at the Portland Cement Association. (No, I’ve never heard of it either.) At this week’s International Building Show in Orlando, Sullivan offered a forecast for how quickly the housing market will recover in all 50 states.

The good news is, the housing market is set to make a fairly quick recovery – if you’re in North Dakota, South Dakota, Iowa, Nebraska and Oklahoma.

The bad news is, as a Nesi’s Notes reader you probably live in Rhode Island – where Sullivan says the housing market will make the fifth-slowest recovery in the whole United States, according to a MarketWatch article. Only Nevada, Michigan, California and Florida will take longer.

That list of states pretty much mirrors the monthly rankings of unemployment rates, which was one of the factors Sullivan used in his analysis. He also looked at mortgage delinquencies – nearly 5% of mortgages are delinquent in Rhode Island – and the decline in home prices, which have fallen 25.6% here from the peak.

Usually this is where I put in an “on the plus side” paragraph, but I’ve got nothin’. That stinks. Still, it won’t be a huge surprise to regular readers here; “RI housing market set for double-dip” was one of my first WPRI.com stories last July.

Rhode Island housing market still limping along

December 22nd, 2010 at 9:30 am by under General Talk

The Rhode Island Association of Realtors released its stats for November home sales this morning, and they showed the market remains quite weak now that the homebuyer tax credit has expired. Last November, 733 single-family homes were sold in Rhode Island; this November, only 505 were sold, a 31% drop.

Here’s a chart showing the year-over-year percentage change in sales, which shows just how steep the decline has been:

I say this is unsurprising because it’s pretty much what The Warren Group’s Vince Valvo predicted would happen when I spoke with him back in September. He expected “big drops” in sales all the way through next June because of the boost given by the tax credit. “This isn’t a question of hope, or wishful thinking, or doomsaying,” Valvo said then. “It’s math, pure and simple.”

I did see one somewhat bright spot in this month’s numbers. The number of pending sales – where a contract has been signed but the transaction hasn’t closed – was only down 6% year-over-year in November, compared with -23% in October and -30% in September. That would make sense, since the number of sales fell dramatically last December after the tax credit’s original expiration.

Expert: RI housing market not ‘in free fall’

September 27th, 2010 at 11:17 am by under General Talk

The Rhode Island Association of Realtors’ report on August home sales hardly portrayed a housing market in rude good health. The Warren Group’s Vince Valvo told me he expected “big drops in sales numbers probably every month through next June” – nearly a year from now.

A slightly more optimistic take arrived in my inbox this morning from Andres Carbacho-Burgos, an economist with Moody’s Economy.com whose forecasts are used by state budget officials. Everything’s relative, of course, but according to Carbacho-Burgos, the situation could be worse:

The numbers aren’t quite as bad as they look – you have to be careful about interpreting trends using year-over-year percentages. According to [the Realtors], sales rose from 526 in July to 548 in August. This is still low compared to numbers during the tax credit months, but it hardly suggests a housing market in free fall.

Also, keep in mind that the July and August numbers compare to July and August 2009, when the first homebuyers’ tax credit was in effect and people were starting to rush to buy before the purchase deadline expired in November. So while the sales numbers are still low and suggest a weak housing market, they don’t suggest continuing deterioration.

RI home market still in a deep freeze

September 24th, 2010 at 12:06 pm by under General Talk

Another month, another set of grim sales figures from the Rhode Island Association of Realtors.

There were 548 single-family homes sold in Rhode Island last month, the Realtors reported this morning. That’s a drop of 29% from last August, when 768 homes were sold shortly before the original Sept. 30 expiration date of the federal homebuyer tax credit. It follows the record 34% plunge in sales we saw in July.

If you’ve been reading Nesi’s Notes, you won’t be surprised by today’s numbers, dismal as they are. Pending sales – an indicator of how many transactions are in the pipeline – have been falling since March.

The state of the housing market is vital to the broader health of Rhode Island’s economy, and with unemployment still in double-digits, this isn’t a good sign. Vince Valvo, group publisher at The Warren Group, told me in an e-mail that he expects this trend to continue through the first half of 2011:

We’re going to see big drops in sales numbers probably every month through next June. That’s right – for almost another year.

Pending home sales have been down every month since the tax credit expired. That means that the number of homes that close a couple of months later can’t be anything but down, too. So right now, the math doesn’t support any scenario where home sales at least through December can be up from last year. You can’t sell more houses than you’ve got contracts for.

Once we get into next year, we’re going to be comparing sales against the artificially-inflated numbers that we got because of the tax credit. Remember those big gains that got reported right through June of this year? Well, there’s no way next year’s first half is going to be that robust. So every report at least through June of 2011 is going to show housing sales dropping.

This isn’t a question of hope, or wishful thinking, or doomsaying. It’s math, pure and simple.