Rhode Island Home Prices Drop 25 Percent

Home prices in Rhode Island plunged 25.8 percent in February from a year earlier, according to a report released Thursday by ""The Warren Group"":http://www.thewarrengroup.com, a provider of real estate data for the New England area. February is the fourth consecutive month that prices have dropped by 20 percent or more, the company said.
The median selling price for a single-family home in the state last month was $184,000, falling $64,000 from the median price a year ago. Year-to-date, The Warren Group said, median home prices in Rhode Island are down 24.3 percent.
Timothy M. Warren Jr., CEO of The Warren Group, explained that median prices for single-family homes in the state have been off by double-digit percentages for nine straight months now. ""These sharp price declines are much worse than the price drops Rhode Island experienced during the last housing downturn in the early 90s,"" Warren said.
Warren added that foreclosures are a major factor weighing down home values in the region. He said that prices won’t begin to level off until there are strong sales gains for several months in a row.
The number of single-family homes sold in Rhode Island in February was down 14.9 percent from February 2008. According to The Warren Group, it was the slowest sales pace for the month of February in 12 years. Newport County saw the largest decline in home sales during February, with an annual drop of 57.89 percent.
A total of 742 single-family homes sold in the state during the first two months of the year, a 12 percent decline from 843 a year earlier. Sales of REOs accounted for 14 percent of Rhode Island's single-family home sale transactions during the first part of 2009. Of the 742 homes sold in January and February, 104 were bank-owned properties.
Warren explained that the discounts on these properties are pulling down the state's median home price. ""Without the bank-owned home sales, the median home price would have been $15,000 higher,"" Warren said.
Meanwhile, condominium sales in Rhode Island fell to the lowest level in almost 12 years. Condo sales retreated 32.2 percent to 61 in February, down from 90 during the same month last year. Year-to-date condo sales are down 39.4 percent, The Warren Group reported. The median condo price fell 13.4 percent in February 2008, and for the first two months of the year, the median selling price is down 11.5 percent.