By Lynn Arditi

Real estate agents and economists say the housing market nationwide this year is shaping up to be about the same as it was last year -- and that, they agree, is pretty darn good. In Rhode Island, the numbers are even ahead of last year. The Rhode Island Association of REALTORS today is reporting sales and prices of single-family houses during the first quarter of this year were ahead of where they were during the first three months of last year. Sales of existing single-family houses climbed 10 percent, while the median sales price rose 17 percent, to $164,800. Nationally, Realtors reported that January and February, which were relatively mild this year, were record-breaking months for housing sales. "Normally in January and February you're trudging through a foot of snow to get to the house and they don't sell a lot," says David A. Wyss, chief economist at Standard & Poor's Corp. in New York. "The first quarter had enormous sales nationally . . . [and] part of it was the weather." Mild weather was just the icing on the cake. Low mortgage rates, an aging baby-boom population and a weak stock market all helped drive up house sales. "Given that the stock market is doing rotten," Wyss says, "housing is looking like a better and better investment." As the baby-boom population ages, more are buying homes, as well as second homes. Nationwide, sales of new second homes have roughly doubled in the last five years. Sales of starter homes are also on the rise in parts of the country with more established immigrant populations. Studies have shown that the rates of home ownership among immigrants who have been in the country 15 years or more are actually higher than the rates for other Americans. By the end of last year, 68 percent of all U.S. households owned their homes. All of this helps to explain why, during this slow economic recovery, real-estate agents and economists say another year like last year is a good thing. The National Association of REALTORS is forecasting a barely detectable 0.3-percent increase in existing home sales nationally in 2002, with new home sales falling slightly. Low mortgage rates are expected to help. Around the country last week, mortgage rates edged down amid speculation that the Federal Reserve -- which cut rates 11 times in 2001 -- will hold off, at least for now, on a rate hike. The average rate on a 30-year mortgage remained below 7 percent, compared to 7.14 percent this time last year. In Rhode Island, the pace of single-family house sales during the first quarter remained largely unchanged from a year earlier, with houses on the market an average of 64 days, compared to 65 days during the first quarter of 2001. "That's close to as good as it's going to get," says Sharon Steele, president of the Rhode Island Association of REALTORS. "If you sold where you live today, what's the probability you could get out in 45 days? Not very good . . . It is never ever, ever going to get below 45, and it's probably going to hover around 60." (Seasonal fluctuations make it impossible to accurately compare Rhode Island's most recent data with the prior quarter because the Rhode Island Association of REALTORS does not make seasonal adjustments.) Single-family home sales in Providence, Warwick and Cranston were all up from a year earlier, as were the prices. In Barrington, the pace of sales slowed in the first quarter to 62 days on the market, compared to 53 days a year earlier -- but the prices climbed. The median price of a single-family house in Barrington during the first quarter rose to $242,000, up from $225,000 a year earlier. The data is on such a small scale, however, that even tiny blips can drive the totals up or down, making identifying trends difficult. For example, on the East Side of Providence, the median price of single-family houses during the first quarter fell 21 percent, to $299,000, compared to $380,000 a year earlier. But if you think that means it's getting cheaper to buy a house on the East Side, you're likely to be disappointed. Steele, the association's president, who sells homes on the East Side, says that prices dropped because three houses sold for under $100,000, which "never happens on the East Side." "Were it not for those three sales," Steele says, "the price would have gone up like everything else." The average price of East Side houses currently on the market, Steel says, is $691,370; for 12 pending sales, the price is $424,150. And the houses are selling faster, too. Single-family homes on the East Side sold, on average, in 53 days during the first quarter, down from 77 days a year earlier. If the housing supply continues to dwindle, Steele says, that could further squeeze demand and, in turn, drive up prices. And Steel's numbers suggest that may well happen: On April 1, 2001, the number of single-family houses on the market in Rhode Island was 2,176. On the same date this year, that figure had fallen to 1,801. "The message now," Steele says, "is: This is a fabulous time to market your house because you have built up fabulous equity." That is, of course, if you can find another house to buy.

Published 4/23/2002