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Providence, RI - Newest New Home Sales Numbers Suggest Market Fall is Slowing

Posted on: Feb 06, 2012 09:36:16 AM

The Providence, RI market saw a drop in new home sales year-over-year in November, but the decline was less than the year-over-year decline in October. New home sales moved from 37 a year earlier to 15 after the figure moved from 30 in October 2010 to eight in October 2011.

A total of 221 new homes were sold during the 12 months that ended in November, down from 243 for the year that ended in October.

Moving south from a year earlier, new home sales in November 2011 made up 1.9% of overall housing sales, while the year-ago figure was 3.4%. Following a year-over-year decline in October, sales of new and existing homes also sank year-over-year in November.

Pricing and Mortgage Trends

In November, the average price of newly sold homes fell 12.4% year-over-year to $263,377 per unit. This drop is a swing down from an 18.6% lift in October year-over-year.

In contrast to new home prices, there was an increase year-over-year in the average mortgage size on newly sold homes. The average mortgage size saw a 2.3% rise year-over-year to $194,300 in November. Average mortgage size on new homes went from $183,188 in October 2010 to $267,010 in October 2011. Of the overall sale price, the percentage that was being financed gained 10.6 percentage points year-over-year to 73.8% in November 2011. This was another hike after October 2011 when there was a 13.5 percentage point boost from a year earlier.

Other Market Trends

Sales of attached units, as a percentage of new home sales, have climbed from last year while sales of single-family homes have dipped. The share of new home sales belonging to attached units grew from 21.6% of sales in November 2010 to 26.7% of sales in November 2011. Conversely, the share belonging to single-family homes dropped to 73.3% of sales from 78.4% of sales.

For all new homes sold, the average unit size slid 25.2% year-over-year to 1,554 square feet in November 2011. A decrease in both the average size and price of newly sold homes was also seen in October 2011 when the average size increased 4.2% to 1,786 square feet.

Foreclosures and real estate owned (REO) sales remained a drag on the market. Out of all existing home sales, foreclosures combined with REO sales accounted for 34.6% of sales. In November 2010, they made up 37.8%. The percentage of existing home sales involving foreclosures went from 16.3% in November 2010 to 17.3% in November 2011 and REO sales as a percentage of existing home sales dipped to 17.4% from 21.5% a year earlier.

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