Newport County - Where are We Headed?

A lot of you are no doubt wondering these days, "What is going on with the real estate sales in Newport County?" Where is the market headed?   Let's take a look.

I update a spreadsheet each week that looks back at the last 6 months' worth of sales data in Newport County, on Aquidneck Island, and in each of the towns separately.   I then graph these figures, which include all types of properties (single and multifamily as well as condominiums, land and commercial).   I've been doing this since the end of 2007, when it became obvious that the market was changing dramatically. Above is a graph of that weekly activity in Newport County since October of 2007.
 
In real estate, marketed properties are split into three categories: those that are currently on the market (Listings: the Blue Line), those that are under contract and awaiting close (Pendings: the Fuchsia Line), and those that have closed their contracts (Solds: the Yellow Line).  In my charts, each of the "Solds" points represents the prior six months of sales.  You can even look at my chart as representing the future (Listings), present (Pendings) and past (Solds) of the real estate business, much like an Ebenezer Scrooge story with a real estate bent. How appropriate at this time of year!

Let's look at some of the highlights: 
The Blue Line (Listings) shows that people tend to list their homes more in the summer months because of Newport's appeal as a seasonal resort and retirement destination.

If you look at the Fuchsia Line (Pendings), you can see a similar cycle that peaks in the spring around May and June.  You can also see the upward blip caused by the Obama homebuyer tax credit in October 2009.

With the Yellow Line (6 months' worth of Solds), you can see the number of sales clearly descending from their giddy highs from pre-2007, back when even the lowliest cottage was marketed at close to half a million dollars. The peaks and valleys echo the Fuchsia Line (Pendings) three months later, which is the time it usually takes to close on a property. If you average things out, the market appears to be quite even, steadily maintaining a historically low - but consistent - level of activity. 

What's also worth noting is that the height and depth of the seasonal peaks and valleys seems to be lessening, i.e. lower peaks and shallower lows.  This is an indication that buyers are looking year-round instead of just in the summer; there is a pent-up demand for good homes at the right price, and buyers are waiting to pounce if they see an attractive property.  I see some going even within the first week of listing.
The number of listings is far outpacing absorption by the market.  Using 1300 as an approximate average number of listings and 300 as the approximate average six months' sales, we currently have over two years' worth of inventory on the market in Newport County.

As I mentioned in my first post about the Newport County Market, the overall number of sales is staying consistently level year over year, not trending up or down, but listings are more affordable now because of low interest rates and substantially reduced prices.  According to the National Association of Realtors, the nationwide affordability index is better than ever, with qualifying incomes for a median priced home dropping from $52,992 in 2007 to $33,744 in October of this year.

Although our properties may require higher qualifying incomes, the increased bang for the buyer's buck holds true here as well.  If the current economy has hit you badly, you may not be in the market. But if you're looking to buy, you may not find a better time!

HAPPY HOLIDAYS TO EVERYONE AT HOME IN NEWPORT COUNTY!!