Too Many, Too Few. The story of condo sellers, condo buyers on the East Side of Providence.

There was an article published in the Providence Journal yesterday that reported the results of the 4th quarter condo sales for 2008.  For closed transactions, the number of sales were down -17.4% and the median price -21.1% from $355,000 to $280,000.  Days on market increased substantially +65% to 141 days. 

Not a pretty picture.

So how are we doing now?  Chris and I like to look at pending transactions because we feel that they are most reflective of the direction of the market NOW, not 3 months ago.  So let's take a peek:

January 2009 Pending Sales for Condominiums - East Side of Providence

In January, there were 7 pending sales of condominium homes on the East Side compared to 10 pending transactions for the same period last year.  Of these 7 properties, the highest list price was $589,000 while the lowest was $89,900.  Two condos on Cole Avenue and the lowest priced of the 7 were foreclosure, bank owned properties. 

Listing Address	Listing Price	Sq Ft.	Beds/Baths	Days on Mkt	Sale Type	Photo	Neighborhood	Comments
124 Blackstone Blvd	269,000	980	2 beds, 1.1 baths	285	Conventional		Blackstone on the Blvd	Established association.  Desirable location.
170 Prospect Street	160,000	647	1 beds, 1 baths	9	Conventional		College Hill Prospect St. near University Heights	NearBrown University & Whole Foods Market
47 South Angel St	289,000	2400	3 beds, 2.1 baths	0	Conventional		Wayland Square	New Construction -sold before print
12 Cole Ave #1	114,900	1000	2 beds, 2 baths	107	Foreclosure		Wayland Square Area near Blackstone Blvd	3 unit Multifamily building - small condo association
14 Cole Ave #2	89,900	865	2 beds, 1.1 baths	270	Foreclosure		Wayland Square Area near Blackstone Blvs	3 Unit Multifamily building - small condo association
275 Angell St	589,000	1732	3 beds, 2 baths	154	Conventional		College Hill. Near Hope Street	Historic Building.  Luxury finishes.
79 Taber #2	499,000	2250	3 beds, 3.1 baths	209	Conventional		Wayland	Newly Revovated.  Luxury Finishes.

Our take on January 2009 Condo Sales on the East Side:

Hold on to your hats!

This category is down, down, and then some.....and probably more to go.

What you have in this segment are an abundance of resales from small condo associations from the condo conversion boom of 2004 - 2005. The one on Cole Avenue was a foreclosure of two such units.  From having viewed these units when they first went on the market, I know that there were no upgrades made to the buildings previous life as being an apartment building.  They were just originally put on the market as "condos" but still looked like apartments and were priced at were then "good values" for home ownership.  Now they went to foreclosure.  The smaller unit was priced at almost double its current listing price, starting at $172,900 to the current list price of 89,900.  Hard to say who bought these as they would appeal to both a first time home buyer and an investor - at current rents, both units would provide positive cash flow.

Currently there are 90 Active Condos on the market, yes, 90. Over half of them are condos priced under $300,000, a full 51 of them.  That sure is a lot to chose from. The inventory in this segement cannot sustain the slow rate of sales.  I predict that prices in this segment will have to come down substantially.  A buyer just has too many options and no urgency.  That means lower prices when high supply meets low demand.  Last year there were 117 condos in total sold on the East Side and 71 sold under $300,000.  So roughly we are looking at a year's worth of inventory since the sales rate in this category has also slowed.  More inventory should hit the market in spring, further driving down prices. 

For the higher end condos that went pending, 79 Taber and 275 Angell Street. Both saw reductions from their initial asking price of $130,000 and $150,000 respectively, both 79% from the original asking. Condos that are new or have high level finishes still hold appeal although not at the prices once commanded as evidenced by the two examples above. 

Unless inventory can correct itself, we predict that condos still have more downside.

Still not a pretty picture. In fact, you could say, just downright ugly.

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