Realtors report critical shortage of homes for sale in December
Warwick, R.I. – January 20, 2022 -- Data from State-Wide Multiple Listing Service, a subsidiary of the Rhode Island Association of Realtors, shows that there was less than a one-month supply of homes available for sale at the end of December, far below the six-month supply that typically characterizes a market balanced between supply and demand. December was the second month this year that inventory levels fell below the one-month mark. With only 958 such listings on the market last month, the shortage of housing that has plagued the market in recent years, continued to create difficulties for homebuyers.
Sales activity continued to slow from the record-breaking 2020 volume, falling 4.3 percent from December 2020. Despite the decline however, the number of single-family homes sold last month remained the second highest on record for December.
The supply shortage fueled higher prices throughout last year, as buyers competed for a dwindling number of homes for sale. The median price of single-family homes sold in December was 15.4 percent higher than 12 months earlier, and held steady from the prior month, at $375,000.
Most of the same trends held true for the condominium market. The median sales price of condominiums sold last month soared 24 percent year-over-year to $309,900, owing to a 45.6 drop in inventory. The number of closings fell by 12.9 percent. Pending sales however, increased 7.1 percent, an indication that sales could begin to rise in the first quarter of the year.
“Sales activity has slowed from 2020, but the housing market is still moving along pretty aggressively. In the latter part of 2021, we did start to see some buyers take a break from their home search, due to the intensity of competition and buyer fatigue. The expectation of higher interest rates, however, could lead many of those prospective buyers to jump back into the market, in the hopes that they can secure a home at today’s lower rates,” said Agueda Del Borgo, president of the Rhode Island Association of Realtors.
Through the end of the year, multifamily homes remained a hot commodity, due to factors like rising rents and the ability to have rental income offset the mortgage. At $390,000, the median sales price of multifamily homes in Rhode Island reached the highest monthly price on record, rising above those of both single-family homes and condominiums.
Closed sales of multifamily homes rose 3.8 percent last month and pending sales – those sales expected to close in January or February - increased 11.1 percent. Inventory fell from January 2020 by 48 percent.
“Rhode Island’s housing market remained extremely active, right through the end of the year and I don’t expect any significant change in the foreseeable future. The same trends are still in force – we have pent-up demand but an extremely low supply. It will take some time to see a change in direction on either end, especially in tackling how to get more inventory into the pipeline.” said Del Borgo.
Months Supply: Click here for interactive display
About the Rhode Island Association of REALTORS®
The Rhode Island Association of REALTORS®, one of the largest trade organizations in Rhode Island with more than 5,000 members in nearly 1,000 offices, has been serving Rhode Islanders since 1948. Advocating for Rhode Island's property owners, the Rhode Island Association of REALTORS® provides a facility for professional development, research and exchange of information among its members and to the public and government for the purpose of preserving the free enterprise system and the right to own real property. Last year, RI Realtors transacted $6.9 billion in residential real estate sales and $7.1 billion in total sales and rentals including commercial transactions.
The Association is one of more than 1,500 boards and associations that comprise the National Association of REALTORS® (NAR). The National Association of Realtors®, “The Voice for Real Estate,” is America's largest trade association, representing over 1.5 million members involved in all aspects of the residential and commercial real estate industries and who subscribe to a strict Code of Ethics.
REALTOR® is a federally registered collective membership mark which identifies a real estate professional who is member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics.