R.I. home prices continue to climb, sales of single-family homes slow
Warwick, R.I. – September 16, 2021 --The median price of single-family homes sold in Rhode Island reached a new peak last month, according to data recently released by the Rhode Island Association of Realtors. At $390,000, the median sales price rose 17.1 percent from 12 months earlier and 1.6 percent from the previous month. Prices have not fallen from the prior year since January 2017.
Closed transactions however, fell in August, marking the second consecutive month that activity in the housing market has showed signs of moderating. Sales fell by 5.3 percent year-over-year, helping to slightly alleviate the shortage of inventory, though the market still clearly favors sellers.
The number of homes available for sale was 16.9 percent less than in August of 2020 but while still lower than last year, slowing sales has helped lessen the impact. Earlier this year, inventory fell as much as 64 percent from the prior year, but that deficit started to significantly drop in June. As of May, there was less than a one-month supply of single-family homes for sale. That number rose to 1.8 months in August. A six-month supply is considered to be a market balanced between buyer demand and listing supply.
“We haven’t seen any sign of moderation in sales activity in quite some time, but it appears that a severe lack of inventory in the spring left many buyers unable or unwilling to compete in the frenzied market. We’re seeing more people list their homes now and more buyers are pursuing their home search again, spurred on by the continued low interest rates,” said Leann D’Ettore, President of the Rhode Island Association of Realtors.
The median sales price of multifamily homes also saw an all-time high last month, rising to $382,500, a 23.4 percent increase from the prior year. Sales also continued at a feverish pace, increasing 26.9 percent. Annual increases in both median price and sales have reached well into the double-digits each month since February.
“Multifamily homes have been extremely popular for both first-time buyers looking to use rental income to lower their monthly obligation and for investors looking to capitalize on rising rents. Investors know that the availability of rentals is scarce and there’s not going to be an abundant supply of them anytime soon. That’s why they’re such an attractive commodity,” said D’Ettore.
More tempered growth was seen in the condominium market last month. The median sales price of all condo sales rose 6.6 percent to $271,800 and the number of closed transactions increased 7.2 percent from August 2020. The number of listings fell by 35.6 percent.
Out-of-State Buyers Still a Factor
An analysis of out-of-state buyers during the months of June through August shows a steady increase in buyers from other states. Historically, the coastal communities of Newport, Washington and Bristol counties attract the most buyers from other states. This year, they accounted for 39.9 percent of total sales in Newport County, 35.5 percent in Washington County and 31.5 percent in Bristol County. Providence County attracted 23.7 of its buyers from other states and 17.2 percent of Kent County buyers hailed from outside of Rhode Island.
In the luxury market, 59.2 percent of Washington County sales of high-end properties - those that sold for $1 million or more - came from outside of Rhode Island, while 55 percent of Newport County’s and 47.2 percent of Bristol County’s luxury sales involved out-of-state buyers.
“Rhode Island home prices have gone up, but properties are still a bargain compared to other resort areas. Our cities and towns are also more affordable than larger urban centers like New York and Boston. Outside of our borders, we’ve become known for coastal and cultural amenities that fortunately, don’t come with a big-ticket cost compared to other locations. With prices rising everywhere and remote work now more available, we’re poised to see even more people moving to the Ocean State,” said D’Ettore.
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.