Inventory Grows in R.I. Housing Market
Warwick, R.I. – October 18, 2023– While the supply of single-family homes on the market remains far below the five- to six-month inventory that typically indicates a balanced market – the past few months have shown slight improvement. Inventory rose to a two-month supply in September, a change for the better from earlier in the year when it had fallen to 1.2 months.
While both closed and pending sales were down from a year ago, the rate of decline lessened. A report released by the Rhode Island Association of Realtors today highlighted a 15.2% year-over-year drop in closed sales for single-family homes. While closing activity remained below last year, September data showed a healthy improvement from the 39.1% decline seen at the beginning of the year. Likewise, pending sales under contract fell 10.3% from September 2022, marking progress from the 30.1% year-over-year drop at the beginning of 2023.
While sales activity has slowly improved, home affordability has not. Rhode Island’s housing market continued to break records at the end of the third quarter, with the median price of single-family homes rising 9.4%, hitting $455,000 in September. Mortgage rates now hovering around eight percent are keeping more prospective buyers on the sideline.
“While costs are up, real estate remains one of the best long-term investments. In addition to providing a place of shelter and comfort, it’s a great wealth builder. That’s why it’s so important that we find avenues to give everyone access to home ownership,” said Bryant Da Cruz, President of the Rhode Island Association of Realtors.
In other areas of the market, at $379,900, the median price of condominium sales was 10.3% higher than that of September 2022, while closed and pending sales fell 14.6% and .4%, respectively. While sales of multifamily homes fell by 12.3% year-over-year, and pending sales dropped by 14%, the median price of sales eclipsed other areas of the residential market at $477,500.
Third quarter trends
Throughout the third quarter, condominiums saw the largest gain in median price from the prior year, followed by multifamily home, and then single-family home sales. Out-of-state buyers continued to create elevated competition in the market, accounting for just over one-quarter of all residential property sales. Massachusetts buyers comprised the bulk of out-of-state sales, making up 14.3% of all Rhode Island sales with most Massachusetts buyers coming from Bristol, Norfolk, Middlesex and Suffolk counties. Among sales of $1 million or more, 45% of buyers hailed from other states, primarily Massachusetts, Connecticut and New York.
“While we have less sales than we’ve had in years, we also have a higher percentage of buyers from other states. Whether moving to find a lower cost alternative to a current home or for an investment or vacation property, Rhode Island continues to attract interest,” said Da Cruz.
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.