Starter homes scarce in R.I.'s housing market
Warwick, R.I. - March 17, 2023 - February’s single-family home median sales price of $384,000 was 4.4% higher than that seen a year earlier according to statistics released by the Rhode Island Association of Realtors. The data, which represents all Realtor-assisted sales transacted through State-Wide Multiple Listing Service, a subsidiary of the Association, also showed a 29.4% drop in sales year-over-year, and a 21.2% decrease in contracts in progress but not closed as of the end of February.
Despite a slight increase from a year ago, Rhode Island’s supply of single-family homes for sale remains critically low with just 864 single-family homes listed for sale as of mid-March. The market is particularly impacted in the starter home sector. Only approximately one quarter of available listings were for sale under February’s median price.
“Our median sales price continues to grow in large part due to having more move-up homes than starter homes on the market. Prospective buyers trying to break into the market for the first time are facing an uphill battle with few choices and interest rates higher than we’ve seen in several years. That said, rates are still lower than the 50-year average of more than seven percent and homeowner equity is holding its own,” said Bryant Da Cruz, 2023 President of the Rhode Island Association of Realtors.
The median price of condominiums sold last month remained stable, rising just one percent from 12 months prior while sales dropped 43.5%. Condos under contract last month also fell 37.3%. Though typically a strong alternative for first-time buyers shut out of the single-family home market, the condo sector offered little relief. As of mid-March, only 238 condominiums were listed for sale throughout the Ocean State and only 51 of those were below February’s median price of $308,000. Less than half were priced below $500,000.
The multifamily home market saw the largest increase in median sales price last month due to high investor demand for rental properties. A 9.8% year-over-year gain resulted in a median sales price of $450,000. With only 147 listings statewide, closed sales fell 52.7% and pending sales dropped 37.7%.
“Given that housing is such an important economic driver, we’ll be cautiously watching what happens to the rates following the recent bank closings as we head into what is typically our busiest time of the year. Many economists are now predicting a lower-than-expected rate increase when the Federal Reserve meets next week. Mitigating mortgage rate increases is always good news for the housing market,” commented 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.