R.I.’s housing market slows considerably in April
Warwick, R.I. -- May 18, 2023 – Rhode Island Realtors transacted just 524 single-family home sales in April, 30% less than April of 2022. The decline in activity was accompanied by a significant drop in the rate of year-over-year appreciation in the median price. At $425,000, last month’s median price was just 1.2% more than that of April 2022, a sign that prices are stabilizing. By comparison, year-over-year median price appreciation rose by ten to twenty percent in each month of the first half of 2022 according to data from State-Wide Multiple Listing Service, a subsidiary of the Rhode Island Association of Realtors.
Lack of inventory remains the main problem in the market, with increased mortgage rates stalling more sales by causing those who refinanced at low rates to rule out a home sale in favor of staying in their current home. In April, only 957 single-family homes were for sale in Rhode Island, a 14.2% decline from those available for sale 12 months earlier.
While pending sales were 18.1% lower than 12 months prior, the rate of decline has improved since the beginning of the year when pending sales hit 40% lower than the previous year. Pending sales - those under contract but not closed by the end of the month - are an indicator of sales activity in the months ahead.
“Though we don’t expect any significant drop in prices due to the low inventory available, we are seeing skyrocketing price hikes beginning to calm down. That’s good news for those shut out of home ownership due to affordability constraints. Mortgage rates have shown some decline recently which should also help buyers get their foot in the door. However, more homes on the market are desperately needed to give buyers more options,” said Bryant Da Cruz, 2023 president of the Rhode Island Association of Realtors.
The slowdown in condominium sales was even more pronounced than that seen in the single-family home market, with closed transactions falling 36.8% year-over-year. The median price of condominiums sold in April rose 6.3% to $340,000, and the number of listings on the market fell by two percent. The lull in activity will likely continue in the coming months as pending sales fell 26.4%.
Sales activity fell 33 percent and pending sales fell 42 percent in the multifamily home market. The median price of multifamily homes held steady at $450,000 for the third consecutive month, which represented a 5.9% gain compared to April 2022. Listings fell by 32.2% with only 116 multifamily homes available for sale statewide.
Vast numbers of out-of-state buyers competing for the scarce amount of inventory available are also weighing on Rhode Island’s housing market. In the first quarter of 2023, nearly one in four residential homes sales involved buyers from other states. According to a report from the National Association of Realtors of markets with a population of 150,000+, the Providence – New Bedford – Fall River Metropolitan Statistical Area had an inbound move rate of 50.9%. Moving forward, that trend should shift, as moves sparked by remote work lessen, and out migration increases by retirees. NAR data also relays that the typical baby boomer, now the largest segment of homebuyers, typically move 90+ miles to a retirement destination.
“While the market is extremely tight right now, a shift is on the horizon. Rhode Island has one of the highest percentages of elderly citizens in the country. As they move toward retirement, more homes should become available for sale over the next decade. In the meantime, we have a dire shortage now. It’s critical that we begin to build more homes for our buyers with immediate housing needs,” 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.