Warwick, R.I., November 30, 2016 — The median price of Rhode Island’s single-family home sales rose for the 12th consecutive month in October. A year-over-year gain of 4.6 percent resulted in a median sales price of $235,000, the highest seen in the single-family home market at the start of the fourth quarter since 2007. The Rhode Island Association of Realtors also reported an increase in sales activity in the single-family home market last month of 4.8 percent.
With the exception of this past February, the number of single-family homes available for sale has fallen from the previous year every month since December 2014, the Realtor Association reported. As of last month, Rhode Island had a 4.4-month supply of single-family homes for sale – less than the six-month supply considered by industry experts to signify a balanced market.
The diminishing supply of inventory has started to restrain sales. Though there were more October sales this year than last, Realtor statistics show that sales under contract have remained relatively flat for the past four months, rising just 1.4 percent in October. The leveling off of pending sales offers evidence that sales may begin to slow toward the end of the year.
“There’s no question that Rhode Island’s housing market made significant strides this year. Sales have skyrocketed, but as a result, the supply of homes to choose from has declined. Unless we start seeing more properties put up for sale, next year’s market may be more tempered. However, we might see more buyers entering the market due to the recent rise in interest rates, and if that happens, given the restrained inventory, a more significant spike in prices could occur,” said Brenda Marchwicki, President of the Rhode Island Association of Realtors.
Multifamily sales soared in October and show no signs of slowing down toward the end of the year. Sales rose 26.9 percent last month while pending sales increased ten percent. There was a 4.8-month supply of multifamily homes for sale in October, which, like the single-family home market, suggests a market that favors sellers. The median price of those sales held relatively steady, increasing just 1.1 percent to $180,000.
In contrast to single-family and multifamily home sales, sales activity in the condominium market subsided in October, falling five percent from October of 2015. The median sales price rose by five percent to $218,000, the highest monthly median sales price in the condo market since June of 2015. A 26.7 percent decrease in foreclosure and short sales in October likely contributed to the jump in median price. RI Housing’s Renewed Homes Program, which helped first-time buyers purchase distressed properties, suspended applications at the end of September, which may account for the drop in distressed sales. Condominium foreclosure and short sales had shown a year-over-year increase for the four months prior to October.
“It will be interesting to see what 2017 has in store for us. Rhode Island’s real estate market is back on solid footing. As long as the economy stays on track and we continue to make gains in employment, we shouldn’t see any drastic changes in the year ahead,” Marchwicki commented.