Warwick, R.I. – July 20, 2022 – Second-quarter home sales data released today by the Rhode Island Association of Realtors and its subsidiary, State-Wide Multiple Listing Service, displayed a continued trend of waning sales that started in the third-quarter of last year. Closed transactions fell 14.1% in the second-quarter of this year from the same time in 2021.

Despite slowing sales, prices continue to climb due to the severe supply shortage that began years before the pandemic, and which has worsened since. The median price of single-family homes rose 14.4% to $422,000 in quarter two.

The slowdown in activity has increased the state’s housing supply slightly. However, insufficient home construction, a reluctance to sell by homeowners who locked into historically low interest rates before the recent rate hikes, and an increasing influx of out-of-state buyers will continue to hamper supply, so a sharp change in price trends is unlikely.

Residential property sales from out-of-state buyers accounted for 27.4% of sales last quarter compared to 25.9% during the same period in 2021. Transactions of $1 million or more however, involved fewer buyers from other states, down to 41.7% of all luxury sales from 46.8% last year.

“The highly competitive nature of today’s market and the resulting worsening affordability is reducing sales, which in turn, decreases the economic benefits that come with each home purchase. Thankfully, the inventory shortage has shined a much-needed spotlight on the housing crisis, helping everyone to understand that a concerted effort is needed to get building and rehabilitation projects underway as soon as possible,” said Agueda Del Borgo, President of the Rhode Island Association of Realtors.

Del Borgo further explained that Rhode Island’s real estate industry accounted for 17.8% of the state’s gross state product in 2021, or $11.7 billion.

Second-quarter condominium sales saw a drop of 19.1% year over year, while the median price of those sales rose 11% to $322,000 from a year ago.

Multifamily home sales fell 18.9% and the median sales price rose to $425,000, a 19.7% increase. The multifamily home segment flourished last year as investors, often armed with cash, bought up properties to capitalize on rising rents.

Unlike the last market downturn which was marred by week mortgage requirements and subprime lending, the number of distressed properties – foreclosures and short sales - fell among single-family and multifamily homes and stayed the same among condominium purchases.

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