Warwick, R.I. – June 22, 2023 – The median price of single-family homes sold in the Ocean State last month rose to its highest point yet, though year-over-year appreciation diminished. The median price of $427,250 represented just a two percent increase from May 2022. Home sales transacted through State-Wide Multiple Listing Service, a subsidiary of the Rhode Island Association of Realtors, also reflected a market with 17.8% fewer sales than a year ago.

According to the data, the supply of single-family homes for sale remained unchanged from the prior year at 1.5 months, still well below that of a balanced market. Pending sales, which gauge the pace of the market in the weeks ahead, fell 16%, continuing a 17-month trend of decelerating activity.

“Market conditions haven’t changed much other than the fact that the rampant escalation in prices that we saw over the past few years has finally started to slow. Rising interest rates have pushed buyers out of the market helping to ease demand slightly, but unfortunately, mortgage rate hikes are keeping prospective sellers in their homes as well, keeping much-needed inventory off limits. With these conditions, a balance between supply and demand will remain elusive,” said Bryant Da Cruz, president of the Rhode Island Association of Realtors.

Condo sales see double-digit gain

Buyers shut out of the single-family home market increased demand in the condominium market. In May, competition for limited inventory caused the median price of condominium sales to rise 19.7% to $392,500. Overall sales fell by 21.9% and pending sales dropped 28% from 12 months earlier.

At $440,000, the median price of multifamily home sales beat the median price of both single-family homes and condominiums. May’s median price reflected a 2.3% year-over-year gain. Closing activity dropped by 36.7% from 12 months earlier and pending sales fell by 38.1%.

“Investor demand for rental inventory is growing throughout the country and Rhode Island is no exception. Once a property comes on the market, it goes under contract immediately,” said Da Cruz, who explained that the average multifamily home sales process took only 24 days in May.