Warwick, R.I. – August 10, 2023 -- A review of Rhode Island’s second quarter home sales reveals a continued increase in the median sales price of residential homes. At the same time, sales activity continued to drop compared to the prior year. The Rhode Island Association of Realtors released the sales data today, along with statistics that show buyers from other states remain a significant factor in Rhode Island’s housing market, particularly for homes priced at one million dollars or more.

Data from State-Wide Multiple Listing Service, the listing information exchange owned and operated by the Association, shows that at $430,000, the median price of single-family home sales in the second quarter saw a 2.4% year-over-year increase from the prior year. In the other sectors of the residential market, the median price of multifamily home sales saw a 10.6% gain, to $470,000, and the median sales price of condominiums saw the highest jump, rising 13.7% to $363,750.

When comparing pre-pandemic data from the second quarter of 2019, residential home sales have seen a five-year gain in median price of 47.3% for single-family homes, 56.8% for condominiums and 78.7% for multifamily homes. While the median price reflects the midpoint of sales and not specific appreciation for individual homes, it does reflect movement in the market overall.

“On the one hand, it’s safe to say that the majority of homeowners have seen a significant increase in home equity in recent years, but on the other hand, that accumulation of wealth is hard to attain for those struggling to buy a home in this competitive market,” said Bryant Da Cruz. 

The shortage of inventory that has existed since before the pandemic continues to stall sales. When comparing quarter two sales from 2022 and 2023, closing activity fell by 20.1% for single-family homes, by 39.8% for multifamily homes, and by 25.7% for condominiums.

“Rising mortgage rates have pushed some prospective buyers out of the market due to affordability issues and inventory has tightened further by homeowners unwilling to give up current mortgages that have lower interest rates. Competition from buyers from outside of Rhode Island has also further depleted the supply,” said Da Cruz.

Buyers from other states accounted for 26.7% of all residential sales, down just slightly from 27.2% in the second quarter of last year. In the $1 million and over market, 47.3% of sales were made by out-of-state buyers compared to just 41.9% from April through June of last year.

“Though home price appreciation has slowed, bidding wars continue and most properties are still selling above list price because the supply is so constrained. If homeowners are thinking about moving, they’ll likely see impressive profits when they sell. And while mortgage rates are now near the 30-year average instead of the historic lows we saw recently, many economists expect them to drop next year so refinancing could be a strong possibility,” commented Da Cruz.