Warwick. R.I. – September 19, 2023 -- The median price of single-family homes in Rhode Island hit $450,000 in August, an 11.1% year-over-year gain according to recently released statistics from the Rhode Island Association of Realtors. While monthly median sales prices have not fallen year-over-year since January 2017, last month’s gain is the first time Rhode Island homeowners have seen a double-digit increase since June of last year.

In a contrasting trend, closed sales fell 25.2%, while pending sales put under contract in August fell 11.7%.

The supply of homes for sale increased to 1.8 months, up just slightly from July’s 1.7-month supply. With less than two months’ supply of homes available, Rhode Island’s home shortage continues to be more severe than the country’s overall. The National Association of Realtors cited a 3.3-month supply available in July, in the association’s most recent housing report. Both state and national inventory is still well below the five- to six-month supply which typically indicates a balanced market.

Rhode Island’s multifamily home sector also saw an increase in median price compared to August 2022 to $475,000 from $424,500, but like the single-family home market, sales continued to fall. Closing activity dropped 33.8% from the prior year and pending sales decreased 8.3%. Only 204 multifamily homes were on the market at the beginning of September, leaving a 1.7-month supply of properties for sale.

At $384,500, the median price of condominium sales rose 22.7 percent from the prior year while a 1.9-month supply offered consumers slightly more options than other housing types. Condominium sales fell 10.8% from August 2022 and pending sales fell just 1.4%.

The rate of decline in closed and pending sales activity fell significantly in the condominium and multifamily home markets, possibly a sign that supply and demand is becoming more balanced. However, low inventory fueled by Rhode Island’s lagging housing production and homeowners staying put to keep record-low interest rates, will likely keep prices high.

“Despite the fact that prices remain high, prospective buyers should be aware that many economists are predicting falling mortgage rates next year. If they can manage to secure a home now, and start building equity, they could have the chance to refinance next year. On the other side of the coin, sellers looking to relocate or downsize could use the huge gains in equity they’ve realized in recent years, to make a change that helps counter the increased rates,” said Bryant Da Cruz, President of the Rhode Island Association of Realtors.