August 2, 2024 – The median price of single-family homes sold in the second quarter rose to $470,130, a 9.3% increase from a year earlier. Sales activity fell by roughly the same percentage, dropping 8.7% year-over-year.  Stiff competition caused by pent-up demand shortened the average time homes stayed on the market before going under contract to just four weeks.

Though the median price of multifamily home sales jumped 12.8% to $530,000, the hike in price did not dampen sales activity. With 18.5% more closed sales than the previous year, multifamily homes were the only residential property type to see increased sales from year to year. They also averaged the shortest number of days on the market, going from listing to contract in just 24 days. Once a popular entry point for first-time buyers who could use rental income to offset their mortgage payments, multifamily homes have become increasingly harder to purchase for first-time buyers due to increased competition from investors.

Given the skyrocketing costs of single-family and multifamily homes, condominiums offered prospective buyers a more affordable option for home ownership. The median sales price of condominiums, which can be heavily influenced by the types of developments on the market at a given time, fell by 3.5% to $352,250, in contrast to the upward trend of other residential property types. Sales activity remained relatively stable, falling less than one percent.

“We’re seeing inventory begin to creep up slightly and mortgage rates have fallen a bit lately, but we’re still not where we need to be.  Homeownership is out of reach for far too many Rhode Islanders.

“Fortunately, the Federal Reserve indicated in its July meeting that the first cut in its benchmark interest rate in more than two years could be on the table at its September meeting. That would be a positive step for prospective homebuyers as mortgage rates typically follow the trends set by the Federal Reserve,” said Sally Hersey, 2024 President of the Rhode Island Association of Realtors.

RI Realtors also noted that out-of-state sales are continuing to increase competition in the housing market, though those sales are beginning to decline. Last quarter, 23.4% of all residential sales were transacted with buyers from other states, compared to 26.7% in quarter two last year.  Unsurprisingly, Providence County attracted the most out-of-state buyers, given that most interstate sales came from neighboring Massachusetts. Newport County saw the second highest sales involving those from other states.

The percentage of Ocean State homes sold for $1 million or more to out-of-state buyers also fell from 49.1% in the second quarter of 2023 to 42% this year.

Data from the Rhode Island Association of Realtors represents all Realtor-assisted sales transacted through its subsidiary, State-Wide Multiple Listing Service. 

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