Market Trends

Realtors report effects of pandemic in April’s R.I. housing market

Warwick, R.I. – May 14, 2020 – Roughly two months after the news of the coronavirus spread to the masses, the Rhode Island Association of Realtors shared news of a housing market which began to show signs of the closed economy last month. April home sales data released today show a continued rise in median sales price compared to April 2019, accompanied by an anticipated slowdown in sales.

Year-over-year data by market sector
In the single-family home market, sales fell by 9.5 percent year-over-year while the median sales price rose 7.5 percent to $295,500. The number of homes for sale dropped 32.1 percent, leaving just 2.5 months of inventory available, a clear sign of a seller’s market.

Among condo sales, closing activity fell 36.1 percent from a year ago last month, while median price jumped to $249,900, an 8.9 percent hike. Listings fell by 28 percent.

The multifamily home market showed a 19.9 percent drop in sales compared to April 2019 and a 14 percent hike in median price. Like the single-family home and condo sectors, multifamily home listings fell markedly, down 29.3 percent as COVID-19 restrictions squelched many sellers’ plans to sell.

“No matter how we view the numbers, we’re not able to answer the question of the day, ‘What’s in store for the real estate market? The housing market is directly linked to the economy and until we know how the summer is going to play out, there’s no way to predict what lies ahead. Thankfully, we started the year with a strong start and plenty of pent-up demand so we’re hopeful that will resume quickly as the economy reopens,” said Shannon Buss, 2020 President of the Rhode Island Association of Realtors.

March to April Comparison
Typically, Rhode Island Realtors release only year-over-year sales figures to minimize the variations caused by seasonality which reduce the data’s relevancy. The association released month to month statistics today however, in an attempt to gauge the short-term effect of COVID-19. Single-family home sales decreased just slightly from March to April as did median price and inventory.

While large swings in data from March to April missed the single-family home market, condo sales dropped more significantly, down 31.5 percent. The median price of those sales rose seven percent and the number of listings on the market remained relatively stable with just two less condos available in April than in March.

Sales activity in the multifamily market fell nearly 18 percent and the median sales price stayed the same at $285,000 for both months. In contrast to the other sectors, inventory rose from March to April from 325 to 330.

A national economic survey of Realtors conducted May 3rd and 4th by the National Association of Realtors indicated that 77 percent of potential sellers were preparing to sell their home once stay-at-home orders were lifted. The survey also stated that nearly three out of four of the survey respondents who were working with sellers reported that their sellers were not reducing prices to attract buyers.

“The National Association of Realtors is reporting some positive outlooks for the future so that’s optimistic. Still we have to keep in mind that each area is different. Rhode Island has a good percentage of second and vacation homes so we need to see how our state will handle the summer crowds before we can determine where our housing market will ultimately land,” commented Buss.

See accompanying sales statistics and infographic here.

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