A year ago, Rhode Island’s housing market began to decline amid news of rising mortgage rates and continued low inventory. A year later, sales are still down, while the median home price continues to rise year over year. However, third quarter home sales data recently released by the Rhode Island Association of Realtors shows sales activity has declined significantly, while median selling price appreciation for homes sold has weakened, the median price itself remains above that of the third quarter of last year. year.
RI Realtors reported that the number of single-family homes sold in Rhode Island from July to September fell 15.2% from the third quarter of 2022. The median price for those sales fell to $410,000 from $385,000. , an increase of 6.5%. Annual median price appreciation had increased by double-digit percentages in the first half of the year, but has since declined markedly.
In Warwick, a total of 331 single-family homes sold in the third quarter, a decrease of 37 from the third quarter of 2021. The median price was $356,000, an increase of 7.8% from the third quarter of 2021.
“Inflation and rising rates have been a game changer for the housing market. Fortunately, Rhode Island’s economic indicators are stable and unemployment is below the national average, so we don’t expect a drastic decline in Low housing supply should prevent prices from falling significantly, if at all, in the near future,” said Agueda Del Borgo, 2022 president of the Rhode Island Association of Realtors.
Given the recent rise in mortgage rates, homeowners have been reluctant to give up their low interest mortgages, which has increased the scarcity of homes for sale.
Growing demand from out-of-state buyers also aggravated the inventory shortfall. Buyers from outside Rhode Island, primarily Massachusetts, Connecticut and New York, accounted for 26.3% of all sales, down from 24.8% last year. In the luxury market for homes sold for $1 million, 50.5% were to out-of-state buyers, up from 50.2% in Q3 2021. Ninety percent of those buyers purchased in the coastal counties of Newport, Washington and Bristol.
As sales in the multi-family home market fell 27.8% from 12 months earlier, the median sale price climbed 14.7% to $430,000. Investors raised prices to take advantage of rising rents, with the highest prices being realized in Newport County.
Condominium sales fell 22.9% from Q3 2021 and the median sale price reached $320,000, a 17.7% year-over-year increase.