Rhode Island Home Sales Fall, Prices Continue To Soar

PROVIDENCE, RI — Rhode Island's home prices continue to skyrocket, according to the latest data from the Rhode Island Association of Realtors. In August, the median price of a single family home was $390,000, while the median price for multifamily homes hit an all-time high.

The median price was up 1.6 percent from July's median price of $384,000, and 17.1 percent higher than the same time last year.

While prices have only climbed throughout the coronavirus pandemic, sales are seeing some declines. For the second month in a row, closed sales transactions fell, down 5.3 percent year-over-year.

"We haven’t seen any sign of moderation in sales activity in quite some time, but it appears that a severe lack of inventory in the spring left many buyers unable or unwilling to compete in the frenzied market," said Leann D'Ettore, the association's president. "We’re seeing more people list their homes now and more buyers are pursuing their home search again, spurred on by the continued low interest rates."

The slight decline in sales offered some relief to the continued shortage of inventory, the association said. While the number of homes on the market last month was 16.9 percent lower than August 2020, the extreme inventory shortage seems to be waning.

In May, there was less than one month's worth of homes on the market, a number that rose to 1.8 months last month. That's still well below what's considered to be a balanced market, which would have six months' worth of homes for sale.

The median price for multifamily homes, meanwhile, reached an all-time high in August. At $382,500, the median price was 23.4 percent higher than the year before. While single-family home sales slowed, multifamily homes continued to sell at "a feverish pace" in August, RI Realtors said, up be 26.9 percent year-over-year.

"Multifamily homes have been extremely popular for both first-time buyers looking to use rental income to lower their monthly obligation and for investors looking to capitalize on rising rents," D'Ettore said. "Investors know that the availability of rentals is scarce and there’s not going to be an abundant supply of them anytime soon. That’s why they’re such an attractive commodity."