With the rising median price and median home prices, the Rhode Island housing market is likely to be an auction market. The price rise and the limited supply suggest that sellers could benefit from negotiations. While the data shows an increase in the median price of homes, it’s important to recognize that the appreciation rate has decreased year-over-year.
It is clear that, even though prices aren’t falling significantly, the market is seeing moderate price increases. Buyers and sellers must be aware of this trend when making major decisions regarding housing for Rhode Island.
How do you feel about the Rhode Island housing market?
The most recent information from the Rhode Island Association of Realtors and the State-Wide Multiple Listing Service reveals fascinating patterns in the state’s housing market. As of November, the median cost of single-family homes in Rhode Island experienced a notable rise, climbing to $431,000 – a 4.8 percent increase from the previous year’s $ 411,450. In November, the Ocean State secured the ninth place in Realtor.com’s list of the most popular U.S. markets, up from tenth in October.
Although the sales rate saw a year-over-year decrease in November, it was the lowest decrease over the last five months. Closed sales decreased by 13.8 percent from November 2022. The amount of pending sales declined by 14.7 percent. However, this drop is significantly less severe compared to the earlier part of the year, when annual sales decreased by 52.7 percent, lower than the previous year’s statistics.
Factors Influencing the Housing Market
Housing in Rhode Island has faced challenges due to an inventory shortage and high mortgage rates. However, there is an opportunity to be optimistic in the inventory of single-family homes to purchase increased to 1.5 months at the end of November in 2022, to 1.9 months in November. Furthermore, news from the Federal Reserve suggests a potential decrease in interest rates over the next year, bringing some relief to the market.
Lawrence Yun, Chief Economist for the National Association of Realtors, believes the fixed 30-year mortgage rate will reach 6.3 percent in 2024. As per Yun, “With mortgage rates dropping below 7 percent in recent months and sales data indicating some slight increases in supply, we’re seeing positive signs for the year 2024. The housing shortage is currently the biggest challenge; however, as rates drop, we’re hoping for more homeowners willing to drop their current mortgage at a low interest rate and put their house for auction.”
Yun adds that potential buyers should be aware that even though significant price decreases are not anticipated, the annual appreciation rate has diminished in the past year. This means that 2024 could be the best time for those who are considering selling their home.
Condominium and Multifamily Markets
In the condo market, the median cost of sales increased to $357,500 in November, an 8.3 percent increase from the previous year. Even though sales experienced a decrease of 25.2 percent, pending sales–an important indicator of market activity – increased by 2 percent, indicating an optimistic outlook for the coming year. Sales activity for condos pending was similar to the previous year’s total since December 2021.
The multifamily market witnessed an increase of 23% in median value, averaging $492,00. The number of sales in the segment decreased by only 3.9 percent from November 2022. This was the least decline throughout the year. Sales in the multifamily sector fell by 4.4 percent, which indicates an overall stable performance.
Rhode Island Housing Market Forecast for 2024
The Rhode Island housing market continues to prove resilient and stable, with the median house value currently at $435,415, a staggering 7.0 percent rise over the previous year. Based on Zillow’s data and the date of November 30th, 2023, houses are expected to be put on pending status within eleven days.
Key Market Metrics (As of November 30th, 2023)
- For Sale Inventory: 1,794 homes
- Latest Listings 767 Properties
- Median Sale to List Ratio: 1.013 (October 31st, 2023)
- Median Sale Price: $406,667 (October 31st, 2023)
- Median List Price: $464,950 (November 30th, 2023)
- Percent of Sales Over List Price: 59.3% (October 31st, 2023)
- Percent of Sales Under List Price: 29.0% (October 31st, 2023)
Rhode Island Regional Housing Market Forecast
Zillow’s forecast predicts steady growth for the larger regional outlook, with a particular focus specifically on the Providence, RI Metropolitan Statistical Area (MSA). On December 30th, 2023, the MSA showed a positive outlook and a projected increase of 0.3 percent until the close of 2023. and then a rise of 0.1 percent growth rate at the end of February 2024 and an additional 0.2 percent growth rate by November 30th, 2024.
The Metropolitan Statistical Area (MSA) comprises Providence, RI, and the surrounding regions. As a major socio-economic unit, it covers many counties that contribute to the general market for housing. In this regard, the MSA encompasses multiple counties, creating an extremely robust market with diverse real estate trends.
Will the Rhode Island Housing Market Crash?
Based on the latest market and data, there are no evil costs of a current housing market decline within Rhode Island. The constantly rising value of homes, a positive median sale-to-list ratio, and a strong demand suggest that the market is stable. However, constant monitoring of economic indicators and external influences is crucial to determine any possible shifts.
Is Now a Good Time to Buy a House in Rhode Island?
The real estate market of Rhode Island is showing positive trends. It is a great time for potential buyers. The rising median sales prices and the percentage of sales above the cost of the list indicate a lively and competitive market. Buyers could profit from the current market, but personal conditions and long-term goals must be considered when making decisions.