Activity beginning to wane in the R.I. market?

Activity begins to wane in R.I.’s housing market

While the median price of singlefamily home sales continued to climb in Rhode Island, July sales data released recently by the Rhode Island Association of Realtors showed a slowdown in sales activity from the prior year.

The median price of $384,000 was 16 percent higher than that of July 2020, and the number of homes available for sale was 20 percent lower. These factors, and possibly rising fears about the transmission of the COVID variant, are the most likely factors leading to a 12 percent decrease in closed sales.

Until July, the number of monthly single-family home transactions had been rising steadily year-over-year since last summer.

Pending sales, a strong indicator of market trends in the months ahead, also fell slightly for the first time since the economic shutdown, following months of strong, annual gains.

“Fortunately, we’re getting more inventory on the market in recent months, and though the supply is still lower than it was last summer, we are seeing a bit of an upswing. The number of homes on the market typically showed more than a 40 percent decrease from 12 months earlier for the past year, but that delta shrunk to just 20 percent last month. Buyers are still challenged by a shortage of homes to choose from, but at least we’re seeing small gains,” said Leann D’Ettore, president of the Rhode Island Association of Realtors.

According to statistics from StateWide Multiple Listing Service, there was a 1.7-month supply of home on the market at July’s pace of sales, up slightly from 1.6 months in June and less than a one-month inventory in May. Typically, a housing market balanced between supply and demand has a six-month supply of homes on the market.

Multifamily sales increse

While the multifamily market also saw an increase in median price, rising 23 percent to $370,000, sales of those properties bucked the downward trend in closing activity seen in the singlefamily home market. In fact, multifamily home sales rose 68 percent compared to July 2020. The surge in sales is owed at least in part to low interest financing and strong investment income and affordability thanks to rising rents.

“Buyers are still challenged by a shortage of homes to choose from, but at least we’re seeing small gains.”

LEANN D’ETTORE Condo sales increase too

Both median price and closing activity also increased in the condominium market. July’s median sales price of $275,000 represented a 14 percent increase since July 2020 and the number of transactions rose by seven percent.

“Trends in condo sales typically lag behind what we see in the single-family home market. The number of condos put under contract in July but not closed until after the month ended, was up more than 31 percent last month. That’s a strong indication that we won’t see condominium sales falling below last year’s levels any time soon,” said D’Ettore.

RI Realtors also reported that the growing trend of out-of-state buyers continued in July. Twenty-seven percent of Rhode Island property sales came from buyers from other states, primarily Massachusetts, New York and Connecticut. Once again, that influx was even more pronounced in the luxury market of properties sold for one million dollars or more. Fifty-one percent of those properties were sold to out-of-state buyers.

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Across Rhode Island, single-family home prices have climbed, while actual sales showed their first sign of slowing down in more than a year. A few notable trends in the East Bay: the median price declined 33% (year over year) in Little Compton; a dramatic decline in Bristol home sales; and surging prices in Barrington (more than 40% increase). Also note the dramatic changes in Days on Market (DOM), which were cut in half in many communities.

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