Multi-family homes rose from $250,000 in April 2019 to $550,000 in July
US cities with “prohibitively unaffordable” housing markets, according to report
The researchers identified the least affordable housing markets by comparing average income with average home prices.
- Condominiums, single-family homes and multi-family homes reached record highs
All three housing markets in Rhode Island – condos, single-family homes and multi-family homes – reached record average prices in July.
The average price of a single-family home in Rhode Island approached $500,000, double the pre-pandemic average price, even as interest rates hovered near 6.5 percent and more homes came onto the market.
At 495,000 US dollarsThe median price in July is an all-time record. It was $1,000 higher than the June median price of $494,000, which was also a record. Before that, in May, the median price was $460,000, which was also a record.
The real estate market is so hot that homes spent an average of just 18 days on the market in July — the shortest period of time since 1988, when national records began.
What drives the high prices? The real estate market obeys the laws of supply and demand. In this case, despite ever-increasing prices and high interest rates (compared to the last 20 years), demand for the few homes on the market remains strong.
Rhode Island is in the midst of a housing crisis. Part of that crisis is a lack of new supply, with few new homes, apartment buildings or multifamily housing being built. The battle for supply is the subject of a court case and a major issue in the race for mayor in Cranston, as a developer seeks to build eight homes instead of four on 9.5 acres of land next to a development that already allows the same density the developer is seeking.
No supply drives up prices: In July, 1,313 houses were offered for sale, slightly more than 1,305 listed in June And 1,226 listed in May.
At the beginning of the pandemic, people took their homes off the market. The inventory that realtors call “healthy” is at least 3,500 single-family homes in the state and has not yet returned since the pandemic, leaving often wealthy buyers competing for the few homes that come on the market.
More properties on the market, whether new builds or new listings, would theoretically offer buyers more choice and lower prices.
Last month, real estate agent Bryan Quinlan said that for prices to plummet, half of all homeowners in the state would have to put their homes on the market at once.
Rhode Island real estate market at a glance
The market for multi-family homes continues to grow rapidly: The price of a multifamily home in Rhode Island hit a new high of $550,000 in July, more than double its low of $250,000 in April 2019.
What did the rest of the market inventory look like in July?
The single-family home market:
- Houses offered: 1,313 (compared to 1,305 in June)
- Days on the market: 18 (compared to 23 days in June)
- Sold: 812 (compared to 675 in June)
The multi-family housing market:
- Listed: 249 (compared to 208 in June)
- Days on the market: 21 (21 in June)
- Sold: 142 (145 in June)
The condominium market:
- Listed: 335 (333 in June)
- Days on the market: 31 (28 in June)
- Sold: 201 (161 in June)
What do they say? Rhode Island Association of Realtors President Sally Hersey wrote in a press release that the increase in the number of homes on the market is good for the market and that the possibility of lower interest rates could prompt owners to reconsider listing their homes and buying.
“More inventory and lower interest rates should help move the market. We are confident that the housing market will end 2024 on a rebound,” she wrote.
What is happening in the rest of the country? Rhode Island is both an outlier and fully in line with national trends. Nationally, the median single-family home price fell to $439,950 in July, down from $445,000 in June. While Rhode Island’s ever-increasing median home price is out of step with what’s happening nationally, prices in Rhode Island are fully in line with national numbers.
We thank our subscribers who make this reporting possible. If you are not a subscriber, please support quality local journalism with a subscription to the Providence Journal. Here is our latest offer.
Reach reporter Wheeler Cowperthwaite at [email protected] or follow him on Twitter @WheelerReporter.
