Key Summary
- The median home price in Rhode Island as of January 2024 is $460,800, showing a significant +12.8% YoY increase.
- Home sales in January 2024 experienced a 4.3% YoY decrease, reflecting a more stable market compared to the larger drops seen previously.
- Interest rates remained high at 7.37% in February 2024, influencing both selling and buying decisions due to the ongoing demand and tight inventory.
- 42% of homes sold above list price in January 2024, with a sale-to-list price ratio of 100%, indicating a strong seller’s market.
Market Overview
The Rhode Island real estate market has witnessed a notable upturn in home prices. The average median home price in Rhode Island is $469,300 marking a 4.9% increase year-over-year.
October saw the median sales price of homes climb to $435,000, a robust 7.4% increase, reflecting a strong market despite the overall decrease in transactions and inventory.
Sales Trends
The market has also seen a shift in sales trends for the last few years, as shown by recent Census records. In more recent figures, that trend continued. Throughout January 2024, there was a 5.9% decline in the number of homes sold compared to January 2023. This is, however, an improvement on the 17% fall seen in October 2023.
Prices Across Rhode Island
As of January 2024, the average home price in Rhode Island reached $572,900. This is a 7% increase year-over-year and demonstrates the robust market conditions at present.
At the latter end of last year, we saw a slight dip in the value of single-family homes, especially between October and November 2023, although multi-family homes remained at an all-time high.
As of January 2024, there has been considerable improvement, particularly in the median price for a single-family home. This increased to $441,750 which is 12.9% higher than one year earlier. Multi-family homes also saw an 8% rise on last year, with the median price sat at $475,000.
Rhode Island Housing Supply and Demand
Property values have increased by 48.6% in the last five years across Rhode Island but with mortgage rates at record highs, homeowners aren’t keen to move homes.
The area has been dealt a tough hand with home sales, and in September last year, figures showed that home sales have decreased by 21.6% year-on-year.
So far, 2024 figures are a little more promising with home sales falling by only 4.3% YoY which, compared to the double-digit drops of 2023, are far more palatable. Let’s take a closer look at the housing supply and demand in Rhode Island.
Interest Rates Drive Demand
With interest rates still high, at 7.37% in February 2024, sellers are sitting on their properties. The lack of inventory has created an even higher demand for property in Rhode Island as buyers struggle to get their hands on property. This is, however, great for house prices as they are driven up by the high demand.
Supply Holds Steady
As of January 2024, there were 2053 homes listed for sale in Rhode Island. This is down 5.9% compared to last year, however, 750 newly listed homes were up 3% YoY.
In a positive sign, Rhode Island’s average monthly supply has held steady for 2 months since September 2023. This is down year-over-year as well as being significantly below the average five to six month supply but inventory is continuing to grow.
Sales Above List Price
In January 2024, 42% of homes sold above list price, an increase of 4.1 points YoY. The sale-to-list ratio was 100% in January 2024. At present, it is a seller’s market as more people are looking to buy than there are homes available.
ℹ️ Did you know? Only 16.6% of Rhode Island homes had price drops in January 2024, this is up 15% from January 2023.
What areas of Rhode Island are in the highest demand for real estate?
The areas in Rhode Island currently experiencing the highest demand for real estate prominently include Providence, Newport, East Greenwich, and Narragansett. These locales are sought after due to their robust economies, strategic locations, and diverse mix of residential and commercial properties.
They are particularly appealing because of their excellent amenities, such as reputable schools, dining options, and cultural attractions. Furthermore, coastal regions like Block Island and parts of Cape Cod are attracting out-of-state buyers looking for vacation homes, thanks to their status as popular vacation spots.
In terms of emerging markets within Rhode Island’s real estate industry, notable areas include:
Providence
The state’s capital is witnessing a surge in development and investment, attributed to its eclectic neighborhoods, cultural vibrancy, and expanding employment opportunities, enhancing its appeal for both residential and commercial investments.
Newport
Renowned for its historical architecture and scenic waterfronts, Newport is a magnet for tourists and a prime location for high-end real estate. It is supported by a diversified economy encompassing tourism, tech, and healthcare sectors.
Warwick
As Rhode Island’s second-largest city, Warwick offers a strong business environment and strategic access to the state’s major urban centers, appealing to businesses aiming for expansion.
East Greenwich
Experiencing rapid housing market growth, this charming town is favored for its excellent educational institutions, picturesque downtown, and accessibility to major transport routes.
South County
Celebrated for its stunning beaches and charming coastal towns, South County provides a range of real estate options from luxury homes to affordable housing, catering to both vacationers and year-round residents.
Predictions for 2024
With a property market that has seen super high mortgage rates and ever-increasing property prices, Rhode Island has lived to the tale of a tricky economic market. Here’s our expert opinion on what might be to come in 2024:
Mortgage Rates Steady
Mortgage rates are widely expected to steady in the first quarter of 2024 with a fairly decent drop expected by the end of the year. Whilst it won’t be a huge decline, it will be well under the 7% figures we’ve seen in 2023. The Quarterly U.S Economic Forecast predicts that rates will reach 6.1% by the end of 2024.
Buyer Activity
A reduction in mortgage rates should encourage an increase in home buyers. The easing of inflation alongside stabilizing rates will give the property market the reinvigoration it needs.
Rising House Prices
House prices are expected to continue rising throughout 2024 in Rhode Island. The low supply rate vs high demand dynamic is still pushing prices up. In January 2024, homes were selling for a median price of $460,800 which is +12.8% YoY.
New Home Sales
Sales of new builds are expected to rise, with 12.3 % of homes bought in the U.S. in September 2023 being newly constructed. That being said, Rhode Island has the fewest new builds in the entire country, with only 1.27 new builds per 1000 residents, which continues to drive the rising prices of property in the state.
Will the Housing Market Crash in Rhode Island?
It is not likely that Rhode Island’s housing market will crash, and there are certainly no immediate signs of it. The consistently rising property prices alongside positive average sale-to-list ratios, as well as high demand for homes, all support signs of stability in the market.
With potential interest rate declines and a slight increase in the inventory of single-family homes, the market outlook for 2024 is optimistic, predicting a more balanced environment.
What to Consider as a Seller in Rhode Island
For those considering selling their homes in 2024, Rhode Island’s slowing price appreciation presents opportunities for successful transactions. Strategic preparation and presentation of your property are key to effectively navigating this market.
Enhance Your Listing
High-quality photographs and detailed descriptions can significantly boost your listing’s appeal. Incorporating virtual tours allows potential buyers to explore your property remotely, increasing engagement.
Price Your Home Wisely
A competitive pricing strategy, based on thorough market analysis, is essential. Correctly priced homes attract serious buyers faster, as they align with current market expectations.
Staging for Success
Staging your home can make it more attractive to buyers, helping them envision living in the space. Decluttering and simple aesthetic improvements can significantly enhance your property’s appeal.
Choose the Right Agent
Selecting a real estate agent with a proven track record in Rhode Island is crucial. An experienced agent can provide valuable market insights, effectively market your home, and handle negotiations, streamlining the selling process.
If you are looking for a quick cash sale rather than going through the listing process, consider using an ibuyer company. Companies, such as Moss Home Solutions, offer cash for properties and can close a deal within as little time as 7 days.
What to Consider as a Buyer in Rhode Island
Buyers may find improved opportunities due to better mortgage rates and a gradual increase in inventory. It’s a critical time to monitor market trends closely, as these conditions can present unique advantages for those looking to purchase in the state.
Stay Informed on Mortgage Rates
With mortgage rates becoming more favorable, buyers need to stay updated on these changes. Lower rates can significantly impact your purchasing power, enabling you to afford more home for your money.
Consider consulting with a mortgage advisor to understand the best timing for loan applications and to secure the most advantageous rates.
Watch the Inventory Trends
A gradual increase in property listings offers buyers more choices. However, this also means that desirable properties can come and go quickly. Keep a close eye on new listings and be prepared to act swiftly when you find a home that meets your criteria. Setting up alerts with real estate websites or your agent can ensure you don’t miss out.
Understand Market Dynamics
Understanding Rhode Island’s market dynamics is crucial for making informed decisions. Factors like the average days on the market for homes and local demand trends can influence your approach to making offers. Being well-informed can help you negotiate more effectively and avoid overpaying for a property.
Seek Professional Guidance
Navigating the Rhode Island housing market as a buyer can be complex. Working with an experienced real estate agent who understands the local market can provide you with invaluable insights and guidance. They can help you identify properties that match your preferences, budget, and investment goals, making the buying process smoother and more efficient.
Frequently Asked Questions
Are home prices dropping in RI?
No, home prices are rising in Rhode Island. They are expected to continue to rise throughout 2024 as the supply-demand dynamic remains unbalanced. Until there is a better inventory-to-buyer ratio, you should not expect to see a decline in Rhode Island property prices.
What is the average house cost in Rhode Island?
As of January 2024, the latest figures show that the median property price in Rhode Island is $460,800.
Is Rhode Island a good place to invest in real estate?
Yes, with its stable economy and diverse job market, Rhode Island presents a solid opportunity for real estate investment.
What is the average number of days on market in RI?
Although the RI housing market is starting to see some improvement in terms of days on the market, it remains higher than normal. The median days on the market in January 2024 were 35 days.
Real Estate Rundown
The Rhode Island housing market is navigating through a period of adjustment, characterized by rising prices, shifting sales trends, and a competitive landscape for buyers and sellers.
Despite challenges, the market’s resilience and the potential for stabilization in 2024 offer opportunities across the board. Understanding these dynamics and responding to market signals, allows those buying or selling to make informed decisions, ensuring their success in the Rhode Island real estate market.
Interested in selling your Rhode Island property quickly for cash? Find out more here.
