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Rhode Island home prices shattered records, but not for condos
The median price of a multifamily home has increased 78.7 percent in the past four years, the state's realtor association reports.
Multifamily homes are often viewed as investments or as a way to pay the mortgage by renting out the other units.
In Rhode Island, the latter is becoming more and more of a pipe dream.
The median price of a multifamily home has increased 78.7 percent in the past four years, the Rhode Island Association of Realtors reported on June 21. The median sales price was up nearly 24 percent year over year in May to a record-shattering $545,000.
“Largely driven by the well-financed investor market, the allure of solid rental income has pushed significant year-over-year increases in the median price of multifamily homes since 2020,” the association reported.
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“Real estate has always been a good long-term investment, and that’s never been more true than in the multifamily home market right now,” Sally Hersey, association president, said in a press release. “Unlike stocks, a small initial investment — or down payment — enables you to make significant gains on the full value of your investment. And, with today’s strong demand for rentals which shows no signs of subsiding, a steady income is readily available.”
The demand has resulted in more than a 25 percent jump in multifamily home sales since 2023.
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The median sales price for a single-family home also broke records for the month, hitting $460,000 — a 7.7 percent year-over-year increase, the association reported.
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The median home price in Barrington, for example, was $1,015,000 in May, a jump of about 59 percent based on 15 sales. In the state capital, the median home price for a single-family was $446,000, a 20.54 percent increase based on 46 sales.
Staggeringly high prices, a lack of inventory, and mortgage rates flirting with 7 percent have some would-be home buyers sitting on the sidelines, hoping for a break in any of the three. Sales in the single-family market fell 3.6 percent in May, compared with May 2023.
In a sign that inventory really is improving, “May was the first time since last October that the single-family home market rose to a two-month supply of homes for sale, meaning that the pace of sales would have resulted in all homes being sold in two months if no new listings went on the market,” according to the association.
That’s way below what’s considered a healthy supply.
“In the wake of the current housing shortage, May’s gain in supply is welcome but keeping in mind that a balanced market typically has a five- to six-month supply, we’re keenly aware that we still have a long way to go,” Hersey said. “The Rhode Island Association of Realtors is thrilled that the vast majority of Speaker Shekarchi’s housing package passed this legislative session. As an association, we’ll continue our strong support for any bills that ease the housing crunch in the years ahead.”
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Home shoppers looking to get their foot in their door may want to step into a condo. The median price for a unit fell 10.8 percent year over year in May to $350,000. People may already have that idea. Sales were up 3.1 percent.
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