- The median price of a single-family house in December was $427,000
- Competition is increasing for the few homes on the market
Over the weekend, real estate agent Jill Sweetman hosted three open houses.
Despite occurring on some of the coldest days of the winter so far, each open house pulled in 20 to 25 people, which came as a surprise.
“It was biting cold, it was miserable, and normally when the weather is terrible, no one comes out to see houses,” Sweetman said.
What Sweetman saw goes a long way to describe the current state of the housing market as the Rhode Island Association of Realtors released the housing sales data for December 2023.
In December, the median price of a single-family home dipped slightly to $427,000, down $4,000 from November. The median house price is up 10% from December 2022 and 50% from December 2019.
“People are getting desperate for houses again, because all these people braved temperatures in the teens to come and see these houses,” said Sweetman, who is with Nathan Clark and Associates.
In December, the number of houses listed on the market continued a downward slide, with 917, down from 1,152 in November. The number of houses sold fell from 569 in November to 532 in December.
When Sweetman checked the number of listings on Monday morning, the number of houses listed had sunk even lower, to 708.
What November’s market looked like:House prices and interest rates are down in Rhode Island, but does it really matter?
Interest rates keep sales depressed, lack of inventory keeps prices high
“We’re in a weird limbo area where sellers aren’t putting their homes onto the market, and for buyers there are no homes, so when there is a really good house, people are competing for it, even though interest rates aren’t fantastic,” Sweetman said.
Interest rates have been climbing, mostly, since record lows in 2021 and 2022, dropping below 3%, peaking at 7.8% in October 2023 and then easing back down to 6.6% as of Jan. 18, according to data from the mortgage lender Freddie Mac.
Higher interest rates normally depress prices as demand slows, but when there is little supply, prices stay the same or barely decrease.
“This is like it was at the start of 2022, when there were like 680 single-family homes on the market,” Sweetman said. “It seems like we’re getting back to that.”
With the market so tight, prices so high and increased mortgage rates reducing buying power, Sweetman said, it’s difficult to make offers stand out, and it isn’t always the highest bidder that wins. Often, it’s the person who offers the smoothest or most secure house sale.
Sweetman recently helped her clients buy a house that was being sold by the former owner’s estate, including all of the furniture, knick-knacks, all of the things that accumulate over a lifetime. To win the bid, they offered to take the house as-is and deal with cleaning out the stuff themselves.
“Junk removal costs $1,000 to $1,500. They take everything out of the old house and you’ve spent $1,500 and were picked over five other people – versus tacking $50,000 on to a mortgage,” Sweetman said.
What the multi-family markets look like
While single-family homes get most of the attention and make up most of the housing stock, condos and multi-family homes are hot commodities.
The median price of a multi-family house dipped slightly to $480,000 in December, down from $492,000 in November and $482,000 in October, but still below the all-time high of $500,000 in June and July 2023.
The number of listings was down slightly in December to 214, from 220 in November.
Multi-family house prices have seen the biggest percentage increase since the pandemic, with December’s median price 68% higher than it was in December 2019. Multi-family houses have been relatively quick to sell, with an average of 23 days on the market for the last three months of 2023.
In all, there were 214 multi-family listings in December, which has dropped to 176 as of this week.
What the RI condo market looks like
With condos, the median price was up slightly, to $360,000, up $3,500 over November. The cost of condos is up 60% compared with December 2019.
Condos are spending longer on the market, 37 days in December compared to 27 days in November. The number of condos listed on the market decreased slightly to 214 in December. As of this week, it’s even lower, at 197.
Houses priced correctly will bring lines, competing offers
When a house is right in that sweet spot, near the new median price, $350,000 to $450,000, appears to be worth it and is in decent shape, it will go fast and there will be competing offers, Sweetman said.
For her buyers, that means going to the first open house scheduled, even if it’s a bitterly cold weeknight, and either offering more than the asking price or figuring out what the seller wants and making that part of the offer.
“Sometimes it’s offering nice terms to a seller, like you’re willing to pay some of their closing costs,” Sweetman said. “Again, it’s a nice way to spend a small amount of money and get a big result.”
While some sellers want top dollar, others just want to move on.
“A smooth transaction where nothing falls apart is often worth more than an extra $20,000,” Sweetman said.
Onslaught of natural disasters affects buyers and sellers
The recent bouts of flooding and tornado-inducing storms have been hitting many of Sweetman’s would-be buyers and sellers.
One couple who own a multi-family house and was looking to move into a single-family is spending the money they had saved for a down payment replacing a roof after it was torn off during a recent wind storm.
RI’s September floods were a disaster.What help is available for victims?
Others are calling Sweetman to ask what to do as their basements flood for the first time since they’ve owned the houses they are now looking to sell.
“They’re spending all their money on mitigation,” she said. “It’s like a perfect storm.”
South County and Newport housing numbers
In Newport County, a total of 41 houses were sold in December, 7% of the total for the state. Jamestown, with six sales, saw the biggest swing in median price over last year, hitting $1.6 million across those six sales, compared with $725,000 across seven sales in December 2022.
Jamestown had the highest median price in the entire state, followed by Block Island, where one house sold for $1.3 million, and then Newport, with $1.1 million over six sales.
Little Compton saw the biggest decrease in single-family home sales, from five in December 2022 to none last month, followed by Newport, down to six last month compared with 16 a year ago. Little Compton was the only municipality in the state to register no sales last month, while Block Island and Hopkinton both registered a single sale.
Portsmouth was the only town in Newport County to see an increase in sales, 14, two more than in November.
Tiverton was the most affordable Newport County town, with a median price of $448,000 across 11 sales, down from 14 a year ago. The median price in Tiverton was up 23% from $357,000.
Thanks to our subscribers, who help make this coverage possible. If you are not a subscriber, please consider supporting quality local journalism with a Providence Journal subscription. Here’s our latest offer.
Reach reporter Wheeler Cowperthwaite at wcowperthwaite@providencejournal.com or follow him on Twitter @WheelerReporter.
- The state median single-family price is up 49% since the pandemic began
PROVIDENCE − Providence will be the fifth-hottest housing market in the country in 2024, according to real estate listing site Zillow.
Zillow’s report puts Providence’s housing market just below Buffalo, New York; Cincinnati, Ohio; Columbus, Ohio and Indianapolis, Indiana.
The report looked at the top 50 metropolitan areas by population and used calculations for forecast home value appreciation, number of days a house was listed, building permits, projected changes in the labor market and the number of owner-occupied houses.
“2024’s hottest markets all boast solid economic fundamentals, relatively fast-moving for-sale housing inventory, plentiful likely buyers and expectations for stable home values,” report author Anushna Parkash wrote.
November’s housing numbers:House prices and interest rates are down in Rhode Island, but does it really matter?
Little supply, with the number of homes on the market at multi-year lows, helps define a hot market, along with the speed at which homes sell.
“It’s likely that these low inventory markets, in which buyers had the hardest time finding a home and homes generally sold very quickly in 2023, will continue to experience outsized demand (relative to supply) in 2024, compared to other markets,” she wrote.
Why was Providence ranked as one of the ‘hottest’ markets?
In Providence in November, the 45 single-family houses that sold were on the market for an average of 20 days, down from 27 days a year earlier. That held consistent with sales in the third quarter, when the number of days a house was on the market averaged 21 across 162 sales.
Across Rhode Island in the third quarter, 569 single-family houses sold, with Providence accounting for 29% of those sales.
More:What were the most expensive homes sold in Rhode Island in 2023?
Unlike the rest of the state, in Providence, the number of multi-family home sales in the third quarter came close to the number of single-family home sales, at 134. Just like the single-family counterparts, they spent an average of 21 days on the market. Providence accounted for 33% of the multi-family sales in the state during that time.
Condos in Providence stayed on the market longer, an average 32 days for 89 sales in the third quarter.
In November, there were 1,152 single-family homes listed for sale in Rhode Island, compared with 2,984 in November 2019.
Providence home prices
While Rhode Island’s median single-family house price in November was $431,000, it was lower in Providence, at $380,000. However, multi-family houses make up a big proportion of house sales in the capital city, and their prices are much, much higher.
Third-quarter data is used below because town-by-town listings are not readily available for condos and multi-family buildings.
Providence median house prices
- Providence single family, 3rd quarter: $370,000
- State single family, 3rd quarter: $450,000
- Providence multi-family, 3rd quarter: $528,500
- State multi-family, 3rd quarter: $485,500
- Providence condo, 3rd quarter: $379,900
- State condo, 3rd quarter: $379,000
What’s driving demand in the hot markets?
Baby boomers are not moving out of their big homes at the same time that millennials, now in their 30s and 40s, are in their “prime home buying years,” Parkash wrote.
Baby boomers staying in their homes, or buying additional homes, is a big change from previous generations. The median age of all homebuyers is now 49, up from 31 in 1981, and the first-time homebuyer median age is 35, up from 29 in 1981.
Interest rates have increased significantly, hitting a high of 7.76% in late October, and coming down slowly since. Normally, high interest rates bring down prices by cutting into demand, but the lack of inventory has been keeping prices up.
The pre-pandemic November 2019 median price of a single-family house was $290,000. Prices have since risen 49%.
Interested in the housing market? See the rest of our coverage
If you’re interested in a deeper dive into the housing market, read our insights on the November housing data, and how buyers are becoming pickier as prices refuse to come down.
If income-restricted housing is your thing, consider our story on the case of the brand new $299,000 condos in Pawtucket and why it appears they’re so hard to sell.
If you’re interested in the top of the market, see our story on the most expensive homes sold in 2023, with a mansion on a bluff topping the list, but well below its $25-million asking price.
A condo was the third most expensive residence sold in the state in 2023, at an exclusive sporting community in Richmond, followed by a penthouse in a new condo building. See all the most expensive condos sold in 2023.
Thanks to our subscribers, who help make this coverage possible. If you are not a subscriber, please consider supporting quality local journalism with a Providence Journal subscription. Here’s our latest offer.
Reach reporter Wheeler Cowperthwaite at wcowperthwaite@providencejournal.com or follow him on Twitter @WheelerReporter.