New Record in Rhode Island Home Sales in 2017
Number of Single-Family Home Sales Hit an All-Time High
Warwick, R.I. – January 18, 2018 – Rhode Island’s housing market continued to gain strength in 2017 according to the latest report from the Rhode Island Association of Realtors and its subsidiary, State-Wide Multiple Listing Service. For the fifth consecutive year, the number of single-family homes sold rose year-over-year, eclipsing previous records. The data reveals that 11,282 single-family homes were sold in the Ocean State last year, up from 11,066 in 2016. The median price of those sales climbed 6.3 percent to $255,000.
“The housing market was hot last year. Our biggest problem was lack of inventory, particularly in the starter home market. It seemed like properties were being sold just as soon as they were listed which made it extremely tough for buyers, particularly in some areas more than others,” said Joseph Luca, President of the Rhode Island Association of Realtors.
Condo Sales Soared in 2017
Condominium sales saw a significant increase last year, rising 12.4 percent from the prior year. The median sales price of condominiums sold in 2017 rose 7.6 percent to $215,000.
“In the face of fewer choices among single-family homes, condominiums became a good alternative for many consumers. Less restrictive financing terms and lower price points allowed first-time buyers entry into the market which may not have been available to them otherwise,” Luca explained.
Median Price of Multifamily Property Sales Hit 11-Year High
Sales in the multifamily home market rose nearly 15 percent in volume and median price, indicating that housing has regained a reputation as a favorable investment. The 2017 median multifamily home sales price was the highest since 2007 when it reached $255,000. At $209,000, last year’s median price was 132 percent above the low seen during the crux of the housing downturn in 2009 of $90,000.
“Thankfully there were many adjustments made to the tax reform package which preserved benefits to property ownership. The continued maintenance of 1031 exchange rules as they apply to real estate for example, will help keep our investment market moving,” said Luca.
RI Realtors also released fourth quarter sales statistics which indicate that single-family sales held their own during the latter part of the year even in the face of the uncertainty caused by the impending tax reforms. Sales volume increased 2.7 percent and median price rose 7.5 percent compared to October through December of 2016. Despite sales volume growing overall however, nearly half of Rhode Island’s municipalities saw a decline in single-family home sales. The condo and multifamily property markets also saw end-of-year increases in sales volume and median sales price.
“There’s no doubt about it, the market is strong. However, changes to the tax code, rising interest rates and the lack of adequate supply could cause the market to moderate in 2018, which wouldn’t be a bad thing. We don’t want to get to a point where affordability issues are creating havoc with the market again,” commented Luca.
The statistics reported by RI Realtors represent Realtor-assisted sales throughout Rhode Island. The median sales price represents the point at which half the home s sold for more and half sold for less. Whereas average sales price can skew results toward outliers, the median price indicates the types of homes sold during a given time period, luxury homes versus starter homes for example, and is not representative of individual property appreciation or depreciation.