Rhode Island Real Estate Market: What to Expect in 2024 & 2025?

The current median home sale price of $501,900 is stable and rising steadily at 8.7% YoY. Moreover, homes spend only 23 days on the market. This indicates that the Rhode Island real estate market is pretty much competitive.

The average months of home supply are 2 months YoY. A market with fewer months of supply indicates a seller’s market. However, in July, the number of homes sold increased by 23.9% year-over-year. In July 2024, 1,172 homes were sold up from 946 homes in July 2023.

Such inactivity in the market is mainly due to the recent NAR settlement. People are anxious about the selling prices and agents’ compensation.

The NAR settlement has removed the buyers’ agent compensation and many MLSs have followed suit. It will probably reduce the home selling prices. As a result, buyers will have improved affordability along with low mortgage rates. Here are some tips for you to sustain in the market:

• If You Are a Home Buyer: Homes for sale (3,064) are growing at 21.7%. Along with this, the expected drop in home prices can benefit you. The low mortgage interest rates at 5.81% are now in buyers’ favor. Also, in case of low housing demand and prices, you can request for seller concessions.
• If You Are a Home Seller: You can lock in Maine’s current high home prices. The correction in the home prices is long overdue. In the wake of the NAR settlement, home prices may drop a little more. If you’re a seller, you can still make profits on home sales before prices potentially drop.

So, How Is the Real Estate Market in Rhode Island?

Balanced!

The number of homes for sale increased by 21.7% in July 2024 compared to the previous year. This is the 4th consecutive month the housing market has witnessed such growth. Other important facts are:

• Median Days on Market: The median days on the market for homes for sale are 23 days, up by 2 days YoY. This trend suggests a high demand in the Rhode Island real estate market.
• Housing Inventory and Supply: As a buyer, you have more options now as the housing inventory is up by 21.7%. There are 3,064 homes for sale in Rhode Island, with an average supply of 2 months.
• Average Home Prices: The median home price in Rhode Island is $501,900. But, it is expected to decrease due to a rise in inventory in the latter half of 2024. The sale-to-list price ratio is 101.8%, down by 0.8 pt YoY.
• Home Sales: As per July 2024 data, home sales increased by 23.9% YoY! 1,172 homes were sold, compared to 946 last year.
• Average Rent Prices: Rental costs vary statewide. The median rent is $2,200 with a month-over-month change is -$10.

Why Is Rhode Island a Seller’s Market Now?

Rhode Island real estate market has a balanced inventory of homes for sale. Besides this, a steady increase in median home prices favors home sellers. Homes spend only 23 days on the market which depicts the competitive market.

Let’s look at some more facts:

• Fewer Days on the Market: Homes are spending only 23 days on the market before going under contract. This is visible in metro cities like Pawtucket and North Kingstown where the average days on the market is between 15 to 27 days.
• Multiple Offers on Homes: Pawtucket has got 90 and North Kingstown got 81 in Redfin’s Compete Score. It means the housing market in Rhode Island is very competitive. It shows that many homes get multiple offers, some even sold without contingencies.
• High Sale-To-List Price: The average homes sell for about 4% above the list price whereas hot homes sell for about 10% above the list price. The average sale-to-list price ratio in Pawtucket is 105.1%.

• Homes Sell Above List Price: On average, 56% of homes sell above list prices. However, in July, 21.4% of homes experienced price drops, compared to 14.4% last year. This trend indicates a gradual shift toward a buyer’s market.

Rhode Island Real Estate Market Statistics

• Average Home Prices: The average median home price in Rhode Island is $460,500, up by 12.7% YoY. In 2024, the median sale price will keep increasing marginally due to RI’s tight inventory.
• Home Sales: As per January 2024 data, home sales decreased by 5.3% YoY! In January 2024, only 645 homes were sold, down from 681 in January 2023.
• Average Rent Prices: Rental costs vary statewide. An average tenant in Central Falls pays $2,062, while the one living in Cumberland Hill pays $2,250.
• Median Days on Market: The median days on the market for homes for sale was 35 days, down by 3 days YoY.
• Pending Sales: The number of homes for sale declined by 6.9% YoY compared to 2023. Currently, there are ~2,031 homes for sale in Rhode Island.
• Months of Supply: The average month of supply is 2 months. RI’s demand can’t be satiated with the low supply. RI’s house scarcity is worse than the national housing market.

Rhode Island Housing Market Predictions 2024

Here are the predictions for Rhode Island’s housing market in the remaining months of 2024 and 2025:

1. Number of Home Buyers Will Increase: As inventory grows and homes stay on the market, more home shoppers are expected to re-enter the market. The historically high interest rates averted buyers in 2023. But the easing inflation and stabilizing rates will bring back house hunters.
2. Home Prices Will Continue to Rise: Home prices rose steadily in the top metros across RI YoY, reaching $501K in July 2024. Cities like North Kingstown and Pawtucket expect home prices to increase by 7.3% and 9.4% by July 31, 2024.
3. New Home Construction Sales Will Increase:  As per the Building Permits Survey, 960 new private housing units were authorized, in July 2024. Rhode Island’s housing market’s high demand will be served with the new constructions.
4. iBuyers Will Continue to Make Lowball Offers: iBuyers like Opendoor and Offerpad, which once offered 104.1% of market value in 2021, now offer around 70%. Such lowball offers to sellers will increase opportunities for individual buyers.

Bonus Predictions: Buyer Broker Commissions Will Be Zero!

In a shocking turn of events, the NAR settlement has completely eliminated buyer agent fees from the MLS. Let’s understand its impact:

1. Buyer Agents Will Be Affected: With buyers now responsible for directly paying their agents, many may choose to find their homes on their own. This may very soon render buyer agents obsolete.
2. Seller Concession Will Increase: Without the obligation to pay buyer agent commissions, sellers might see increased requests for seller concessions and offline transactions. Additionally, builders are offering significant concessions to attract buyers, further influencing the market dynamics.
3. Builders Will Compete More: Home builders are persuading buyers to buy new construction homes with mortgage buydowns worth $30K!
4. Sellers May Offer Fees for Services: Sellers may offer at least 1%-2% fees to the buyer agents in order to sell their homes quickly. Increasing competition from builders may also cause sellers to pay extra fees to buyer agents.

When Will the Housing Market Crash in Rhode Island?

A housing market crash in the Ocean State is unlikely.

Rhode Island’s strong economy and diverse job market will attract more businesses. The affordable cost of living will draw individuals seeking new opportunities.

Central Falls’s population has increased by 15.3% since 2010, reaching around 22,359 residents in 2024. Cumberland Hill follows as the second fastest-growing city with a 13.4% increase.

Rhode Island is famous for its Jewelry manufacturing, shoreline, state parks, and silverware.

Rhode Island’s job market is also strong. The unemployment rate is at 4.3%. Rhode Island ranked 9th most expensive and 26th best state to live in the United States. The median household income is $81,370. Living near the rolling hills and verdant forests of Rhode Island is SO AFFORDABLE. It is unlikely that Rhode Island’s housing market will crash anytime soon.

2024: Is It a Buyer’s or Seller’s Market Now?

Rhode Island real estate market favors sellers in 2024. (And buyers, too!). The Rhode Island real estate market is expected to lean more in favor of the buyers in the latter half of 2024.

Home prices are rising slowly, and the number of homes for sale has increased by 21.7% YoY. Buyers now have more choices. With mortgage rates around 5.81%, buyers also have more purchasing power.

Consequently, more homeowners are likely to list their homes on Rhode Island MLS. The 19.1% increase in new active home listings in Rhode Island has brought back home shoppers. So, whether you are looking for a condo in North Kingstown or a single-family primary home in Pawtucket, you will find your dream home in the coming months.

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Disclaimer: This article is for informational purposes only. It does not constitute an offer, solicitation of an offer, or any advice or recommendation. Houzeo doesn’t provide any legal or financial advice. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Houzeo Corp., its affiliates, or its employees. However, the author does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does the author recommend that the attached information serve as the basis of any investment decision.

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