Providence Home Prices Up 30% in a Year, One of Toughest Markets in America, Says New Study
GoLocalProv Business Team
Providence Home Prices Up 30% in a Year, One of Toughest Markets in America, Says New Study
Providence saw a far more competitive housing market with much larger price increases than almost all of the cities in the country.
“This year, the housing market is skewed much more toward sellers, with mortgage rates continuing to trend upward and home values having risen over 1.0% in the last year on average [nationally],” reports WalletHub.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTIn Rhode Island and in Providence the rate of increase was substantially higher than the national numbers.
“If you aim for long-term growth, equity and profit with your housing purchase, you’ll need to look beyond tangible factors like square footage and style. Those factors certainly drive up property values. From an investor’s standpoint, though, they hold less significance than historical market trends and the economic health of residents,” according to the study.
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Blistering Increase in Providence in the Past 12 Months
The median price of a single-family home jumped in Providence from $321,000 to $417,500 from July of 2022 to July of 2023 — a 30% increase.
The Providence real estate market has suffered from the lack of inventory and increasing demand.
Methodology of the Study
In order to determine the best real-estate markets, WalletHub compared 300 cities across two key dimensions, “Real-Estate Market” and “Affordability & Economic Environment.”
The study evaluated those dimensions using 17 relevant metrics. Each metric was graded on a 100-point scale, with a score of 100 representing the healthiest housing market.
Finally, the study determined each city’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order our sample.
July home sales data reported by the Rhode Island Association of Realtors showed a small increase in the supply of single-family homes for sale in Rhode Island and a 7.3% year-over-year gain in the median price, to $440,000.
July’s 1.7-month supply was the highest reached since October of last year. A six-month supply is generally considered to be a market balanced between supply and demand.
“Mortgage rates have been creeping up further this summer which has slowed sales activity. While that has increased the supply of available homes a little bit, we’re watching rates carefully as housing costs have been a main driver of the increase in inflation. The housing market helps drive the economy so it’s important that we’re able to keep sales moving,” said Bryant Da Cruz, president of the Rhode Island Association of Realtors.
The median price of condominium sales rose to $359,900, a 12.5% increase from 12 months earlier, while sales activity fell 28.7%. Supply and demand are slightly more in balance in the condo market, with a two-month supply of properties for sale. This sector of the market showed only a 3.4% decline in pending sales, vastly better than the single-family home market’s near 20% drop.
At $500,000, the median price of multifamily home sales represented an 11.1% increase from 12 months earlier. Completed sales dropped by 25.2% and pending sales fell by 26.6%. With a 1.5-month supply of properties on the market, the investor-driven multifamily home sector had the least amount of inventory available.
“Multifamily homes have wide appeal for investors. It’s no secret that rents have skyrocketed and with mortgage rates rising, the supply of prospective tenants is growing,” said Da Cruz.