RI Could See an Explosion in Home Prices in 2024, According to New Report and Experts

RI Could See an Explosion in Home Prices in 2024, According to New Report and Experts

Rhode Island home prices are at record levels, there is a record low level of inventory, and interest rates are above 7% — all tough news for first-time homebuyers.

Well, in 2024, things could get even more complicated.

According to Realtors.com, we can expect to see prices continue to increase in the Providence metro area. The study predicts another 7.1% increase in the Providence area in 2024.

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Lottery Winners

For those who purchased a home five to seven years ago — you won the lottery.

The value of a home bought between 2017-2019 in the Providence metro area has exploded, and in 2024, the total percentage increase is expected to be 56.6%. 

And the existing home sales have dropped during this same period by 26.6% due to the lack of inventory. Those that have homes are holding onto them.

 

2024 Known and Unknowns — “All Hell Is Going to Break Loose,” Says Barbara Corcoran

Ben Scungio of Mott & Chace Sotheby’s International said in an interview on GoLocal LIVE, “We are at the lowest level of home sales since the Great Recession because homeowners don’t want to sell and trade a 3% interest rate on their existing home for a 7% interest rate on their new home.”

In recent months in Rhode Island, the median price of a single-family home has settled between $430,000 and $460,000.

In a Fox Business interview, real estate entrepreneur and “Shark Tank” star Barbara Corcoran predicted that prices will see a major increase in 2024 as interest rates decline.

“Sellers don’t want to move from their apartment or their home because they don’t want to take on higher interest rates,” Corcoran said. "And buyers are too afraid [to buy] because they are getting less house [for the price]. So you’ve got a standoff going on. But things are changing.”

“The minute those interest rates come down, all hell’s going to break loose and the prices are going to go through the roof,” she said. “[Right now sellers are] staying put. But they’re not going to stay put if interest rates go down by two points.

“It’s going to be a signal for everybody to come back out and buy like crazy, and the house prices [will likely] go up by 20%,” she said in the Fox Business interview. “We could have COVID [market] all over again.”

However, interest rates will be determined by the Federal Reserve. Jerome Powell, the Fed Chair, said on December 1, "It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease. We are prepared to tighten policy further if it becomes appropriate to do so."

Scungio said, "A year ago, we had four months of inventory, and now we have 1.6 months; it is crazy." He worries that the pent-up demand could push Rhode Island prices higher in 2024.