RI Housing Prices Hit Record Highs—43% Increase Over Past Decade
Wednesday, January 22, 2020
The number of Rhode Islanders who can afford to buy a single-family home has decreased over the past decade.
Meanwhile, the median sales price of a single-family home just hit $285,000 — a 43 percent increase from ten years earlier. The increase far outpaces wage increases that have been on average just above 2% annually.
At $285,000, the median sales price of single-family homes represented a 5.6 percent increase from the prior year and highest on record to date, according to the Rhode Island Association of Realtors.
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The areas with the highest median house price are the East Side of Providence at $625,000 followed by Jamestown at $595,000 and Newport at $535,000.
Multifamily homes reaped the largest gain with an 11.1 percent increase compared to 2018. The 2019 median sales price of multifamily properties was $270,000.
The $234,900 median of 2019 condominium sales reflected an 8.8 percent annual increase.
“We can thank a good economy and continued low-interest rates for the momentum in the housing market. Overall, 2020 looks bright,” said Shannon Buss, president of the Rhode Island Association of Realtors.
"Our biggest concern in the year ahead is lack of inventory," added Buss. "Rhode Island has a shortage of starter homes because they’re just too expensive to build here. We need to grow our supply of workforce housing at the entry-level if we’re to keep momentum in the market overall."
Push for More Housing and a New Tax
Governor Gina Raimondo has called the cost of housing as one of Rhode Island’s greatest challenges.
“No one should struggle to keep a roof over their head either, and right now too many working families do. This affects everyone: the young working couple who struggle to be good employees because they don’t have stable housing; small businesses that struggle to recruit people who are priced out of the community; even kids who fall asleep in class because they slept on a relative’s couch the night before,” said Raimondo in her State of the State speech last week.
“Our housing shortage threatens all of the economic progress we’ve made. This year I propose a housing bond and -- for the first time ever in Rhode Island -- a dedicated funding stream to build more housing. Nearly every other state already has this. Let’s do it, and let’s get to work building more homes,” said Raimondo.
She has proposed a new real estate transfer tax.
But real estate industry officials say the increases are at the appropriate pace.
“Yes, prices are rising but when taking the pulse of the housing market, it’s important to remember that prices had fallen drastically following the boom of the earlier part of this century and it’s taken us some time to fully catch up. In fact, 2019 was just the second consecutive year following the housing boom and subsequent downturn, in which a median-priced, single-family home sold for more than it had ten years earlier. We’re back to where we should be, seeing good, but not exaggerated gains in equity,” said Buss, president
With the exception of the multifamily home market, increasing prices didn’t quell home sales. After falling nearly six percent from 2017 to 2018, single-family home transactions increased by 3.1 percent from 2018 to 2019. Sales of condominiums remained consistent year to year, rising .3 percent while multifamily home sales decreased 2.4 percent.
