RI Real Estate: Rising Prices - Median Price of Single-Family Home $512K & Impact of Interest Rates
RI Real Estate: Rising Prices - Median Price of Single-Family Home $512K & Impact of Interest Rates
“The median price of a home right now is $512,000 in the state of Rhode Island, and the median asking price is almost $550,000,” said Scungio, of Mott & Chace Sotheby’s International.
Scungio said one of the reasons prices continue to climb is the lack of new housing being built in Rhode Island. He said emphatically “there’s no new product.”
Rhode Island has among the fewest new housing starts in the country.
Interest Rates
Scungio said that if the Federal Reserve were to cut interest rates, he thinks it will drive home prices even higher.
“I personally think the interest rates are playing a huge role in what's going on right now in the market because if interest rates just came down a quarter of a point, there, you know, you could see a significant number of new buyers entering the marketplace,” said Scungio.
Scungio cites what is presently going on in Barrington.
“We're looking at almost 40 homes in Barington on the market, but the interesting statistic is that there are 11 homes that are on the market over $2 million, only one's in contract, and the one that's been on the market the longest has been 62 days. The shortest has been two days, so what that tells me is that there's just not a lot of demand in the primary home market for these $2 million plus homes currently,” said Scungio, as a result of interest rates.
He said that the same is beginning to hit the East Side of Providence. “Houses are sitting much longer,” he added.
Regardless of interest rates, prices are simply too high for most Rhode Islanders.
“I can tell you that for a lot of people, even a $550,000 house...that's not affordable for a lot of people,” said Scungio.
Inventory
There continue to be very few homes on the market. While there are more than there were a few months ago, inventory is far below a so-called “normal” market.
The Rhode Island Association of Realtors reported last week, “Compared to 12 months earlier, sales increased by nine percent in the single-family housing market due to a 20% increase in homes listed for sale."
"Even with that increase in inventory however, Rhode Island’s 2.3-month supply of homes on the market remains less than half of the five to six-month supply that is typically considered a healthy market," they added.