The Rhode Island Association of Realtors reported that property prices were on the rise through the third quarter.
Data released on Wednesday showed $385,000 as the median price of single-family homes sold in July through September. It marked an all-time quarterly high.
The price increase came with an 8.4% slowdown in closed sales from last year.
“The single-family home market has been incredibly competitive and the properties that are available for sale are put under contract so quickly, that it appears some prospective buyers took a break,” said association president Leann D’Ettore. “Also, the spread of the delta variant affected the market last quarter, keeping some buyers at home and making some prospective sellers think twice about listing their home.”
For condominiums, the median price for those sold in the third quarter was $272,250.
This data resulted in a 6.8% increase and a closing activity increase of .3% from 2020.
“The median price of multifamily home sales saw the largest growth, rising 21% to $375,000. And, unlike the single-family home and condominium sectors, closing activity continued at a frenzied pace, increasing 43% from the previous year,” the report said.
RI Realtors attributed the spike to low rental vacancies, rising rents, and lowered interest rates.
Out-of-state buyers accounted for 24.8% of total residential sales, the most coming from Massachusetts, New York and Connecticut. They also represented half of all luxury properties sold for $1 million or more.
The report noted that coastal locations attracted an influx of out-of-state buyers.
“Despite the rise in prices, we’re still a bargain compared to many other resort areas and larger urban centers,” D’Ettore said.
The market slowed down after the third quarter among single-family homes and condominiums.
The data showed that the number of single-family homes sold in September dropped by 6.4% from this year, while the median sales price continued to increase.
“At $385,000, September’s median price rose 13.3% from the same time one year earlier,” the report said, “Sales in process but not completed by the end of the quarter- a strong predictor of the market in the months ahead – fell 9.4% year-over-year.”
Last month’s condominium sales fell by 7.6% while the median price rose 1.9% year-over-year to $270,000.
The only properties that remained in high demand as the third quarter closed were multifamily homes.
The report showed that closed transactions rose by 37.6% last month from September 2020 “despite a hike in the median sales price” of 16.2%.
“At $380,000, the median price of a multifamily property is nearly as high as that of a single-family home, and in most cases, the returns are there,” D’Ettore said. “When you factor in the rents that will offset your mortgage, and the knowledge that rents are climbing because we simply don’t have enough units available, these properties appear to be one of the safer investments available for people to build wealth.”