PROVIDENCE — Single-family home sales in Rhode Island plunged nearly 9 percent in February compared to the same time last year amid a continuing increase in prices, the state’s Association of Realtors said on Friday.
Last month, single-family homes sold for a median price of $455,500, a 3.5 percent year-on-year rise from February 2024. Pending sales, which is a forward looking indicator, fell more than 10 percent, in what realtors described as a sign of “waning” demand from buyers.
Another segment of the housing market performed better last month.
Multifamily sales shot up nearly 8 percent even as prices rose to a median price of about $560,000, a close to 8 percent jump from the same time a year ago. But pending sales fell by about 7 percent, a signal that demand for multifamily units could also be facing a slowdown.
A multifamily property could be a good investment decision for buyers, said Chris Whitten, the president of the Rhode Island Association of Realtors.
“The upside to owning a multifamily has always been the great potential to obtain passive rental income and the ability to gain generational wealth,” he said in a statement. “More importantly, in today’s housing crisis, multifamilies are also a very desirable option for multigenerational families or an owner-occupied buyer looking to reduce monthly costs through rental income.”
Meanwhile, condo sales also went up in February by 3.5 percent as prices soared 22 percent from a year ago. But in another signal of a decline in demand in the market, pending sales fell 18 percent year-on-year.
Supply continues to be a challenge in Rhode Island, the realtors association said.
At the current rate of sales, single-family homes currently on the market will be sold in just 1.5 months, suggesting there is more demand than available homes for people to buy. Multifamily homes have a 1.9 month window while condos are at 1.7 months. Typically, a real estate market is considered healthy when there is enough supply of homes available for sale for a period of six months.
“It pains us to see Rhode Island continue to be dead last in new construction year after year. Although we’re making slow progress in many ways, we still have a long way to go,” Whitten said. “The road to fully repairing our housing crisis here in the Ocean State is a marathon, not a sprint. But the urgency to make the sensible changes needed remains dire.”
Omar Mohammed can be reached at omar.mohammed@globe.com. Follow him on Twitter (X) @shurufu.
