Max and Connie Silvia had been on the hunt for a house in the Providence area for several years while living in a triple-decker they owned in Pawtucket since 2018.
But when they couldn’t find a home with the space and style they wanted at a reasonable price, they turned their attention elsewhere: Aquidneck Island.
They liked the north end of the island for its quality of life, proximity to Newport and the ease with which Max Silvia, a sales representative for a Fortune 500 cybersecurity company, could hop on the highway to Boston or Providence when not working from home. Connie Silvia, an operations manager at Philips Healthcare, also works remotely.
Soon they found what they were looking for in Portsmouth: a 3,100-square-foot, three-bedroom colonial with a deck that spans the length of the house. The price was steep – $865,000, more than twice what it sold for in 2013. The purchase was finalized on May 31.
“We didn’t want this budget, but there was nothing else on the island,” Max Silvia said recently of the $5,800 monthly mortgage payment. “We paid top price, but we got what we wanted.”
Others in the market for a single-family house in Rhode Island may be able to relate to the Silvias’ situation as prices have reached stratospheric heights across the state in recent years. But an analysis of median home prices in each of Rhode Island’s 39 cities and towns over the last five years shows the trajectory of that climb varies widely depending on the community.
Cities and towns on the eastern shores of Narragansett Bay have the biggest spikes, according to sales data provided by the Rhode Island Association of Realtors. And Aquidneck Island has been particularly hot.
For instance, Portsmouth, where the Silvias now live, saw its median sale price for single-family homes go from $406,000 (249 sales) in 2019 to $697,000 (182 sales) in 2023 – a 71.7% jump.
Meanwhile, across the bay in North Kingstown, the median price climbed from $385,000 (343 sales) in 2019 to $550,000 (259 sales) in 2023 – a more modest 42.9% increase. And neighboring, well-to-do East Greenwich saw the median price go from $488,500 (230 sales) in 2019 to $697,500 (150 sales) in 2023, up 42.8%.
Why the disparity? Some in the industry point to the continued migration of Massachusetts residents looking for what might be considered bargain prices in border communities compared with similar properties in the Bay State. This has become even more the case since the COVID-19 pandemic started in 2020 and remote work became much more popular.
“People can’t find what they want in Massachusetts because it is so overpriced,” said Steven Miller, Realtor and principal of Steven Miller Group. “A small Cape-style home in Pawtucket that needs lots of work closed for $420,000 after being listed for $379,000. Buyers are paying well over asking price.”
In other cases, real estate agents say investors who have long been looking at multiunit residences as profit centers are now snapping up single-family properties to convert them to rentals.
For Aquidneck Island Realtor Jeff Brooks, one reason for the substantial price increases on the island and nearby towns is simple: proximity to Newport.
“Location, location, location – there is nothing like Newport up and down the East Coast,” said Brooks, who is chairman of the city’s planning board. “It’s an international waterfront city. Most towns it gets compared with are just the same gift store, town center and Mexican restaurant.”
[caption id="attachment_471109" align="aligncenter" width="1500"]
HOUSE PRICE HOT SPOTS Median house sale prices in Rhode Island have been on the rise for years now, but over the last five years the rate of that climb has varied widely depending on the city and town. Communities east of Narragansett Bay have seen some of the highest percentages of increase. / SOURCE: RHODE ISLAND ASSOCIATION OF REALTORS /
PBN GRAPHIC: ANNE EWING[/caption]
SUPPLY MATTERS
A general lack of affordable housing has been blamed for helping to propel prices to incredible levels throughout Rhode Island. The statewide median sale price for single-family homes rose from $285,000 in 2019 to $425,000 last year – a 49.1% increase.
It’s gotten to the point that Sally Hersey, president of the Rhode Island Association of Realtors, cheered in her monthly report in June when single-family homes on the market rose to a two-month supply, even while she acknowledged that a well-balanced market needs about five to six months’ worth of inventory.
In perhaps a sign of that imbalance, Rhode Island’s single-family house sales, which numbered 11,602 in 2020, declined by more than one-third to 7,409 in 2023 as homeowners seemingly stayed put, locked into mortgages with low interest rates as those rates rose for buyers.
As a result, more than half of homes on the market sold above the listing price, according to the association. In many cities and towns, that has become the norm.
And the prices are soaring at the fastest rates in some unexpected areas.
Out of all Rhode Island cities and towns, Central Falls – one of the state’s poorest areas – saw the median sale price climb at the highest rate in Rhode Island between 2019 and 2023, from $147,450 to $335,000 – a 127% increase.
Part of the reason for the skyrocketing prices is there are so few single-family homes in the densely populated Square Mile City, and few sales take place each year. Only 7% of the city’s housing stock is single-family homes, according to the Central Falls Redevelopment Agency, and 21 sales of those homes were recorded in 2023.
Madelynn Duarte, a Realtor with RE/MAX who brokers deals in Central Falls and other Blackstone Valley communities, says there was only one single-family home on the market not under contract within all of Central Falls as of early June.
That house, a 1,900-square-foot colonial built in 1850 with four bedrooms and 1½ baths, was listed after its owner, now deceased, fell victim to a predatory reverse-mortgage scheme, Duarte says, owing $280,000 for a home she bought for $70,000 in 1994.
The asking price now: $325,000.
Duarte has fielded numerous inquiries, mostly from out-of-state prospects, particularly from the Boston area. In fact, she’s finding that there’s high interest in neighborhoods around the new Massachusetts Bay Transportation Authority train stop on the Pawtucket-Central Falls border.
“These people can come to Rhode Island and work for half the living expenses [in Massachusettes] and double the pay [offered in Rhode Island],” Duarte said. “Right now, we are catching up with other [desirable] markets. But where we are not catching up is our pay. We have been really far behind. When I sit with investors from Boston and other major cities, they feel the prices are low.”
Duarte has seen an influx of individual investors or small limited liability corporations, who years ago may have focused on multifamily dwellings, moving into the single-family market. Individual speculators, sensing a market heating up while wages were stagnant, began using their equity from previous purchases to invest or make additional income, observers say.
And this phenomenon has spread.
According to the Washington, D.C.-based Private Equity Stakeholder Project, Rhode Island is among the top 10 states for its share of single-family homes purchased by corporate investors over a five-year period at 4.3%, a rate that doubled from 2018 to 2022.
Project spokesperson Matt Parr says private investors are buying up residential properties in order to rent them out, usually targeting “starter homes” in less-expensive neighborhoods where all-cash purchases crowd out traditional buyers. They select properties that only require minimal repairs and overhead, opting for “cosmetic” upgrades.
Duarte says communities where there were bargains available in recent years, such as Pawtucket, Woonsocket and West Warwick, increasingly have come on the radar of prospective homebuyers. All three of those urban areas have median sale prices that have increased more than 50% since 2019.
“These corporate landlords have contributed to spikes in rent and home prices because it has reduced the supply,” Parr said. “The research shows that in a lot of markets, they have squeezed out homebuyers. There is so much competition.”
In Central Falls, officials are trying to counteract those dynamics.
Using American Rescue Plan Act money, the city’s redevelopment agency bought a pair of properties and either renovated a home or built a new one to sell to first-time homebuyers through a lottery system. A new 2,000-square-foot home on Hood Street with four bedrooms and 2½ baths recently sold for $389,000.
James Vandermillen, director of planning and economic development in Central Falls, says the city plans to keep the proceeds in a committed account for future property acquisitions, renovations or new construction in order to make more affordable housing available.
But it’s an uphill battle.
“The housing market is doing things I think many of us would not have expected a few years ago,” Vandermillen said. “The [buying] costs were low to begin with. So now if everything in the state is high, the fact we are starting lower means prices may continue to climb. That is kind of where we are.”
[caption id="attachment_471108" align="aligncenter" width="1200"]
STANDING ALONE: Realtor Madelynn Duarte stands outside the Central Falls home she is listing for sale, which as of early June was the only single-family home on the market not under contract within the city.
PBN PHOTO/
MICHAEL SALERNO[/caption]
QUIETER COMMUNITIES
Where some of the most densely populated cities and towns saw big increases, some rural towns experienced modest increases between 2019 and 2023, such as Exeter (28.7%), Scituate (30%), Charlestown (34.1%) and Glocester (34.5%), all of which were below the state average of 49.1%.
And there was an indication that the housing market leveled off in some areas last year. In five towns, the median house sale price declined from 2022 and 2023, including Lincoln ($515,000 to $496,000, down 13.7%), Charlestown ($617,500 to $550,000, down 10.9%), North Kingstown ($575,000 to $550,000, down 4.3%) and South Kingstown ($579,500 to $560,00, down 3.4%).
Miller says those drops were a reaction to rising interest rates as some buyers stayed on the sidelines waiting for the rates to drop again. Now that mindset has faded and prices have climbed again as more buyers reenter the fray. “These rates are here to stay for the foreseeable future,” Miller said. “People are saying it is better to buy now than wait another year.”
In Bristol, the median sale price jumped from $335,000 in 2019 (169 sales) to $627,394 (135 sales) – an 87.2% increase. And in the last year, Bristol’s median price shot up 25.5%, from $500,000 in 2022.
Real estate agents say part of the reason for the torrid market in Bristol is because of its location – just a short trip over the Mount Hope Bridge from Aquidneck Island. And then there are the amenities, Realtors note, that are sought after by prospective homebuyers who aren’t looking for starter homes and have money to spend.
“Bristol is very desirable for those that are looking for walkability, a village, and New England waterfront,” Miller said. “It’s a nostalgic town you don’t see anywhere in New England. So it’s attracting a lot of non-Rhode Islanders, mostly people over 55. These are not first-time buyers.”
Notably, Tiverton – a drive over the Sakonnet River Bridge from Aquidneck Island – hasn’t seen the same stratospheric rise as Bristol or Tiverton’s neighbor to the south, Little Compton, where the median sale price went from $530,000 in 2019 to $950,000 last year – a 79.9% jump.
In contrast, Tiverton’s median home price of $450,000 (147 sales) in 2023 was a 44% increase from $312,500 (229 sales) in 2019.
While homes in the scenic Tiverton Four Corners village section are more in line with Little Compton, Brooks says the overall density in the town of roughly 16,000 people is different, with approximately 80% of the population residing north of Route 24, “where it’s basically Fall River lite,” he said.
Most of Tiverton doesn’t seem to have the cachet of its neighbors, observers say.
“These trends have driven demand for location and quality of life more than anything else,” Brooks said. “You have aging retirees selling their family homes to live in cute walkable towns or growing families buying ‘the American dream’ while keeping their Boston jobs.”
HOT ISLAND
Apparently, judging by how quickly house prices have climbed in Portsmouth, Middletown and Newport, people have found those features on Aquidneck Island.
Newport saw its single-family median sale price go from $535,500 (230 sales) in 2019 to $893,000 (124 sales) last year – up 66.8% – while in Middletown, the median price went from $397,000 (157 sales) to $722,500 (104 sales), an 82% increase.
Meanwhile, Brooks has watched things evolve in the local real estate market in recent years.
“Many people who refinanced dirt-cheap now have a ton of cash. Or they recently sold the family house outside of Boston and are buying a vacation home,” he said. “During the recession, you could never find money. Now there is cash everywhere.”
So much so that Brooks often has to burst the ego of buyers who think their cash pile sets them apart.
“I have to tell them to get in line,” he said. “It carries no weight anymore.”
It’s in this environment that the Silvias say they feel lucky to have found a house in Portsmouth, at the price they paid.
“It’s a seller’s market,” Connie Silvia said. “They can stand firm because inventory is so low that they are getting what they want. Any home will eventually sell to someone who is desperate because there is nothing else out there.”
The Silvias benefited from owning rental property in Pawtucket, which allowed them to save money. And the Portsmouth house they purchased was originally listed at $925,000, but the parties settled at $865,000.
“There is nothing on the island that can replace this house that is for sale right now,” Max Silvia said. “We didn’t want to wait. We wanted a home.”
