PROVIDENCE – The cost of buying a home in Rhode Island continues to rise in 2022 due to an ongoing inventory shortage, leading to properties being sold in less than three weeks on average in the Providence metropolitan and East Bay areas, according to the Greater Providence Board of Realtors.
Comparing the second quarter of 2022 to the same period the previous year, the board recently released statistics showing that the median sale price for a single-family home increased in 11 out of 13 municipalities around Providence, jumping by an average of 10.74%.
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In the second quarter of 2022, the average cost of a single-family home in the area was $430,562, when looking at sales data compiled from Providence, East Providence, North Providence, Barrington, Warren, Bristol, Johnston, Cranston, Smithfield, Burrillville, Glocester, Foster and Scituate. In the prior year, the median for this region was $389,769, according to data provided by the board.
The group cited information collected through the Rhode Island Statewide Multiple Listing Service.
The board said a shortage of homes for sale is tied to the disruption caused by the COVID-19 pandemic, and that the impact continues to drive up the prices in a major way, even as the “cultural and economic vibrancy” of the Providence area continues to serve as a “major draw” for homebuyers.
“The statewide inventory crunch and low number of new housing starts is weighing down the closed and pending sales totals,” the group said. “After two years of record-setting market statistics, some markers are beginning to return to pre-pandemic norms, while the low level of homes for sale continues to sustain high sale prices.”
While prices have increased due to demand, the number of sales being closed went down 13.6% in the second quarter of 2022 compared with the same period in 2021, the board said. Providence, for example, had 30 fewer sales in the second quarter of 2022 compared with the same period the prior year, decreasing to 201.
Recently, Burrillville was the only community that experienced an increase in its number of closed home sales for the second quarter, jumping by just two year over year to 46 this year.
Of the 13 cities and towns included in the report, the community hit the hardest by rising single-family home prices was Johnston, where the median price went up by 22.2%, up from a median sales price of $317,000 in the second quarter of 2021 to $387,450 in the second quarter this year. Other municipalities that were hit hard by increases in median sales prices included Glocester, where the median price spiked by 21.4%, jumping from $350,000 to $425,000 year over year; East Providence, with an 18.2% increase, from $315,000 to $345,000; and Barrington, with a 17.3% increase, from $650,000 to $762,500.
There were a couple outliers, according to the board’s report. Median single-family home prices went down in the second quarter year over year in Foster, where home prices decreased by 3.7% from $405,000 to $390,000, and in Warren, where home prices went down 2.46% from $410,000 to $399,900.
Comparing the second quarter of this year to that of last year, the decrease in the average number of days on the market for a single-family home was most pronounced in Foster, withering from 34 days on the market in the second quarter of 2021 to just eight in the second quarter of 2022, according to the report. That’s a 76.5% decrease.
In Providence, according to the report, the average days on the market for a single-family home in the second quarter last year was 35, while this year it was 20, amounting to a roughly 43% decrease.
In Bristol, according to the report, the decrease in the average number of days on the market was just 21 in the second quarter of this year, compared with 42 days last year, a 50% drop.
Marc Larocque is a PBN contributing writer.
