Although the number of sales slowed, Rhode Island's median house price for the second quarter, $280,000, was the highest quarterly price in 11 years. The median price was also up nearly 9% compared with the second quarter of 2017, the Rhode Island Association of Realtors and the Statewide Multiple Listing Service reported.
The new statistics also show that houses have been selling quickly this year in Rhode Island. The average "days on market" fell to 50 in the second quarter, down from 59 one year earlier.
Providence was a particularly hot market this spring. In the East Side, the days on market fell to 33, down from 58 in the second quarter of 2017. For the part of Providence without the East Side, the average days on market was 38.
The days on market was also at 38 in West Warwick, and it was 31 in Woonsocket. The average days on market were much higher in high-end second-home markets, such as Block Island (419), Little Compton (145) and Jamestown (82).
The second quarter also saw a dramatic drop in the number of distressed sales, which include foreclosures and short sales. These sales fell to 127, down from 256 in the second quarter of 2017.
Although rising prices are seen as a mark of economic recovery, they also harm those struggling to afford housing. Just last week, the association noted that "skyrocketing" rents have bolstered the prices of multifamily properties in Rhode Island. The median sales price of multifamily properties rose 20% in the second quarter, to $240,000, and sales increased by 4%.
The return to 2008-level housing prices is "alarming," said Brenda Clement, executive director of HousingWorks RI at Roger Williams University. The state is in dire need of more housing, for sale and for rent, that is affordable for those earning below $50,000 a year, she said.
"There is no market for starter homes, for either homeownership or rentals," Clement said. "Our vacancy rates are way too low ... we keep beating the drum," she added, in the hope that "someone will listen."
Douglas Hall, director of economic and fiscal policy at the Economic Progress Institute, noted that Rhode Island has more renters than many other states — about 40% of the population — and they are vulnerable to "any ripple through the housing market." Although more Rhode Islanders are working today, many don't earn enough to afford housing, he said. A $15-an-hour minimum wage would be a good first step, Hall said.
"If housing is more expensive and wages are not increasing ... then you have more cost-burdened households," said Caitlin Frumerie, executive director of the Rhode Island Coalition for the Homeless.
Frumerie said low-income renters, even those with housing vouchers, are finding it more difficult to find homes they can afford. Many landlords find it profitable to rent to students or Airbnb guests, she added, and "everybody is fighting over the same units."
"Overall, we're reducing homelessness," she said, "but the supply is not out there."
