News Summary
Rhode Island’s housing market is attracting a growing number of out-of-state buyers, significantly impacting home prices. The median sales price of single-family homes reached an all-time high of $512,750 in May 2023, up from $309,500 five years ago. This trend is fueled by buyers relocating from states like Massachusetts and Connecticut, seeking affordability amidst rising prices. As demand increases and housing inventory remains low, competition intensifies, making Rhode Island an appealing option for homebuyers despite the challenges of escalating costs.
Rhode Island is currently witnessing a significant increase in the number of out-of-state buyers entering its housing market, coinciding with a sharp rise in home prices. As of May 2023, the median sales price of single-family homes in Rhode Island reached an all-time high of $512,750, a striking jump from $309,500 just five years ago. This trend reflects a broader movement where homebuyers are seeking affordability in Rhode Island compared to neighboring states.
The Smallwood family, recently relocated from Greater Boston to East Providence, exemplifies this trend. After more than a decade of considering the move, they purchased a three-bedroom home measuring 1,700 square feet for approximately $600,000. Noticing that home prices have surged over the past two years, the Smallwoods acted quickly to secure their new residence.
Data reveals that the surge in home prices is not isolated to Rhode Island. In comparison, Massachusetts saw a median home price of $666,125 in May, while Greater Boston surpassed the $1 million mark for the first time in June. These figures make Rhode Island’s real estate market appear more favorable for potential homebuyers, particularly those from Massachusetts and Connecticut, who are seeking more affordable options.
In the past year, approximately 23% of buyers in Rhode Island were from out of state, marking an increase from around 15% in 2016. This growing trend signifies that more individuals are exploring Rhode Island as a viable alternative amid mounting competition and inflated prices in their home states. The low inventory of available homes, coupled with sluggish construction activity, has further constrained the supply of housing in the state, exacerbating the upward pressure on prices.
While the demand in Rhode Island is strong, it is important to note that buyers range from cash investors to first-time homeowners keen on finding affordable housing options. For example, Jeff Bakkensen moved to Providence from Chicago earlier this year, purchasing a three-bedroom home for around $800,000. Current estimates suggest that the home is now valued at over $1 million.
The Febo family also made the move from Boston, purchasing a three-bedroom home in East Providence for about $500,000, a significant difference compared to the $800,000 condominiums they were considering in Boston. This shift highlights the ongoing appeal of Rhode Island as a place where individuals can still find perceived value in housing.
Meanwhile, Newport County’s real estate market reflects similar trends, with a median sale price approximately $760,000, and homes averaging only 39 days on the market. The Cumberland ZIP code (02864) in Rhode Island has been recognized as the 8th hottest real estate market in the U.S., featuring a median listing price of $534,000. Homes in this area averaged 3.6 unique viewers per property from January to June 2023, indicating a high level of interest and leading to quicker sales compared to national averages.
The housing inventory in these attractive ZIP codes has notably diminished from pre-pandemic levels, intensifying competition among buyers and shortening the timelines for selling. Overall, this trend paints a picture of heightened urgency for buyers in Rhode Island’s real estate market, illustrating the ongoing quest for affordability amid rising prices.
This burst of activity and competition signifies the changing dynamics of the housing market in Rhode Island, revealing a sense of urgency among buyers who are keen to secure properties in an environment where the perceived value persists despite escalating costs.
Deeper Dive: News & Info About This Topic
- Boston Globe: RI Real Estate Out-of-State Homebuyers
- Providence Journal: Cumberland RI Among Hottest Zip Codes
- What’s Up Newp: Recent Property Sales in Newport County
- Turn to 10: Housing Prices on the Rise in Rhode Island
- Providence Journal: Cheapest Towns to Buy a Home in RI
- Wikipedia: Rhode Island
- Google Search: Rhode Island Real Estate
- Google Scholar: Rhode Island Housing Market
- Encyclopedia Britannica: Rhode Island
- Google News: Rhode Island Real Estate News
Author: STAFF HERE PROVIDENCE WRITER
PROVIDENCE STAFF WRITER The PROVIDENCE STAFF WRITER represents the experienced team at HEREProvidence.com, your go-to source for actionable local news and information in Providence, Providence County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as WaterFire, Rhode Island International Film Festival, and Rhode Island Comic Con. Our coverage extends to key organizations like the Greater Providence Chamber of Commerce and Providence Warwick Convention & Visitors Bureau, plus leading businesses in finance and manufacturing that power the local economy such as Citizens Financial Group and Textron. As part of the broader HERE network, we provide comprehensive, credible insights into Rhode Island's dynamic landscape.
