As stated last month in Anthony’s Predictions for 2025, “2024 will go down in history as the bottom of this down cycle.” Though we did see year over year increases in all categories, they were nominal where we prefer to see larger numbers.
Overall, the 2024 Rhode Island real estate market demonstrated strong performance, with rising prices and increased activity, indicating a robust and dynamic housing environment.
Many sellers hesitated to list their properties due to the low pre-pandemic mortgage rates, but increased market activity emerged driven by necessity and life changes, making competitive pricing crucial. The market started the year in favor of sellers but later saw a surge in activity that shifted the advantage to buyers. A rebound is anticipated in 2025. Despite rising costs, homeownership continued to be appealing due to fixed payments, equity growth, and potential tax benefits, highlighting its long-term value over renting.
This report breaks down sales, average prices, the number of active listings, and how many listings went under contract for 2024 compared to 2023 and discusses what is predicted to unfold in 2024.
Sales Rise by 4%
Sales in Rhode Island increased from 10,911 in 2023 and came in at 11,345 at the end of 2024– just a little over 400 more sales year over year. Buyers are gradually adjusting to current interest rates, as significant changes in affordability are unlikely soon. Those experiencing life changes proceeded with purchases, while many previously hesitant buyers grew tired of waiting for a market shift and decided to act.
Sales were up in all three categories:
- Single family sales up by 3.6%: 7,983 in 2024 from 7,707 in 2023
- Condo sales up by 6.7%: 1,835 in 2024 from 1,720 in 2023
- Multi-family sales up by 2.9%: 1,527 in 2024 from 1,484 in 2023
Below is a graph that illustrates home sales per year since 2000. After a few years of steep declines, 2024 increased over 2023.
Monthly sales fought to keep up with the same month in 2023 and were down overall for half of the year. The months of increase clearly outweighed the months of decrease with the overall 4% rise in sales. The late summer exhibited a lot of activity as well as December which is unusual.
Average Prices Increase by 11.2%
Prices in 2024 increased over 2023 by $59,614 with 2024 at $591,809 compared to $532,195 in 2023. Despite affordability challenges, prices continue to climb as limited inventory fuels competition among motivated buyers, frequently resulting in multiple offers and elevated sales prices.
Prices increased in all three categories:
- Single family prices increased by 9.4%: $711,028 in 2024 from $650,094 in 2023
- Condo prices increased by 4.3%: $486,837 in 2024 from $466,573 in 2023
- Multi-family prices increased by 9.7%: $624,571 in 2024 from $569,391 in 2023
The bar chart below highlights that 2024 recorded the highest average home prices since 2000—and indeed, the highest on record. With inventory remaining tight and buyers competing for available properties, prices are expected to stay firm, but perhaps not rise as fast in 2025.
Monthly prices in 2024 consistently exceeded those of 2023. The growth since Covid becomes strikingly clear when comparing the 2020 green line to the 2024 purple line, showcasing the significant price increases over time.
Average prices increased across all Rhode Island counties in 2024, with gains ranging from 6.1% to 13.4%. This highlights widespread demand, extending beyond coastal and urban areas. Notably, the significant growth in every county suggests a trend of people moving further from city centers.
2024 Listings Rise for the First Time in Two Years
After two years of sharp declines in home listings, including 2023’s record low since 1994, 2024 saw a 10.1% increase in new listings. Many sellers, reluctant to give up pandemic-era mortgage rates, had kept inventory tight, leaving buyers with limited options. However, as circumstances changed, many decided it was time to move on, leading to a notable rise in listings. While the 15,000 homes listed in 2024 still fall short of the long-standing norm of around 20,000 give or take annually, this upward trend suggests that 2025 may offer more inventory and greater selection for buyers.
Pending Sales Increased by 5%
2023 ended with the lowest number of pending sales since 2011 due to lack of supply, not demand. Fortunately, 2024 saw an increase in pending sales which contributed to the rise in closed sales. The 5% rise ended 2024 with 11,155 pending sales compared to 10,911 the previous year.
Rhode Island Housing Inventory is Still Anemic
In 2024, as shown by the purple line, inventory showed a steady rise over 2023 from April through December. The increase in inventory is a sign that the market grid lock is starting to let go a bit. Still, the level of inventory now contrasts strikingly when compared to pre-2020 inventory levels, which typically ranged between 5,500 and 6,500 homes. In contrast, recent years have seen drastically lower levels, with inventory dropping as low as roughly 1,700 in December of 2023.
Will the 2025 Real Estate Market Improve?
In 2025, Rhode Island’s real estate market is expected to experience moderate growth, with home prices rising at a slower pace compared to recent years. The National Association of REALTORS® forecasts a nationwide increase of 2% in home prices, with Providence highlighted as one of the top housing market hot spots.
Stabilizing mortgage rates, likely hovering around 6%, and an increase in housing inventory are expected to create better opportunities for buyers, particularly those who have struggled with fierce competition in previous years. Active buyers must be proactive and well-prepared to act quickly when they find a property that meets their needs. However, affordability challenges will likely persist, driven by the state’s historically high property values and elevated cost of living.
The rental market is also expected to remain expensive, as rising demand for rental properties outpaces supply, leaving little relief for renters. For sellers, the market is anticipated to remain strong but more balanced, requiring realistic pricing to attract buyers in a slightly less heated environment.
Overall, the Rhode Island housing market is expected to stabilize, creating a healthier dynamic between supply and demand, and setting the stage for a more sustainable pace of growth. As Anthony stated in his 2025 Predictions, “I believe 2025 will mark the beginning of this recovery, with 2026 poised to be a historic year for the industry as sales normalize.”