The latest existing home sales numbers are out. Rhode Island real estate saw a significant drop in single-family home sales in April, with just 524 transactions, a 30% decline from April 2022.
The lack of inventory has emerged as the main problem in the local housing market. There are only 957 single-family homes available for sale in April, a 14.2% decrease from 12 months earlier. (according to RIRealtors.org)
Positive Existing Home Sales News For Rhode Island
However, there is positive news for those looking to own their own home, as prices are stabilizing and the median price in April was just 1.2% more than that of April 2022.
Despite pending sales falling 18.1% compared to 12 months prior, there has been an improvement since the beginning of the year when they hit 40% lower.
Condominium sales were even worse, with closed transactions falling 36.8% year-over-year. Out-of-state buyers are also competing for inventory.
Rhode Island residential homes saw nearly one in four sales involving buyers from other states in the first quarter of 2023.
While the market is tight, a shift is on the horizon as more homes should become available for sale over the next decade with the baby boomer population moving towards retirement.
However, in the meantime, it’s crucial to build more homes for people’s immediate housing needs.
National Home Sales Report
Existing home sales typically increase from February to June, but April saw a decline of 7.6% compared to March across the report’s 49 metro areas. Despite this, new listings increased by 5.6% month-over-month.
However, year-over-year sales were down by 29.5%, while new listings were 22.1% lower. The median sales price rose by 2.3% to $409,000 month-over-month, and inventory inched up by 1.8% over the prior month.
According to Nick Bailey, President and CEO of RE/MAX, LLC, move-up buyers who like their current mortgage rates choose to stay in their homes, causing sales to decrease. Meanwhile, first-time homebuyers are active, and sellers are negotiating more, giving buyers an edge.
Latest Existing Home Sales – Inventory
In Milwaukee, low inventory levels are causing negotiations to increase as sellers experience multiple offers again. Buyers are waiving inspections and adding appraisal gap coverage to assure sellers that they will help cover the gap if the home doesn’t appraise at the purchase value.
Other notable metrics include a 6.2% increase in the median sales price since January, a month’s supply of inventory in April unchanged from March but above the 1.0 a year ago, and an average close-to-list price ratio of 99% in April, down from 103% in April 2022.
Homes sold in April were on the market for an average of 33 days, six days less than in March but ten days longer than in April 2022.
New Listings
In April 2023, new listings increased by 5.6% compared to March 2023 but were down 22.1% compared to April 2022.
San Francisco, CA, Phoenix, AZ, and Seattle, WA had the biggest decrease in year-over-year new listings percentage, while Nashville, TN, Trenton, NJ, and Philadelphia, PA had the biggest increase.
Home Sales Down Overall
The report’s overall number of home sales is down 7.6% compared to March 2023 and 29.5% compared to April 2022, with San Francisco, CA, Portland, OR, and Seattle, WA having the biggest decrease in year-over-year sales percentages.
Median Sales Price of Existing Home Sales
The median sales price in April 2023 was $409,000, up 2.3% compared to March 2023 and down 3.1% from April 2022.
Finally, the average days on the market for homes sold in April 2023 was 33, down six days from March 2023 but up ten days from April 2022.
Housing Inventory
Of the 49 metro areas surveyed, the number of homes for sale in April 2023 was up 1.8% from March 2023 and up 24.3% from April 2022. Based on the rate of home sales in April 2023, the months’ supply of inventory was 1.3, flat compared to March 2023, and increased compared to 1.0 in April 2022.
In April 2023, the markets with the lowest months’ supply of inventory were a three-way tie between Charlotte, NC, Manchester, NH, and Seattle, WA at 0.6. The markets with the highest months’ supply of inventory were New Orleans, LA at 2.6, followed by a tie between Coeur d’Alene, ID, and Miami, FL at 2.5.
What’s An Agent To Do?
As a real estate agent, facing low inventory can be a challenge. Nonetheless, it is important to continue to stay on top of the game and explore new avenues to find potential homes for your clients.
With low inventory, it is crucial to be proactive and engage in every opportunity that presents itself. Whether it be reaching out to homeowners who may be considering selling or digging deeper into off-market properties, a real estate agent must be resourceful in their efforts.
Additionally, it is essential to stay knowledgeable about the local market and keep an eye on any new developments that may lead to potential listings. While low inventory may seem discouraging, it presents a unique opportunity to hone your skills and creativity in the field.
If you need help contact broker/owner Richard Zompa today!
