Providence Will Be Among The Hottest US Housing Markets in 2024

PROVIDENCE − Providence will be the fifth-hottest housing market in the country in 2024, according to real estate listing site Zillow.

Zillow's report puts Providence's housing market just below Buffalo, New York; Cincinnati, Ohio; Columbus, Ohio and Indianapolis, Indiana.

The report looked at the top 50 metropolitan areas by population and used calculations for forecast home value appreciation, number of days a house was listed, building permits, projected changes in the labor market and the number of owner-occupied houses.

"2024's hottest markets all boast solid economic fundamentals, relatively fast-moving for-sale housing inventory, plentiful likely buyers and expectations for stable home values," report author Anushna Parkash wrote.

November's housing numbers: House prices and interest rates are down in Rhode Island, but does it really matter?

Little supply, with the number of homes on the market at multi-year lows, helps define a hot market, along with the speed at which homes sell.

"It’s likely that these low inventory markets, in which buyers had the hardest time finding a home and homes generally sold very quickly in 2023, will continue to experience outsized demand (relative to supply) in 2024, compared to other markets," she wrote.

Why was Providence ranked as one of the 'hottest' markets?

In Providence in November, the 45 single-family houses that sold were on the market for an average of 20 days, down from 27 days a year earlier. That held consistent with sales in the third quarter, when the number of days a house was on the market averaged 21 across 162 sales.

Across Rhode Island in the third quarter, 569 single-family houses sold, with Providence accounting for 29% of those sales.

More: What were the most expensive homes sold in Rhode Island in 2023?

Unlike the rest of the state, in Providence, the number of multi-family home sales in the third quarter came close to the number of single-family home sales, at 134. Just like the single-family counterparts, they spent an average of 21 days on the market. Providence accounted for 33% of the multi-family sales in the state during that time.

Condos in Providence stayed on the market longer, an average 32 days for 89 sales in the third quarter.

In November, there were 1,152 single-family homes listed for sale in Rhode Island, compared with 2,984 in November 2019.

Providence home prices

While Rhode Island's median single-family house price in November was $431,000, it was lower in Providence, at $380,000. However, multi-family houses make up a big proportion of house sales in the capital city, and their prices are much, much higher.

Third-quarter data is used below because town-by-town listings are not readily available for condos and multi-family buildings.

Providence median house prices

• Providence single family, 3rd quarter: $370,000
• State single family, 3rd quarter: $450,000
• Providence multi-family, 3rd quarter: $528,500
• State multi-family, 3rd quarter: $485,500
• Providence condo, 3rd quarter: $379,900
• State condo, 3rd quarter: $379,000

What's driving demand in the hot markets?

Baby boomers are not moving out of their big homes at the same time that millennials, now in their 30s and 40s, are in their "prime home buying years," Parkash wrote.

Baby boomers staying in their homes, or buying additional homes, is a big change from previous generations. The median age of all homebuyers is now 49, up from 31 in 1981, and the first-time homebuyer median age is 35, up from 29 in 1981.

Interest rates have increased significantly, hitting a high of 7.76% in late October, and coming down slowly since. Normally, high interest rates bring down prices by cutting into demand, but the lack of inventory has been keeping prices up.

The pre-pandemic November 2019 median price of a single-family house was $290,000. Prices have since risen 49%.

Article by Wheeler Cowperthwaite

Taken from the Providence Journal