With mortgage interest rates rising and fewer single-family homes selling for more than the asking price, City Assessor Neal Dupuis sees the housing market stabilizing.

“It is definitely stabilizing and hopefully it doesn’t go too far in the other direction,” said Dupuis in an interview Monday.

The hot real estate market of the past couple of years when the median price of Rhode Island homes nearly doubled is showing signs of cooling. The median price of a single home was $405,000 in August according to the Rhode Island Association of Realtors. The median price in Warwick with 121 sales during August was $355,000 or $30,000 more than August 2021.

“We’re seeing more houses hit the market,” said Dupuis, “although it is not back to where we’ve historically been.”

Based on its August numbers, the real estate association reported sales activity continued to fall for the seventh consecutive month, dropping 11.4 percent from 12 months earlier. The number of days a home stayed on the market remained unchanged at 29 days, as did the 1.8-month supply of inventory – which remained well below that of a balanced market indicated by a six-month supply of homes available for sale.

How might this bear on the citywide statistical revaluation that was to have been implemented as of Dec. 31, 2021, but at Mayor Frank Picozzi’s request and backed by the City Council was postponed?

At that time, Dupuis said the market was unstable and it would be best to let it settle before moving ahead with the revaluation. The assessor’s office continues to monitor the market and is working on the premise that a revaluation will be implemented as of this Dec. 31.

However, says Dupuis the city won’t get a complete picture until February and March of next year when the analysis of values as of Dec. 31 is finalized. Dupuis said postponing the revaluation for another year is “an option” although he is not suggesting it at this time.

Dupuis hasn’t seen an increase in foreclosures, an indication of a recession, although he fears higher interest rates could have that effect. He noted that those who locked into low interest rates and can’t balance their home budgets because of the escalating cost of utilities, food and gasoline don’t have the option of lowering monthly home expenses by refinancing their mortgage. With higher prices across the board, he questions whether homeowners would qualify to refinance.

“Though inventory is increasing slightly, options are still extremely sparse. That, and the increase in mortgage rates, is reducing the number of buyers in the market. However, there may be options, even with increased rates, to lock into stable housing payments through home ownership and in doing so, gain the chance to build wealth through equity. They should also be aware, if they’re waiting for prices to fall substantially, that likely won’t happen any time soon given the housing shortage that still exists,” Agueda Del Borgo, President of the Rhode Island Association of Realtors said in a release.

In an interview Monday, Del Borgo said first time homebuyers are being hit hardest by the increased mortgage rates as they can’t sustain the monthly payments. In addition, she said, these potential buyers no longer qualify for a mortgage based on their monthly expenses relative to their income.

At one point in the past two years, Del Borgo said 25 percent of single home sales statewide were to buyers from out of state and in some communities as much as 50 percent. The pandemic, with people looking for alternatives to city living and the ability of working from home, were seeing as driving the demand.

Del Borgo sees the state’s amenities and selection of properties as being the big attraction.

While his department does not keep a record of the number of Warwick homes selling for more than $1 million, Dupuis was not surprised to learn of two recent waterfront sales exceeding $1 million, one on Warwick Neck and a second in Conimicut.

“One million is not a legitimate read on the market,” he said. Nonetheless, Dupuis added, “I know we have a lot of good homes.”

Asked about the revaluation, Dupuis said the city paid about $235,000 of the $289,000 contract it had with Vision Government Solutions to perform the revaluation. He projected the city would pay no more than an additional $90,000 for Vision Government Solutions to complete the revaluation as of Dec. 31, 2022.

Dupuis is exploring a means of classifying properties so as to level out the bumps of a volatile market. He said the change would require legislation and at this point it is in the conceptual stage.