RI sales fell 11.7% but multifamily pending held — why didn't investors flinch?

Question

Rhode Island's September numbers show exactly who flinched when rates crossed 7% — and who didn't.

Per the Rhode Island Association of REALTORS (released Oct 19): single-family sales fell 11.7% year over year and pending sales fell 14.8%, a drop the association noted was almost triple the Northeast as a whole. Condo sales fell even harder, down 28.2%. The single-family median still edged up 0.75% to $534,000, and supply held at 2.9 months — unchanged from a year ago, so this was a demand shock, not an inventory flood.

Multifamily told a different story: closed sales fell 13.9%, but pending sales stayed stable, up 0.5% — the only category where forward demand didn't drop. The multifamily median was $600,000, up from $590,000 a year ago.

I'm a Realtor licensed in RI (Candor Investment Group / eXp Realty) and co-founder of TWM Residential, operating 17+ rental units. My take on why multifamily pending held: a single-family buyer underwrites the payment against one salary, but a multifamily buyer underwrites it against rent from two or three units. At Freddie Mac's 7.24% (Oct 29), that rent offset is the difference between a deal that pencils and one that doesn't.

RI multifamily operators — is pending holding up because rents still cover 7%+ money on the deals you're seeing, or are the buyers in your market mostly making it work with cash and larger down payments instead?

Inder Singh · Answer

Diana, 'the rent is the return' is exactly how I'd put it. On the pending side, what I'm seeing in RI and MA small multifamily is financed buyers still winning the clean, fully-leased deals — they're just underwriting tighter than they did in 2023, with real reserves for insurance and taxes like you flagged. Cash and heavy-down money is winning the tired stuff — estate sales, deferred maintenance, leases below market with no documentation. And you're right that the risk moved: on older triple-deckers it's the insurance reprice at renewal that kills the spread now, not the purchase price. If rates sit near 7% into spring, I think the financed buyer stays in it as long as in-place rents are real — the payment-sensitive single-family buyer is the one who's actually rate-locked.

Diana Khan · Answer

@Inder Singh, I think rental income is definitely part of what makes multifamily attractive when borrowing costs are high. I can't speak to what Rhode Island buyers are doing specifically, but I'd want to see whether the actual rental income can support the property after expenses, not just the projected numbers. Larger down payments can help, but they don't necessarily make a property a good investment.

I'm a real estate attorney, broker, and investor based in Maryland, and I work with clients on rental properties, purchase agreements, and landlord tenant matters. I've seen how important it is to review existing leases, unpaid rent, and other obligations before buying a property. Those details can affect how well the investment actually performs.

Thanks for sharing these numbers, @Inder Singh! It's interesting to see how multifamily and single family activity are moving differently. Happy to stay connected!

RI sales fell 11.7% but multifamily pending held — why didn't investors flinch?

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