If you’ve been watching the news lately, you may have seen headlines suggesting that home prices are starting to dip. For second-home owners or prospective buyers in places like Watch Hill, RI, Weekapaug, or Stonington, CT, this can raise questions about whether now is the right time to act. But before rethinking your real estate goals, it’s important to step back and consider the bigger picture.

Yes, a few national metro markets have seen modest price softening. But in luxury coastal areas like Watch Hill and Weekapaug, real estate tends to operate on a different rhythm - more resilient, more long-term. That’s where the Five-Year Rule comes into play.

What Is the Five-Year Rule?

The Five-Year Rule is a well-known principle in real estate: If you plan to own your home for at least five years, short-term fluctuations in home prices rarely matter. Over time, values tend to appreciate, especially in sought-after communities like Watch Hill where inventory is limited and demand is driven by lifestyle, not speculation.

As Lance Lambert, Co-Founder of ResiClub, puts it:

“There’s the ‘five-year rule of thumb’ in real estate—which suggests that most buyers can buffer themselves from mild short-term declines if they plan to own a property for at least that amount of time.”

This rule is especially relevant for second-home buyers in coastal Rhode Island. If you’re investing in a summer home here, chances are you’re in it for more than just the short term - you’re thinking about legacy, lifestyle, and lasting value.

What’s Really Happening in Today’s Market?

While some major U.S. cities have seen home prices dip by about 2.9% since spring 2024, that’s a minor adjustment compared to the 55% national home price growth seen over the past five years. In New England’s coastal enclaves, including Watch Hill real estate and Weekapaug, we continue to see steady demand for unique, high-quality properties.

These areas are defined by their timeless appeal: historic homes, unspoiled beaches, walkable villages, and a close-knit summer community. Short-term market blips are unlikely to impact the long-term desirability or value of owning a home here.

Why Perspective Matters

Even in markets that have cooled slightly, homeowners who purchased five or more years ago are still well ahead. That’s true nationally - and especially true in luxury second-home destinations like Watch Hill, RI.

Looking at long-term data from the Federal Housing Finance Agency (FHFA), home values have appreciated in every U.S. state over the past five years. Rhode Island, in particular, has enjoyed consistent gains, supported by a limited housing supply, scenic appeal, and easy access from New York and Boston.

The Bottom Line

Whether you're considering selling a long-held family property or thinking of buying your first summer home, understanding the Five-Year Rule can provide peace of mind. Watch Hill real estate has historically performed well over time, offering both financial appreciation and cherished family memories.

As a Watch Hill real estate agent deeply familiar with these markets, I can help you take the long view - whether you're planning for the next five years, or the next fifty.

Let’s connect and talk about where you want to be, and how your home in Watch Hill, Weekapaug, or Stonington fits into that vision.