RI home prices hit a new record, but ‘things are hopeful again for buyers’ – The Providence Journal

As vaccination rates rise, more people are becoming comfortable with putting their homes on the market.

Life may be returning to a post-pandemic normal, but Rhode Island’s housing market has yet to cool down as buyers continue to flock from out of state.

The median sales price for single-family homes reached a record high of $385,000 in June, according to statistics released Wednesday by the Rhode Island Association of Realtors. That represents nearly a 25% jump from a year ago.

Properties are also getting snapped up faster: The average number of days that homes stay on the market has fallen by 50% since June 2020, to just 27 days. 

The good news for buyers is that the number of homes on the market is increasing. In May, the Rhode Island Association of Realtors had warned that less than 900 single-family homes were for sale across the entire state, less than a one month’s supply. There’s now enough inventory to last for 1.7 months if sales continue at their current pace — still nowhere near the six-month supply found in a balanced market, but an improvement nonetheless, according to the group. 

“Things are hopeful again for buyers,” said Leann D’Ettore, the association’s president. While many “have just quit looking and gotten discouraged,” a recent drop in mortgage rates coupled with the uptick in listings has led to a renewed sense of optimism, she said. 

The fact that more homes are being listed for sale can partially be attributed to rising vaccination rates, which have made some sellers more comfortable with the idea of strangers touring their house, D’Ettore said.

Another factor — along with a market that’s extremely favorable to sellers — is that federal forbearance programs are slated to end in September. That means that homeowners who were granted a reprieve because they faced financial hardship during the pandemic will have to resume making monthly mortgage payments.

“I think with that winding down, people are saying, ‘I should sell my house,'” D’Ettore said.

Real estate agents who spoke with The Providence Journal said that the ongoing demand for houses is being heavily driven by people fleeing more expensive areas of the country.

“The market is crazy here, but you can still get a lot more house for a lot less money than other places,” said Luis Mateus, who owns Mateus Realty in East Providence.

Jess Powers, an agent who counts buyers as the majority of her clients, said that Providence “has a strong appeal to people from Boston” because it’s less pricy and still possesses a strong local flavor. She’s also worked with a number of transplants from Austin, Texas, another city known for its music and food scene that has become increasingly unaffordable. 

Northern Rhode Island has similarly witnessed “an influx of buyers who had been looking in the Massachusetts market” said Robert Williamson, an agent with Residential Properties who is also the head of the Northern Rhode Island Board of Realtors.

Statewide, competition is stiffest for homes that cost less than the $385,000 median sales price. Cash offers remain common, as do buyers offering to waive an inspection.

One result is that some buyers are starting to show interest in more affordable areas that they might once have overlooked, Powers said. While people tend to “turn their nose up” at the Oakland Beach section of Warwick, that’s beginning to change, and one of her clients was thrilled to find a home near Iggy’s chowder house and a proposed new bike path.

Providence neighborhoods that could start “trending up” include Washington Park and Mount Pleasant, and the section of the West End between Broadway and Atwells Avenue, Powers said. 

While the market may be daunting, people who can afford to buy right now shouldn’t be scared away, Powers added.

“When people start to give up, I say, ‘Listen, if you wait now, and spend another $1,500 to $2,000 a month on rent, you might come back to me next year and prices are going to be 8 or 9 percent higher,” she said. 

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