There's a lot going on in the market right now! Click on the link to see the data that I use to learn about the market.
It's all the rage to talk about interest rates and whether or not there's going to be a market crash. I'll keep saying it: avoid the click-bait! The economic forecasts have recently been better than expected. Inflation wasn't as high as they expected last week & interest rates responded favorably to the news & came down a bit---they're at 5.99% range right now for top tier credit scores. While 5.99% interest rates aren’t anything to write home about, the fact that the peak of rates may be behind us certainly is. Right now is actually a GREAT TIME for buyers---there's not a lot of competition for single family properties in the range of $350k+ but that's going to change after the holidays. If rates go down a little more we'll see more buyers back in the market which will mean more competition for limited inventory= multiple offers on properties.
We have definitely seen a price correction in several markets. What would have sold for $x in April is selling for 10% or less right now unless the property appeals to a very large buyer pool.
I'll keep putting out this reminder: if you intend to buy or sell in 2023 please reach out to me after the holidays so that we can get a solid plan in place.
If you are Selling, I need to get your documents signed at least two months BEFORE the listing is posted on mls & your photos at least one month before so that we can put our marketing campaign in place.
If you are considering buying (or buying and selling) but you're not sure if it's a wise move this year please let's have a zoom chat & talk through your best options!
Real estate markets can turn on a dime. We all saw that firsthand over the past two years. The pandemic brought about a feeding frenzy in the housing market, seemingly overnight. We were already in a strong sellers market due to low inventory in early 2020 but the pandemic took it to a whole other level, the likes of which no one was ready for or had predicted. I had clients whose property value increased by as much as 40% in one year! On average, there was a 20% increase year over year. When you look at historical data, annual appreciation for real estate hovers around 3-5% so that is a significant amount in just one year!
Mortgage interest rates drive buyer demand & housing supply (inventory) drives housing prices. Millennial's account for 43% of buyers (estimated at 80 Million) and they are not going to stop buying homes. However, with interest rates in the mid 7%, and potentially hitting 8%, buyer demand has slowed--some buyers are priced out until rates (hopefully) go lower, some have chosen to wait for rates to go down---I think this is potentially a big mistake as I don't believe that prices are going to significantly go down & there is a unique opportunity for buyers right now.
Inventory in Rhode Island has slightly ticked a bit higher but overall we still have extremely low inventory and only a 1.7 months supply as of RIAR's most recent data release. There isn't any reason to believe that inventory would increase significantly enough to tip the scales. We're not building new homes in Rhode Island (at least not enough to make much of a difference at all and new builds are primarily priced $500k+). And there's no reason to believe that a wave of foreclosures is on the horizon (more on that below).
I'm seeing the current difference in the market from two perspectives: buyers and sellers.
Buyers: with slightly more inventory comes more options. Nationally, days on market has increased 45% compared to this time last year. The "list today, sold by tomorrow" phenomena seems to be over for now & that is a relief for buyers. There also aren't as many competing offers which means buyers may have leverage for seller concessions such as repair credits, interest rate buy-downs, etc.
Sellers: see above--realistic expectations about how long it's going to take is really important. Also, sellers have had to face the reality that their price expectation may not be a reality right now. And marketing matters! At the end of the day it all comes down to price but positioning the property in the best way possible is crucial.
Let's talk some numbers & data to illustrate why I don't believe we are headed towards a significant price depreciation. I find these graphs super helpful:
The graph above represents national data. Rhode Island inventory is lower than the national data but this graph is still helpful as it's reflective of what we're seeing here in RI. The red spike is what happened in 2007-2010. The drastic influx of available properties is what caused such a steep decline in property values.
The graph above uses Mortgage Credit Availability Index (MCAI) data from the Mortgage Bankers Association (MBA) to help tell this story. In that index, the higher the number, the easier it is to get a mortgage. The lower the number, the harder it is. In the latest report, the index fell by 5.4%, indicating standards are tightening.
During the lead-up to the housing crisis, it was much easier to get a home loan than it is today--I remember that from my personal experience when my ex-husband & I bought our first home. No credit check. No employment verification. As they say, if you could fog up a mirror you could get a loan back then. Back then, lending institutions took on much greater risk in both the person and the mortgage products offered. That led to mass defaults, foreclosures, and, as a result falling prices. Today, things are different, and purchasers face much higher standards from mortgage companies.
Another difference is the number of homeowners that were facing foreclosure after the housing bubble burst. Foreclosure activity has been lower since the crash, largely because buyers today are more qualified and less likely to default on their loans. The graph above uses data from ATTOM Data Solutions to help paint the picture of how different things are this time.
Additionally, homeowners today have options they just didn’t have in the housing crisis when so many people owed more on their mortgages than their homes were worth. Today, many homeowners are equity rich. That equity comes, in large part, from the way home prices have appreciated over time. For those facing challenges today, many have the option to use their equity to sell their house and avoid the foreclosure process.
The median sale price for single family homes in Rhode Island, right now, is $416k. If the market had continued in the manner that it has the past two years we would have hit $499k sometime in 2023. With the way the market is currently moving I predict we will be around $425-430k this time next year. We'll see what happens....
Do you swoon over wide board plank floors, original moldings, post & beam structuring & fireplaces? Then this historic home may be the perfect home for you! Built in 1714, one of the earliest homes in North Smithfield's Union Village, this four bedroom Colonial-era home features richly detailed woodwork with modern amenities.
There are six fireplaces constructed around a center chimney, old growth hardwood flooring throughout, two stairways, & eat-in farmhouse style kitchen. Leading from the kitchen is a formal dining room with a large fireplace, from there you find two family rooms, an office area, half bathroom & laundry room. The second level provides four bedrooms encircling the center chimney & a full bath. There are two large walk in closets off the primary bedroom, one currently used as a nursery. The full bathroom has been tastefully updated.
The yard is a gardener’s dream & has plenty of space for play or entertaining; a screened in porch, new play structure, stone patio, a firepit, & two car garage--there’s something for everyone! The yard is surrounded by established perennial flower gardens which have something blooming Spring through Fall. The yard also features two huge garden areas including a newly established orchard with ten dwarf fruit trees in the front yard. Modern amenities include a young gas heating system, Nest thermostats, central AC on the second level & more! Enjoy the full benefits of living in the country, with just a short commute to Providence or Worcester.
Take a look at this lovely, single level home located in the Eastward Look neighborhood of Narragansett & within walking distance to Scarborough Beach. Featuring three bedrooms and one full bathroom, this well maintained home is situated on a large lot and has newly installed hardwood flooring throughout, new windows installed in 2019, updated mechanicals and is connected to town utilities. The private backyard features a large deck and a storage shed. The curved driveway in the front offers easy & ample parking. This property can be sold with most furniture and is located in an ideal location for a rental property, just minutes to Narragansett Pier and downtown historic Wakefield. Make this your new home or your perfect vacation retreat!
Take a look at this charming Two Unit property located in the Silverlake neighborhood of Providence. This property features two bedrooms in each unit, a brand new roof, plenty of off street parking, and lovely curb appeal! Upon entering the front entrance, the first floor unit opens up to a sun lit living room with tall ceilings and hardwood flooring throughout. The two bedrooms are spacious and feature large windows and decent closet space. The eat in kitchen has ample cabinet and counter space. The back entrance is off of the kitchen. The second floor unit also features two bedrooms, hardwood floors, lots of natural light, and tall ceilings. The primary bedroom also features a large walk in closet. The eat in kitchen has a gas stove with newer appliances. The basement has been fully parged and offers plenty of storage space. There are two electric panels, two forced hot air gas heating systems, and two hot water tanks. This property offers a small, fenced yard and ample parking for up to four cars. Don't miss your opportunity for this lovely property!
First Floor: Month to month lease; rented for $850 per month. Market rent would be $1200-1400
Second Floor: rented by a relative, month to month for $800 per month. Market rent would be $1200-1300
Roof: newly installed July 2022
Heating Systems: forced hot air, gas, age unknown
Hot Water: two tanks, one dated 2014 the other dated 2017 both are gas fired
Off Street parking for up to 4 cars
Here are some of my very favorite Rhode Island farms---ideal for picking apples & pumpkins, corn mazes, & (my favorite) Apple Cider donuts!
Barden Family Orchard
Hard Pressed Cider Co
Carpenters Farm Stand
Spring Hill Sugar House
These certainly aren't the only farms in Rhode Island. Looking for a complete list? Check out Farm Fresh RI!
Take a look at this beautiful two bedroom townhouse located in the heart of Pawtuxet Village. Featuring hardwood floors throughout, this end unit offers a bright and airy living room with a gas fireplace and glass sliders with a balcony overlooking a quiet forest and the Pawtuxet River. The kitchen area has ample cabinet storage and stainless steel appliances. The second floor features two bedrooms with generous closets and a full bathroom. This townhouse boasts a lower level garage with an additional bonus room for laundry that could also accommodate a home gym or office. This unit has it all: tasteful updates, plenty of natural sunlight, a private balcony for your outdoor retreat, and is in a prime location in a well managed complex. With just a short distance to Pawtuxet Village and Gaspee Point, restaurants, parks, and shops, you won't have to go far for anything! Enjoy all of the activities and dining that the area has to offer without having to worry about parking! Don't miss out on this great opportunity and book your showing today!
Live in the heart of the East Side of Providence in a sunny 1880’s cottage filled with charming detail. This rare single-family home is a perfect condo alternative for those seeking privacy and a garden. This cozy home features hardwood floors, original moldings, antique door knobs as well as modern updates including a custom kitchen with a fireplaced dining area, ample storage and lighting, and European stainless steel appliances. The spacious, bright living room opens into a front parlor showcasing sunset views of the State House. The first floor also features a half bath. The second floor offers three bedrooms and a full bath with a clawfoot tub and laundry. A full basement and attic provide additional storage. A French door leads from the kitchen to a garden with well-tended perennials, a raised bed for vegetables and a private firepit nook. In addition to the garage there is an outbuilding with new electrical wiring that is used for seasonal entertaining and work space, but could easily become a year-round studio, guest room or secret clubhouse! Located on a friendly, diverse, quiet block that’s an easy walk to groceries, shopping, local Y, parks, train station, Brown University, RISD, and downtown. Or stay right at home in your very own (actually featured in a storybook!) cottage!
Welcome to this two bedroom cottage with a warm rustic charm! The spacious and bright living room welcomes you right in and features a cozy wood-burning stove. Flow over to the kitchen that has an ample amount of cabinet and counter space so you can whip up your favorite meal with family and friends with ease. Enjoy your morning cup of coffee in the quaint sunroom breakfast nook that overlooks your tranquil surroundings and has a door that leads you out into the backyard. Take advantage of the den area to create your own home office, a family room, or whatever your needs may be! Sit out on the enclosed front porch to admire the large garden area and the peace and quiet. You can appreciate the lovely nature views that every window in the home provides! The private wooded lot gives you plenty of opportunities to create your own oasis to sit back and relax in. Even with feeling completely tucked away, you get the luxury of being conveniently close to Route 6 which has restaurants, stores, shops, and everything you need. Including the town hall, library, post office, and police station within walking distance! One major upgrade includes a new roof installed in 2020. Don't miss out on this rare gem. Click on the buttons below for more info!
Buying or Selling? Here's some useful advice!