PROVIDENCE, R.I. (WPRI) — The housing market was on fire in 2020 in a way that’s never been seen before, and those trends appear to be continuing into 2021, according to Rhode Island Association of Realtors President Leann D’Ettore.
“We have never seen the value of inventory this low,” D’Ettore said. “We have never seen the amount of home sales this high.”
D’Ettore said the pandemic changed people’s perspective of what is considered to be the perfect home.
“We found that a lot of buyers needed to assess their living priorities,” she said. “A lot of buyers seem to be looking for a more sufficient space to live and work.”
She attributes the housing boom to locals spending more time at home and out-of-staters taking advantage of the state’s beauty.
“Coastal areas, open space … Rhode Island has an abundance of open space and the only thing we don’t have is enough supply,” D’Ettore said.
D’Ettore said the “normal amount” of supply for single-family homes is approximately six months, but right now, there’s only a 1.3-month supply.
The median price of a single-family home has grown by 12.6%, according to data collected by the R.I. Association of Realtors. In January 2020, the median price was $296,750, but it jumped to $334,000 by January of this year.
The data also revealed there was a little more than 22% increase in homes sold this in December of last year compared to the same time in 2019.
D’Ettore said the low single-family home inventory is driving up the demand, which is causing “bidding wars” among buyers.
All buyers, according to D’Ettore, have to submit an offer by a deadline, which she said is the best way to keep things fair for all buyers.
“It’s not like going back and forth with, per se, something called a ‘bidding war,’ but it’s called the highest and best scenario and there’s no way to avoid it,” D’Ettore explained.
D’Ettore suggested potential home buyers work closely with a real estate agent so they will stand out against competition and stay ahead of the game.
“If you work with a buyer’s realtor, one of the most valuable aspects of doing so is you’re able to receive a listing as soon as it hits the market,” she said.
Lawrence Yun, the chief economist for the National Association of Realtors, predicts home values will increase about 8% within the next year and 5.5% in 2022.
“Our numbers in our state coincide with that,” D’Ettore added.
While the demand for a single-family home is high nationally, D’Ettore said locally, they’ve seen an increase in condo sales because there’s more supply and a condo’s sales price is lower than that of a single-family home.