Out-of-State Buyers Pushing RI Home Sales to Record Prices
Friday, December 18, 2020
Rhode Island single-family home sales continued to increase at record level in November according to a report released Thursday by the Rhode Island Association of Realtors.
Closing activity rose 26.4 percent from November of 2019 and the median price of those sales increased 11.4 percent to $323,000.
RI Realtors data also shows an increase in out-of-state buyers, particularly from New York and Massachusetts. Last month, home buyer traffic from those areas grew 159 and 63 percent, respectively, from November of 2019.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST“The features buyers want are changing and that’s fueling demand. Offices or zoom rooms, exercise rooms and open space are very desirable amenities right now. It makes sense for people living in cities and more expensive areas to make a move if they are now able to work remotely in a place that more affordably meets all their needs,” said Leann D’Ettore, president of the Rhode Island Association of Realtors.
According to the realtors, a six-month supply of homes on the market is considered an indication of a market balanced between supply and demand, only a 1.7-month supply of single-family homes remained in Rhode Island’s housing market last month. That represented a decrease from the already low 3.3-month supply seen 12 months earlier. The lack of inventory created fierce competition among buyers, which in turn reduced the number of days a listing stayed on the market from 59 days in November 2019 to 41 days last month.
“The last time we saw such a strong sellers’ market was the early 2000s, but the conditions are completely different now. That frenzy was caused by the rampant availability of sub-prime loans. This time, the market has been driven by scarce inventory, historically low interest rates and buyers’ desire for a comfortable home base in the era of COVID,” said D’Ettore.
The rate of sales shows no sign of slowing down. Incomplete transactions – those properties under contract but not closed within the month - rose 41.7 percent in November compared to the prior year.
Multifamily home Sales Drop and Condo Prices Decrease
In other housing sectors, multifamily property sales dropped marginally while the median price rose by 17.9 percent to $330,100. Condominium sales saw a reverse trend. Sales rose by 10.9 percent last month while the median price dropped by 8.3 percent to $250,000.
“This is the first time all year that we saw a year-over-year dip in median price among condo sales. Overall, condo prices have remained relatively stable. Condos remain a good option for first-time home buyers, as the entry level price tag tends to be lower than multifamily and single-family homes,” said D’Ettore.
The National Association of Realtors predicted in a recent Real Estate Forecast Summit that in 2020, home sales will reach 5.52 million, the highest annual mark since 2006, with the median home price setting a record high.
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