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Out-of-State buyers are adding to the level of compete for local buyers in RI and beyond
The RI real estate market saw a huge jump in the number of buyers from outside the state in the 2nd quarter. This has been a consistent phenomenon since the onset of the pandemic. Purchases by out-of-state buyers from April to June increased a whopping 69% year-over-year. Where are they coming from? Massachusetts, Connecticut and New York are driving in the majority of buyers although we’ve also seen an increase in buyers from California and Florida. Clearly the seacoast vibe and associated lifestyle, the plethora of great restaurants and quaint seaside communities as well as our proximity to Boston and the PVD hip factor are facilitating this heightened love for Little Rhody!
Click on the link below for where the buyers are flocking to on a national level.
Why 2021 is Still the Year to Sell Your House
Home buying intentions are the strongest they have been in 20 years. 75% of sellers feel now is the ideal time to sell a home. That’s quite a powerful dynamic! Toss in a very low inventory of homes and escalated prices and one can understand why our current real estate market here in RI and elsewhere is one of very high velocity!
Let’s dive deeper into why it is still a GREAT time to list your home for sale.
If you’re trying to decide whether or not to sell your house, this is the time to think seriously about making a move. Fannie Mae’s recent Home Purchase Sentiment Index (HPSI) reveals the number of respondents who say it’s a good time to sell is higher now than it was over the past few summers (see graph below). Today, the majority of consumers, 75 percent, say it’s a good time to sell a house.
Why is sellers sentiment up year-over-year?
The higher good time to sell sentiment has to do with today’s market conditions, specifically low housing supply and high buyer demand. In the simplest terms, we don’t have enough houses available for sale to meet buyer demand.
According to the latest data from the National Association of Realtors (NAR), we’re still firmly in a sellers’ market because housing supply is well below a balanced norm (shown in the graph below). 
Clearly, the scales are tipped in a seller’s favor today. But while housing supply is undeniably low, the right side of the graph shows how the inventory situation is improving little by little each month as more sellers list their homes for sale. I am seeing an uptick in listings daily across all of RI and the parts of Southern Ma in which I serve.
As a seller, that means each month, buyers have more options to pick from. By extension, that means your house may get less buyer attention with time. Danielle Hale, Chief Economist for realtor.com, explains it like this:
“More homeowners continue to list homes for sale compared to a year ago… Notably, while new listings continue to lag behind a more ‘normal’ 2019 pace, the gap is shrinking. Even though homes continue to sell quickly thanks to high demand and limited supply, new listings are subtly shifting the balance of market conditions in favor of buyers.”
So, what’s that mean for you?
If you’ve been waiting for the perfect time to sell, there may not be a better chance than right now. Inventory is gradually increasing each month, so selling sooner rather than later will help you maximize your home’s potential.
Bottom Line
If you’re planning to sell your house, 2021 is still the year to do it. The unique mix of low supply and high demand won’t last forever. The demand for housing here in RI is still at an all-time high. Since the onset of the pandemic we have been seeing an incredible amount of buyer traffic from Boston, Southeastern MA , CT and NY. Add in all the “lateral” moves many Rhode Islanders are doing within state due to changing lifestyle needs, remote work scenarios and/or the need for a stronger school system etc and that equates to a lot of buyer traffic! All of that buyer demand has put a real strain on our meager supply which results in escalated sales prices for our RI sellers!
Let’s connect to discuss what you need to do now to sell your house and take advantage of this sellers’ market.
Real Estate: It’s Still a Lack of Supply, Not a Lack of Demand
I’ve been meeting with several homeowners lately throughout RI and in Southeastern, Ma to discuss the local market conditions as a means of determining if they should put their home on the market. Positioning oneself for the highest rate of success has always been my goal as a student, athlete, teacher and now Realtor AND it’s the lens through which I gaze when analyzing each client’s unique selling and buying scenario.
How can I position my clients in a way that maximizes their return on a sale or in value on a purchase? How can I also infuse joy and reassurance during the transaction process? Those thoughts are ones that infiltrate the Agent Huard headspace starting early in the morning and remaining late into the evening.
Looking at the real estate market on the macro-level to gain an understanding of the current trends and conditions is paramount in obtaining a solid foundation upon which we can then place the micro markets. Real estate activity is far from instantaneous and thus it is essential to learn what’s happening now in order to ascertain a sense of what will happen with the market later. Gaining an understanding of buyer behavior is pivotal to gaining a more comprehensive understanding of this complex market.
Let’s focus on what is fueling the incredible year- over- year appreciation in home values both nationwide and here in RI and MA.
One of the major questions real estate experts are asking today is whether prospective homebuyers still believe purchasing a home makes sense. Some claim rapidly rising home prices are impacting demand and, by extension, leading to the recent slowdown in sales activity.
However, demand isn’t the real issue. Instead, it’s the lack of supply (homes available for sale). An article from the Wall Street Journal shows this is true for new home construction:
“Home builders have sold more homes than they can build. Now they are limiting their sales in an effort to catch up.”
The article quotes David Auld, CEO of D.R. Horton Inc. (the largest homebuilder by volume in the United States since 2002), explaining how they don’t have enough homes for the number of buyers coming into their models:
“Through our history, to have somebody walk into our models and to tell them, ‘We don’t have a house for you to buy today’, is something that is foreign to us.”
Danielle Hale, Chief Economist for realtor.com, also explains that, in the existing home sale market, the slowdown in sales was a supply challenge, not a lack of demand. Responding to a recent uptick in listings coming to market, she notes:
“. . . if these changing inventory dynamics continue, we could see a wave of real estate activity heading into the latter part of the year.”
Again, the buyers are there. We just need houses to sell to them.
If the slowdown in sales was the result of demand waning, we would start to see home prices beginning to moderate – but this isn’t the case. As Mark Fleming, Chief Economist for First American, explains:
“There’s a lot of conversation around rising prices and falling quantity in the housing market, and there’s this concept, or this idea, that it’s a demand-side problem . . . . But, if demand were falling dramatically, we would actually see less price pressure, less home price growth.”
Instead, we’re seeing price appreciation accelerate throughout this year, as evidenced by the year-over-year percentage increases reported by CoreLogic:
- January: 10%
- February: 10.4%
- March: 11.3%
- April: 13%
- May: 15.4%
- June: 17.2%
(July numbers are not yet available)
There’s a shortage of listings, not buyers, and there are three very good reasons for purchasers to still be interested in buying a home this year.
1. Affordability isn’t the challenge some are claiming it to be.
Though home prices have risen dramatically over the last 18 months, mortgage rates remain near historic lows. Because of these near-record rates, monthly mortgage payments are affordable for most buyers.
While homes are less affordable than they were last year, when we adjust for inflation, we can see they’re also more affordable than they were in the 1970s, 1980s, 1990s, and much of the 2000s.
2. Owning is a better long-term decision than renting.
A recent study shows renting a home takes up a higher percentage of a household’s income than owning one. According to the analysis, here’s the percentage of income homebuyers and renters should expect to pay now versus at the end of the year.
While the principal and interest of a monthly mortgage payment remain the same over the lifetime of the loan, rents increase almost every year.
3. Owners build their wealth. Renters build their landlord’s wealth.
Whether you’re a homeowner or an investor, real estate builds wealth through growing equity year-over-year. If you own, your household is gaining the benefit of that wealth accumulation. Fleming says:
“The major financial advantage of homeownership is the accumulation of equity in the form of house price appreciation . . . . We have to take into account the fact that the shelter that you’re owning is an equity-generating or wealth-generating asset.”
Odeta Kushi, Deputy Chief Economist at First American, elaborates in a recent article:
“. . . once the home is purchased, appreciation helps build equity in the home, and becomes a benefit rather than a cost. When accounting for the appreciation benefit in our rent versus own analysis, it was cheaper to own in every one of the top 50 markets, including the two most expensive rental markets, San Francisco and San Jose, Calif.”
Today, that equity buildup is substantial. The National Association of Realtors (NAR) reports:
“The median sales price of single-family existing homes rose in 99% of measured metro areas in the second quarter of 2021 compared to one year ago, with double-digit price gains in 94% of markets.”
In 94% of markets, there was a greater than 10% increase in median price. That means if you bought a $400,000 home in one of those markets, your net worth increased by at least $40,000. If you rented, the landlord was the recipient of the wealth increase.
Bottom Line
For many reasons, housing demand is still extremely strong. The last four listings I have had in East Providence, Barrington and Seekonk have all gone under contract within a maximum of 4 days at significantly over asking prices AND I am receiving 6-15 offers on each listing. Clearly here in RI and MA and nationwide, what we need is more supply (house listings) to meet that demand.
Renovations 101
The Best Use of Time (and Money) When It Comes to Renovations
In the current sellers’ market, many homeowners wonder what, if anything, needs to be remodeled before they list their house. That’s where a trusted real estate professional like yours truly comes in. I can help you think through today’s market conditions and how they impact what you should – and shouldn’t – renovate before selling.
Here are some considerations I will guide you through:
1. With current supply challenges, buyers may be willing to take on projects of their own.
A more balanced market typically sees a 6-month supply of homes for sale. Above that, and we’re in a buyers’ market. Below that, and we’re in a sellers’ market. According to a recent reportby the National Association of Realtors (NAR), our current supply of homes for sale, while rising, still remains solidly in sellers’ market territory:
“Unsold inventory sits at a 2.6-month supply at the current sales pace, modestly up from May’s 2.5-month supply but down from 3.9 months in June 2020.” (Current inventory in Rhode Island is at a 1.7 month supply)
So, what does that mean for you? If you’re a seller trying to decide whether or not to renovate, this is especially important because it’s indicative of buyer behavior. When there aren’t enough homesfor sale, buyers may be more willing to purchase a home that doesn’t meet all their needs and renovate it themselves later.
2. Not all renovation projects are equal.
You don’t want to spend time and money on a project that isn’t worth the cost or is too niche design-wise for some homebuyers. According to an article by Renofi.com, basing home updates on what’s trendy right now can be a costly mistake:
“The last thing you as a homeowner want to do is center your home design around a passing fad – even worse, one thats design quality won’t last a good while.”
Before making any decisions, reach out to me. I have insight into what other sellers are doing before listing their homes and how buyers are reacting to those upgrades. Don’t spend the time and money to be trendy – if your buyer wants to upgrade to the newest fad later, they can.
3. If you’ve already made upgrades this past year, your agent can help spotlight them.
If you have already completed some renovations on your house, you’re not alone. The pandemic kept people at home last year, and during that time, many homeowners completed some home improvement projects. HomeAdvisor’s 2021 State of Home Spending Report found:
“35% of households that completed an improvement project undertook some type of interior painting, while 31% completed a bathroom remodel and 26% installed new flooring.”
Let me know if you fall in this category. I can highlight any recent upgrades you’ve made in your house’s listing.
Bottom Line
When it comes to renovations, your return-on-investment should be top of mind. Let’s connect today to talk through any upgrades you’ve already made and to find out what you should prioritize before you sell to maximize your house’s potential. Getting your house ready for the market is also an essential process and one I love helping my clients engage in. I’m passionate about what I do and the people I represent. My goal is to bring you success and happiness!
First Time Homebuyers Still Face a Marathon, Not a Sprint According to MCSIR’S Huard
Honored to have been invited back in to GoLocalProvLive to talk ALL things RI real estate. Breaking down the national and local trends in real estate is what I LOVE to do! I consume real estate news constantly and with incredible enjoyment and am blessed to be KNEE deep in sales across the state and now in MA. Providing current market trends, news and behavior insight to my clients on a daily basis is what enables them to position themselves with the greatest strength in either the buying or selling position. If you haven’t watched GoLocalProvLive I encourage you to do so. Josh Fenton is incredibly bright, dialed-in, engaging and insightful. You never quite know where the conversation will lead! As a former tennis player, the way he keeps me on my toes during our live interviews is RIGHT up my Alley! Click on the link below for the interview!
What Does our Housing Supply Mean for Sellers?
A Look at Housing Supply and What It Means for Sellers
When I was interviewed last week on GoLocalProvLive we addressed the housing supply. How can we not? It’s simply at its lowest point that it’s been at in decades. Why is it so low? It’s a cumulative effect of lack of new construction woes which have been heightening since the mid 2000s and the resistance of many home sellers to put their existing homes on the market due to concerns of the pandemic and moreso the lack of options for buying once they sell! We were nearly 3 million units short before the pandemic. That is huge. Then you bring in the massive influx of buyers at peak home forming stage , our largest demographic, eager to buy plus the newly discovered need TO move felt by many homebound residents and the demand is “off the chain.” Let’s drill down a bit more on our lack of inventory and learn about the implications.
One of the hottest topics of conversation in today’s real estate market is the shortage of available homes. Simply put, there are many more potential buyers than there are homes for sale. As a seller, you’ve likely heard that low supply is good news for you. It means your house will get more attention, and likely, more offers. But as life begins to return to normal, you may be wondering if that’s something that will change.
While it may be tempting to blame the pandemic for the current inventory shortage, the pandemic can’t take all the credit. While it did make some sellers hold off on listing their houses over the past year, the truth is the low supply of homes was years in the making. Let’s take a look at the root cause and what the future holds to uncover why now is still a great time to sell.
Where Did the Shortage Come From?
It’s not just today’s high buyer demand. Our low supply goes hand-in-hand with the number of new homes built over the past decades. According to Sam Khater, VP and Chief Economist at Freddie Mac:
“The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes.”
Data in a recent report from the National Association of Realtors (NAR) tells the same story. New home construction has been lagging behind the norm for quite some time. Historically, builders completed an average of 1.5 million new housing units per year. However, since the housing bubble in 2008, the level of new home construction has fallen off (see graph below):
The same NAR report elaborates on the impact of this below-average pace of construction:
“. . . the underbuilding gap in the U.S. totaled more than 5.5 million housing units in the last 20 years.”
“Looking ahead, in order to fill an underbuilding gap of approximately 5.5 million housing units during the next 10 years, while accounting for historical growth, new construction would need to accelerate to a pace that is well above the current trend, to more than 2 million housing units per year. . . .”
That means if we build even more new houses than the norm every year, it’ll still take a decade to close the underbuilding gap contributing to today’s supply-and-demand mix. Does that mean today’s ultimate sellers’ market is here to stay?
We’re already starting to see an increase in new home construction, which is great news. But newly built homes can’t bridge the supply gap we’re facing right now on their own. In the State of the Nation’s Housing 2021 Report, the Joint Center for Housing Studies of Harvard University (JCHS) says:
“…Although part of the answer to the nation’s housing shortage, new construction can only do so much to ease short-term supply constraints. To meet today’s strong demand, more existing single-family homes must come on the market.”
Early Indicators Show More Existing-Home Inventory Is on Its Way
When we look at existing homes, the latest reports signal that housing supply is growing gradually month-over-month. This uptick in existing homes for sale shows things are beginning to shift. Based on recent data, Odeta Kushi, Deputy Chief Economist at First American, has this to say:
“It looks like existing inventory is starting to inch up, which is good news for a housing market parched for more supply.”
Lawrence Yun, Chief Economist at NAR, echoes that sentiment:
“As the inventory is beginning to pick up ever so modestly, we are still facing a housing shortage, but we may have turned a corner.”
So, what does all of this mean for you? Just because life is starting to return to normal, it doesn’t mean you missed out on the best time to sell. It’s not too late to take advantage of today’s sellers’ market and use rising equity and low interest rates to make your next move.
Bottom Line
It’s still a great time to sell. Even though housing supply is starting to trend up, it’s still hovering near historic lows. Let’s connect to discuss how you can list your house now and use the inventory shortage to get the best possible terms for you.
Housing Supply is Rising (somewhat)…What does it mean for you?
Housing Supply Is Rising. What Does That Mean for You?
An important factor in today’s market is the number of homes for sale. While inventory levels continue to sit near historic lows, there are indications we may have hit the lowest point we’ll see. Odeta Kushi, Deputy Chief Economist at First American, recently said of our supply challenges:
“It looks like inventory may have hit a bottom (we’ve seen this in the higher frequency data as well). Unsold inventory in May was at 2.5 months supply, up from 2.4.”
To put it into perspective, the graph below shows levels of inventory rising since the beginning of the year:
We’re still not close to a balanced market, which would be a 6 months’ supply of homes for sale. However, we are seeing a slow but steady increase in homes coming up for sale. And that leaves many buyers and sellers wondering the same thing: what does that mean for me?
Buyers: More Options Are Arriving, so It’s Time To Act
If you’re a buyer, more inventory coming to market is a welcome sight. More supply means more options and less competition, which could mean fewer bidding wars.
According to the latest Monthly Housing Market Trends Report, supply levels are continuing to increase, which is different from the typical summer market:
“In June, newly listed homes grew by 5.5% on a year-over-year basis, and by 10.9% on a month-over-month basis. Typically, fewer newly listed homes appear on the market in the month of June compared to May. This year, growth in new listings is continuing later into the summer season, a welcome sign for a tight housing market.”
If you’re having trouble finding your next home, this news should give you the hope and motivation to keep your buying process moving forward. Experts project mortgage rates will begin increasing, which will make purchasing a home less affordable as time passes. You can still capitalize on today’s low interest rates, so stick with your search as more homes come to market.
Sellers: Our Supply Challenges Aren’t Over Yet, so Now Is the Time To Sell
If you’ve been putting off selling your house, you shouldn’t wait much longer. The year’s month-over-month gains in homes for sale have helped buyers, but we’re still very much in a sellers’ market.
As the graph below shows, even with the number of homes for sale rising, we’re still well below the supply levels we’ve seen historically:
Of course, more homes are coming to market now, and more are expected in the coming months. Selling your house this summer gives you the chance to get ahead of the competition and maximize your sales potential before more homes are put up for sale in your neighborhood.
Bottom Line
More homes for sale means more options for buyers and more competition for sellers. It would be a very welcomed shift here in RI and MA for many a frustrated buyer. Whether you’re looking to buy or sell, let’s connect today to discuss your options and why it’s still a good time to make your move. I would be happy to be of help!
Giving to others by providing value to all of those I “serve” in my community and within my real estate business is what keeps this engine fueled by unparalleled passion and drive!
Being introduced to someone who espouses that which I hold near and dear to my heart and my core made an incredible impact on me. I have never read material that resonated so completely and comprehensively with how I strive to live each and every day. After making it through seemingly insurmountable health challenges for 2 decades, I truly believe I am “still here” so that I can help people. If you too value giving to others then let me introduce to the world of a “Go- Giver.”
The National Bestseller book “Go-Giver” is considered to be one of the most influential books ever written and was on Hubspots 20 most highly rated sales books. What resonated most vividly for me is that it’s not a “Sales focused” book but more of a soul searching book. The core belief of GIVING to others vs GETTING is what has made this book the most meaningful book I have read. It was through the act of one kind neighbor who surprised me with this book in my mailbox, that I was introduced to incredible Bob Burg and then blessed enough to be afforded the opportunity to interview him. I believe with all my heart that the only reason why I am still here is to help people and to “make better happen” daily. Bob Burg and John David Mann have packed an incredibly powerful message that rests on the premise of GIVING vs. Getting in the confines of this small book. It’s been the most impactful book I have read because it aligns completely with who I am as a Realtor, a community member and a survivor. Let’s get to know the man behind this life-changing approach to life.
https://parkbench.com/blog/author-of-the-go-giver-author-barrington-bob-burg
2 Athletic Field painters create a yard art small business and in so doing infuse beauty & spirit in several local communities
Good people abound…..especially the amazing small business owners I love to support. Thank you to Channel 10 News Reporter Samm Read for shining the light even brighter on these great guys who are infusing joy and a sense of community with each install they do. Thank you RI YARD ART for boosting the joy factor here in Barrington via our flag install. Anything that brings a community together is a GREAT thing and you two are making it happen!!!
Click on the link below to hear about how and why one amazing American Flag was painted onto the Huard lawn and gain insight on how this shared idea of creating a custom yard art side business has added vitality and a feeling of unity and hope in many a New England community!
https://turnto10.com/news/local/athletic-field-painters-turned-friends-create-yard-art-business
4 Major Incentives To Sell This Summer!
While the housing market forecast for the second half of the year remains positive, there may not be a better time to sell than right now. Here are four things to consider if you’re trying to decide if now’s the right time to make a move.
1. Your House Will Likely Sell Quickly
According to the most recent Realtors Confidence Index released by the National Association of Realtors (NAR), homes continue to sell quickly. The report notes homes are selling in an average of just 17 days.
Average days on market is a strong indicator of buyer competition, and homes selling quickly is a great sign for sellers. It’s one of several factors that indicate buyers are motivated to do what it takes to purchase the home of their dreams.
2. Buyers Are Willing To Compete for Your House
In addition to selling fast, homes are receiving multiple offers. NAR reports sellers are seeing an average of 5 offers, and these offers are competitive ones. Shawn Telford, Chief Appraiser at CoreLogic, said in a recent interview:
“The frequency of buyers being willing to pay more than the market data supports is increasing.”
This confirms buyers are ready and willing to enter bidding wars for your home. Receiving several offers on your house means you can select the one that makes the most sense for your situation and financial well-being.
3. When Supply Is Low, Your House Is in the Spotlight
One of the most significant challenges for motivated buyers is the current inventory of homes for sale, which while improving, remains at near-record lows. As NAR details:
“Total housing inventory at the end of May amounted to 1.23 million units, up 7.0% from April’s inventory and down 20.6% from one year ago (1.55 million). Unsold inventory sits at a 2.5-month supply at the present sales pace, marginally up from April’s 2.4-month supply but down from 4.6-months in May 2020.”
There are signs, however, that more homes are coming to market. Odeta Kushi, Deputy Chief Economist at First American, notes:
“It looks like existing inventory is starting to inch up, which is good news for a housing market parched for more supply.”
If you’re looking to take advantage of buyer demand and get the most attention for your house, selling now before more listings come to the market might be your best option.
4. If You’re Thinking of Moving Up, Now May Be the Time
Over the past 12 months, homeowners have gained a significant amount of wealth through growing equity. In that same period, homeowners have also spent a considerable amount of time in their homes, and many have decided their house doesn’t meet their needs.
If you’re not happy with your current home, you can leverage that equity to power your move now. Your equity, plus current low mortgage rates, can help you maximize your purchasing power.
But these near-historic low rates won’t last forever. Experts forecast interest rates will increase in the coming months. Nadia Evangelou, Senior Economist and Director of Forecasting at NAR, says:
“Nevertheless, as the economic outlook for the United States looks brighter for the rest of the year, mortgage rates are expected to rise in the following months.”
As interest rates rise, even modestly, it could influence buyer demand and your purchasing power. If you’ve been waiting for the best time to sell to fuel your move up, you likely won’t find more favorable conditions than those we’re seeing today.
Bottom Line
With supply challenges, low mortgage rates, and extremely motivated buyers, sellers are well-positioned to take advantage of current market conditions right now. We are still at a mere one month’s worth of inventory in much of Rhode Island right now. If you’re thinking about selling, let’s connect today to discuss why it makes sense to list your home sooner rather than later.
