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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.
New construction on the uptick!!!
An upward momentum shift in new home construction is a great thing; for the deficit in available housing is a real thing both on a national and local level. The fact that at the onset of 2020, the US was short roughly 3 million units in housing is one that is very hard to overcome. Chipping away at the deficit by “chipping away” at the earth via new builds is an extremely exciting notion. When you factor in the cost of land, the increase cost in raw materials by 150%, permit challenges, the lack of land developers, land AND lack of labor and then the onset of a pandemic, it comes as no surprise that the lack of new construction is significant AND widespread.
Care for a bit of optimism? Click on the link below for a great read by Keeping Current Matters about what is fueling the promising notion that new construction is and will be trending upward!
Are We in a Housing Bubble?
It’s one of the many questions I answered yesterday while being interviewed on GoLocalProv during an interview about Rhode Island real estate. It’s a topic high on the radar of many buyers and sellers nationwide. For buyers who are daunted by this incredibly escalated market, many wonder if they should “wait it out” or worry they will end up “upside down” if they buy high and then the market crashes later. For sellers, they pose the question wondering if pulling the trigger now on selling is needed, before the market “crashes.”
So what does “survey say” on the crashing of the market hypothesis? They say “Not likely” and this gal believes it to be so. There simply are too many factors at play that are different than when the market crashed before AND factors that show NO signs of lessening their influence. Home prices will continue to appreciate and here’s why. What is playing out right now in markets nationwide comes down to supply and demand. In a nutshell, ( or a Rhody clamshell) we have a demand that is SKY high for housing and an inventory that is extremely depleted. As I learned in Econ 101 at Brown, low supply and high demand escalates prices. It’s that simple. And when the need is multilayered and being fortified by a constant element that shows no sign of waning? Well that supports the upward trajectory of appreciation which looks to stay very much on course.
So what are the factors at play that thwart the notion that the market will “crash?” Let’s drill down on it…..
- The strong demand for housing looks sustainable. Even before the pandemic, demographic shifts and historically low mortgage rates had pushed demand to high levels. Dare I mention the 3 million unit shortfall we had in the US in terms of housing units as we entered 2020 and the multitude of factors impeding new construction? To compound the impact of the lack of housing issue is the fact that consumer surveys have recently shown that household buying intentions are the highest they have been in 20 years.
- Millennials, who are the biggest demographic cohort in history, are entering their 3rd decade which is the PEAK household- formation and home-buying stage of life. They want and need homes; larger homes that support families and yards for the dog that so many adopted during Covid. They need to leave the apartment they’ve rented or that first starter home and buy a larger home. This incredible demographic tailwind “fueled ” by the Millennial migration to homes in the burbs is placing a HUGE demand on housing supply nationwide.
- Tight mortgage lending standards are in place which bode well for home prices. Buyers are put through more rigorous standards and regulations now, vs the precursors of the crashes before and thus are well fortified and “fit” to successfully finance their home purchase.
So while the predicted uptick in interest rates could slow the level of appreciation the upward trajectory remains very much on course. If you have questions about the market or how you can successfully play a role IN it, please do reach on out. I am here to help!
From the best spots for sunsets to the best “digs” for donuts in the Ocean State!
Rhode Island sunsets are ones to savor. I make it an almost weekly activity to seek them out to capture and internalize. We are replete with countless great spots to capture them here in Rhode Island. My favorite areas are a few hidden spots in Barrington; one of which is featured in my preview image, and the more public spots like the Barrington beach! The late winter, early spring sunsets at Barrington Beach are magical! Perhaps they seem so vibrant because I am so desperate for sunshine and light and warmth at that time of year!!! Truth be told, I thought Rhode Island was the sole winner in the stellar sunsets competition but this past winter, I learned of another AMAZING location to catch sunsets. Now this area is more than your “pack a snack per bridge crossing” type of distance since it is ALL the way up in Seabrook, NH but rest assured it is worth the trip!!! While spending 6 months up in Seabrook in a tiny 2 bedroom beach hut with 2 large hockey players I made it my JOB to catch every single sunset that I could. I dressed like it was Antarctica, grabbed my phone and hit the beach. Worth it every single time. In fact, I have never seen a sunset that wasn’t “worth it.” I am a huge believer in relishing and cherishing each day and sunsets to me are vivid reminders of just how magical each day we get to receive, truly is. Eager to get the inside scoop on some of the best locales in RI to catch the sunset? Check out this great article in the Providence Journal for the details.
Now along with the sunsets we also are in “Boss Mode” with all things food-related. Whether it’s Federal Hill for Italian or the new food emporium “sprouting” on Sims Ave near India Point for all things fresh and local, PVD and RI as a whole have a plethora of amazing dining experiences to take advantage of. Whether it’s seafood in Bristol, Narragansett or Galilea or steaks Downtown, or plant-based delicacies at Plant City PVD or Rhody Roots in Warren, there is something to satiate every palate here in Little Rhody. Have a hankering for breakfast treats? Try the crepes at Cafe Water St in Warren, like my family did this morning or head to Bagels Etc in Barrington or PVD Bagel for incredible bagels and morel! Are donuts calling your name? Well then head to the following link to get your fill! https://www.providencejournal.com/story/entertainment/dining/2021/06/12/5-delish-donut-shops-range-old-school-gourmet-ri/7626146002/
Stay well friends and keep shopping, dining, and supporting local and make time for those sunsets!!!F
“Baby, Light My Way”……
Exciting news about a plan to light up the rusty Crook Point Bascule Bridge that’s been frozen in time in an upright position for decades. It’s an image that is emblazoned in many a native Rhode Islander’s mind and heart with many wishing it would come down and others, like myself regarding it with fondness due to its quirkiness and its nod to the olden days and the warmth that feeling of familiarity creates. To me it’s “up there” with the Big Blue Bug on 95 and the pineapple that welcomes you to Federal Hill; a trifecta of symbols that scream “pure Little Rhody.”
To come up with a plan to do something with this iconic image, an 11 member jury reviewed entries in a contest held to elicit a design plan. The one that “outshone” the others, not only will light up the bridge but more importantly the areas and communities around it. Plans are in the works for parks on both sides of the bridges, an enclosure at the mouth of the East Side Rail Tunnel and a canal crossed by mini bridges on the east bank. After just learning yesterday about plans in the works for an incredible new restaurant called Honeybird to open near the Henderson Bridge nearby, I see great things happening in this area which spans from the East Side over to East Providence.
To those with the desire and the fire to “think outside the box” and proactively come up with a vision for a RI element that has remained stagnant for years??? This native Rhode Islander leans on Bono in saying “Baby, Light my Way…….the Rhody Way!”
