Where you see the most green on the map, sellers net the most greenbacks.
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The most recent market report released by the Rhode Island Association of Realtors has a ton of information, but today we’re just focusing on what they call the “heat map,” which represents how much inventory is in the state right now. Why does inventory matter so much?
Hypothetically, if the number of buyers and sellers in a market were exactly equal, and if a freeze-frame image were taken of that balanced market before any new homes entered the picture, then what you’d expect to see in that picture is approximately seven months of inventory. It’s been discovered as a sort of economic principle that five to seven months of inventory indicates a balance between supply and demand in a housing market.
If, however, you were to suddenly have less than five to seven months of inventory, you no longer have this balanced market picture—you’re now in a seller’s market. If you have more than five to seven months of inventory, you’d be looking at a buyer’s market.
At 2:23 in the video above, you can see the Rhode Island Association of Realtors’ most recent heat map; right now, as you might suspect, most of the coastal waterfront areas are in a seller’s market. Again, that means those areas have less inventory than active buyers. In the simplest economic terms, demand is outpacing supply.
For areas like Newport, Middletown, Portsmouth, Tiverton, Bristol, then Narragansett, Charleston, and straight down into Westerly (pretty much all of South County), there are two to four months of inventory. This has been an ongoing scenario in Rhode Island.
With other out-of-state buyer pools disqualified altogether, our big market has become New York.
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If you have an updated property that has either a pool, a piece of waterfront, or easy access to the water, you can pretty much ask anything you want for that property right now—especially if you have any combination of those three features. Families (typically from New York) are looking here for long-term solutions outside of the big city, and there are a couple of factors playing into that.
As of the filming of this video, Rhode Island has mandated that only those from a state with a less than 5% positivity test rate of COVID-19 can enter, meaning lots of buyers can’t come shop here at the moment. We recently had to cancel an appointment with a buyer from Florida; she could’ve bought a home here remotely, but most people don’t want to do that.
With other out-of-state buyer pools disqualified altogether, our big market has become New York. Buyers from New York want a house that’s modern, finished (no ‘flippers’ or fixer-uppers), equipped with a pool, and located in a prime neighborhood. So, if you happen to own such a property and have considered moving out of state or downsizing, you practically hold all the cards right now and can ask almost anything for it (within reason, of course).
Now, some places in the state are actually in a buyer’s market, but for sellers in our primary waterfront communities, there has quite literally never been a better time to sell. Maybe you’ve owned a couple of rental properties in Rhode Island and decided you’re no longer interested in dealing with them; now’s the time to start thinking about liquidating those assets.
If you have questions about this seller’s market, our wave of New York buyers, or real estate in general, please feel free to reach out to me or any of our agents in the office anytime. We’re here to assist you with your needs and would love to discuss your specific situation in depth. Give us a call at 401-286-7204 or send us an email.