Spring has sprung in Rhode Island! And you know what else? The home market is bubbling up. Buyers are coming into the market; sellers are coming into the market, and mortgage rates are going down. What's happening with home prices? If you're new to the channel, hit that Subscribe button, give us a like or a thumbs up, and smash that bell so you get notified anytime we put out a new video.
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Let's talk about the Rhode Island spring market. One of the most common questions or comments, or remarks that I get from people who are looking to purchase homes in Rhode Island is that they're waiting for home prices to go down. Why does everyone think this? Well, it's easy to understand. If you look at the headlines that were all over the internet and television and in the news all of last fall, you can see that everyone kept saying home prices are falling, home prices are falling.(00:53)
For example, CBS news was quoting the Dallas Fed saying US housing prices could plunge 20%. Fortune Magazine had an article that they were quoting Moody's data saying that there are now 210 US markets at risk of a 15 to 20% price drop. And again, CBS news was quoting probably that same Moody article saying that US home prices could fall as much as 20%.(01:20)
Well, what does that mean for you? There's a reason we think this way. There's a concept out there, and it's called narrative circuitry, and it's the idea that we as human beings, we narrate what's happening around us instead of just observing what's happening around us. In other words, we spend 90% of our times telling ourselves what is happening instead of actually seeing what's happening.(01:46)
So let's look at what the housing market is actually doing. We know, or we think that numbers don't lie. We look at what actually happens in the market and we use data, not drama. So if you look at this chart that's up on your screen right now, you'll see that in January of 2023, here's the year over year. Now this is from January of 22 to January of 23. This is 12 months comparison. And these cities are listed in alphabetical order, and we can see that almost all of them continued to see price appreciation over the one year period. Big, big increase in Miami, went up 13.8%. Atlanta went up 8.4%. Boston went up 4.2%. Tampa went up 10.5%.(02:38)
We did see some minor decreases. We saw decreases in Portland, San Diego, San Francisco, and Seattle. So this is kind of carrying forward what we've seen all along for the last couple years that the West Coast saw 20 to 30 years of massive home price appreciation, much more than other parts of the country did, and now they're starting to see that slow down.(03:06)
Here's Rhode Island's numbers. So this data is put out in February by the Rhode Island Association of Realtors, and you can see here that the median sales price in all of Rhode Island, that's every city bundled up together, was 384,000 in February of 2023. That is an increase of 4.4% over February of 2022.(03:34)
Now, the interesting thing here, I think, is that we saw the number of sales go down. Why did we do that? Well, because we don't have enough inventory. So the number of sales is actually counting the number of transactions, and the number of transactions is driven by how many homes are on the market and how many people buy those homes. You can look down in this lower left-hand corner, and you'll see the active inventory as of March 10th, 2023. In our current market, we only have 1.2 months supply of inventory. That is a strong seller's market.
(04:12)As of March 10th, there were 880 pending sales. That was down 21.2% from January 2022. Again, what we're looking at is the total number of transactions because there wasn't as much inventory.
(04:37) Here is a chart showing Rhode Island's month-to-month changes. In December of 2022, 634 homes sold in Rhode Island. January of 2023, the total dropped to 462 homes. December homes went under contract in October or November. In January, those homes probably went under contract in November or December, and that's generally a very slow time of year anyway.
(05:13) In February of 2023 392 homes closed. That's a seasonal difference more than a drop in the home buyer's market. Think about it. When you're home hunting, you're usually looking in the spring.
(05:50) The median sale price is the interesting number here. No big drop from January to February. The median sale price in December was $389,950, and in February of 2023, it was $384,000. The number of listings was 1017 in December of 2022 and down to 864.
(06:45) From December of 2022 to February 2023, there was a decrease of 29% in the number of homes sold. We saw an increase of 2.5% in how many days on the market.
(07:21) Ultimately, what we're seeing here is no appreciable drop in home prices in Rhode Island. In fact Rhode Island saw a year over year gain of 4.4%
(07:36) What does that mean to you as a seller? Some sellers are hesitating because they have interest rates down around 3%, and might be thinking, oh, I can't get that mortgage rate again on a new property.
(08:01) And if that is your sole consideration, you're probably right. However, there are a couple other things you might want to take into account. Number one, we are probably seeing the market level out slightly. We are not seeing the double-digit appreciation in home values that we saw for the last two to three years. Your home will continue to increase in value, but if you're thinking about cashing out, this might be a good time.
(08:33) A well-maintained home in Rhode Island is not going backward in value. This could be the time to capture that equity and downsize, move closer to the kids, or find a single-level home.
(08:49) If you're worried that you won't get the same interest rate, you're probably right, but interest rates are back down in the low to mid sixes and projected to go down further. Don't let it stop you from taking advantage of the strong buyer market right now, which gives you the greater opportunity of collecting higher equity because those buyers are experiencing a lower interest rate than they would in the past.
(09:17) So if you're thinking about selling, now is a good time. Let's have a chat. I'm Sandy Warner with Warner Realty Group. Subscribe to our channel. Give us a thumbs up if this was interesting content, and hit that Bell. Warner Realty Group, making the complex simple.