In the last few years, Rhode Island’s housing market has been booming. Single-family homes have been selling quickly and for impressive market values. This growth has been a sign that the negative impacts of the housing market crash has finally ended. However, one of the issues in Rhode Island, especially in Providence and the surrounding suburbs, is the supply of housing has not met demand. After the housing market crash, new builds had slowed. So when consumer confidence returned, the supply of houses could not meet demand. Fortunately, for buyers that seems to be changing this year.
A Buyer’s Market In Rhode Island?
As a result of the housing shortage, the last few years have really been a favorable market for sellers. In July 2018, The Rhode Island Association of Realtors released a report showing for the first time in two years the housing inventory has climbed to over 4,000 units available. Simultaneously, the report also found that housing prices are starting to stabilize. A sign that there is less competition in the market for new homes. It is not quite a buyer’s market yet, but it is a more favorable climate for buyers than last year.
Growth Across All Residential Estate
Single-family homes are not the only housing with an increased inventory. The report also showed that the supply of condominiums rose by 2.6%. Multi-family homes had the biggest increase in inventory with a 25% growth. Finally, the biggest growth is seen in high-end housing inventory. Properties valued at $350,000 or more are up 5.7 nationwide. In Providence, the inventory year over year from 2017 of high-value homes is up 19%.
Why Is The Shortage Ending?
There are many factors as to why the shortage is ending. The first is that the real estate market naturally cycles between buyer and seller markets. After being a seller’s market for so long, it was time that the market started shifting. The second is that there is finally new construction of homes nationwide as a result of the high demand. Lastly, in the case of high-value homes, there is some reduction in buyer interest for higher value properties. This has both increased supply and helped stabilize prices. All of these economic factors have lead to an increase in available listings.
What Does This Mean For Providence Residents?
First of all, it means that it’s a favorable time to buy a new home. With the increased inventory, potential home buyers can find exactly what they are looking for in a new home. However, even though the market is shifting to a more favorable climate for buyers, it’s still a great time to be a seller. Houses are still being sold at great prices and closing times are still very quick. The market benefits all Providence residents.
The end of the housing shortage is great news, especially since Providence already has an affordable housing market and a stable economy. The increase in inventory means more residents can own their dream homes in a great city.