The Rhode Island market is having a banner year so far in 2018. Providence Business News is reporting that the median price of a single-family home has risen 13% from last year. The average price was $265,000 dollars, the highest value since 2007 before the housing market crash. The increased prices were also seen across all categories including multifamily homes which rose 29% to $225,000 and condominiums with prices up 3% from last year averaging $201,315.
Why Are Home Prices Increasing So Much?
There are a couple of factors leading the price increase. The first is the return of consumer confidence in the housing market after the 2008-2009 housing market crash crippled the economy. The second is that the Fed is raising interest rates for the sixth time, prompting many homebuyers to act quickly before the rates get too high. Finally, the biggest factor is after the housing market crash, new building has slowed. All of these factors have led to a short supply of homes, increasing both competition and prices on houses.
What Does The Price Increase Mean For Sellers?
March is the beginning of the prime real estate season. With housing prices on the rise, this is a sign that the rest of the season will be favorable for sellers. An increase in competition means homes aren’t just selling for more than last year, they are also moving quickly off the market. Homeowners considering selling in the near future, should consider listing now while the market is in their favor.
What Does The Price Increase Mean For Buyers?
Though the price of homes is up, the market is still favorable for buyers. The mortgage interest rates are still low enough that it’s a great time to consider buying a home. Plus, with the market stabilizing, homes are a better financial investment than in the years after the crash. Also, unlike the period prior to the housing market crash, the banking regulations have protected buyers against predatory mortgage lending practices. Buyers are more protected now than they were in 2007 when housing prices were comparable. Buyers should beware that homes are going to move more quickly. So if you see a home you love, you’ll have to act fast or you may miss out.
What To Expect In The Coming Months
With peak real estate season just beginning, buyers and sellers can expect to see a stable and thriving market in the months to come. Even though prices are up, the housing market is not yet in danger of entering a bubble. Both buyers and sellers will benefit from the current market. With Rhode Island’s overall economy also thriving, we should continue to see a booming market over the coming months and years. Ultimately, now is a great time to buy or sell your home. So if you’ve been thinking about it, talk to the Providence Real Estate Guy to learn about your options.