Across the country, the COVID-19 pandemic has significantly impacted the residential real estate market, and Rhode Island’s real estate market shifted with it.
According to State-Wide Listing Service, end-of-the-year data for single-family homes indicates Rhode Island’s medium price for single-family homes increased 12.25 percent. In 2019, Rhode Island’s average cost for a single-family was $285,000. The medium cost for a single-family home in 2020 increased to $319,000.
Bristol’s median price for single-family homes was $335,000 in 2019 and grew to $380,000 in 2020. At first, sellers were hesitant to put their houses on the market or allow potential buyers in their homes during a pandemic, resulting in many sellers pulling their listings off the market.
As the demand for listings has increased and with limited inventory, buyers are struggling to find a home. Ryan Fonseca, a realtor at Century 21 Topsail, said, “Because of the low inventory, we’re seeing bidding wars and buyers paying $10,000, $30,000, upwards of $50,000 over asking price.” With high demand and limited inventory, today’s market is extremely competitive.
“We feel for our buyers, but we’re trying to guide them to make an educated and smart decision. Many get frustrated on missing out on their possible dream home,” Mr. Fonseca said.
Today’s demand is being fueled by a lot of local buyers, but also by a surge in out-of-state buyers. Deborah Cordeiro, owner and Realtor at Harborside Reality, said “A multitude of factors are at play; a huge factor is people are no longer tied to a specific region.” The pandemic changed the appeal of large cities, and out-of-state buyers who discovered they can work remotely are relocating to local coastal communities.
Though the prices might seem high by local standards, the East Bay’s coastal homes are considered bargains to wealthy out-of-state buyers, many of whom are willing to pay over the asking price. The rise in demand continues as people spend more time in their homes, and many buyers are looking for extra space and home offices.
These are unprecedented times for real estate. In today’s market, sellers will have no trouble finding a potential buyer, but buyers will be competing with everyone else in the market. Ms. Cordeiro said, “If sellers have a multi-family and they no longer want to be a landlord, or have a second home that doesn’t affect their living situation, that’s when it’s a perfect time to sell.” The combination of factors, including low-interest rates, working remotely, need for more space, and out-of-state buyers, have created what Ms. Cordeiro refers to as “a perfect storm.”