RI Real Estate Market is Stalled for Home Sellers
Rhode Island offers so much in life style living for home buyers yet the Rhode Island real estate market is not feeling the growth and ‘hot’ home sale market like other parts of the country. Year over year, RI is experiencing only little more than a 1% growth in home sale values (since the housing debacle in 2008) and in some communities, sales numbers are down from last year or just a mixed bag. So I am queried constantly why our RI real estate market is not feeling the rebound that home sellers are hearing about across the country.
So Why is the RI Real Estate Market Stalled for Home Sellers?
The news media purports there is a growth in home sales and home bidding wars are plentiful in most housing markets. Remember to be wary of what happens ‘everywhere else’ that is reported.
RI real estate happenings are local but certainly impacted by national changes (fuel costs, bond markets, Federal Reserve monetary changes, etc. ). There are a number of factors that are happening in RI that are impacting most home sales. Let’s talk about them…
– Banks shadow inventory of foreclosed homes is out there
– Short sales are down in numbers
– Show ready houses in short supply
– Unemployment remains high in RI
– Wages have not increased or just minimally
– Consumer price index is rising
– Retirees are heading south
Bank shadow inventory are the homes that the banks have foreclosed on, in serious delinquency or held as REO (real estate owned) properties not on the multiple listing service for sale yet. These are ‘pending’ homes that will come to market to be sold by the banks at some point.
Recent Corelogic statistics show that there is a 6.4% delinquency rate now (quite high) on RI homes. This means homeowners are not paying their mortgage and should be doing a short sale but instead many are just lapsing into uncertainty. The worst thing these struggling home sellers can do is walk away from their homes or go into foreclosure. So we know in Rhode Island this means more foreclosures are coming to market. Less people moving, selling or home buying.
Short sales are down in numbers in RI. Yes, the homes that have been in process to be in short sale have moved along but the more difficult ones are sitting out there awaiting listing contracts from the banks. It seems that homeowners are ‘frozen’ in what to do.
Looking at the delinquency numbers, homeowners that are delinquent, not putting their homes on the market and do not see the benefits of a short sale are many. We need more struggling homeowners to get help and sell their home they can not afford. A short sale is the most advantageous way right now.
Show ready homes in short supply. Buyers want updated homes and homes in the under $300,000 price range are in high demand. However, home sellers still do not understand that unless you price your home to the market, you will not sell the house. These sellers usually end up reducing the price until it is truly fair market value. You can not be subjective about a home’s value. There is nothing but substance in comparable home sale prices that tell you the right price of a home you are going to sell. Homes updated & priced right are usually in sales agreement within a short period of time of making it to market. Home inventories are still high due to overpricing of houses by sellers.
Unemployment in RI stands at 8.2% which is down a bit from its high but the numbers mean people can not buy homes. This stalls home sales and many potential buyers are unsure of their jobs as many company’s consolidate or move functions off shore to save labor expenses. Along with that wages are not moving up much since the business owners have a good supply of work force to draw from. They do not need to raise wages much to attract qualified workers in RI. You need more contributing businesses in RI to expand and attract higher paying jobs too.
Consumer price index is rising. The more food, oil, gas prices rise the less homeowners have for other purchases. And that includes housing.
Retirees are heading south instead of buying or renovating a home in RI. They are heading to a warmer climate and more retiree tax friendly state. We need to keep retirees here to support the state’s budget so property tax increases are stabilized.
So state and local government need to make the push to help the homeowner and small businesses to grow in RI. More programs for first time home buyers are lagging and incentives are needed here. There is so much to appreciate in this state with our waterfront RI real estate, beaches, renaissance Providence, great schools, leisure activities, etc.
Let’s not forget we all play a roll in keeping this RI state vibrant. Changes that will un-stall the RI economy are needed.
RI Real Estate Market is Stalled for Home Sellers
Ginny Lacey Gorman is your go to Rhode Island waterfront agent for RI real estate and beyond…knowing the geographic area, schools, happenings and important tidbits of local information. Email her at Ginny@RiHouseHunt.com to make an appointment to discuss your real estate needs.
Waterfront, oceanfront, luxury and coastal Rhode Island real estate are my specialty but all of RI is my backyard. When you are in need of a real estate professional and specialist for your buying, selling or relocating needs and an internet savvy marketer who sells RI houses in this real estate market call Ginny at 401.529.7849 today.