Longtime Rhode Island homebuyers who have seen prices skyrocket in recent years may never see the market return to its pre-pandemic state.
The pace of housing development is too slow to make up for the abnormally low housing supply.
But Oceania has managed to offer significant discounts to those who are increasingly undervalued from real estate in Greater Boston, which has many of the same lifestyle attributes as New England’s largest city.
“We started seeing clients considering Providence because there was always this great communication between the two cities,” said Ricardo Rodriguez, a Boston-based recently. said Ricardo Rodriguez, a real estate agent at Caldwell Banker, which has expanded its office. Ricardo Rodriguez & Associates Team to Providence. “The more I went, the more I realized that there were so many similarities between them that they were really like sister cities.”
A “space hub” and a “Renaissance city” have a lot in common.
Looking for an Ivy League college? Boston has Harvard. Providence has Brown.
What about Italian enclaves? Boston’s North End and Providence’s Federal Hill are a pasta lover’s dream.
Both are on Amtrak’s Northeast Corridor, providing easy connections to other major cities on the East Coast.
There’s even a sibling rivalry between Rhode Island and Massachusetts: Richard Branson’s healthcare venture, Virgin Pulse Leaving Framingham for Providence Not to be outdone, Massachusetts leaders the following year Poached the Pawtucket Red Soxbrings the Red Sox Triple-A Minor League Affiliate to Worcester.
Low price, high buyer interest
This similarity is a selling point for buyers looking for a Boston vibe at a fraction of the cost. In the second quarter of 2022, the median single-family home price in 39 Rhode Island municipalities was $422,000. According to the Rhode Island Real Estate AssociationThis reflects a 14.4% year-over-year increase, but costs are still lower than what buyers found in Greater Boston.
“Last quarter saw an increase from out-of-state buyers, most of them from Massachusetts,” said Agueda Del Borgo, president. Rhode Island Real Estate Association“Some people can’t afford the Boston area, so they’re looking for alternatives. Because I work for a company. It makes more sense to people, both selling and renting.”
Heading north, the median single-family home price across 64 towns and the city as a whole within Greater Boston was $826,000 in the first half of the year. According to the Greater Boston Real Estate AssociationThe disparity widens even further when condo sales are taken into account.
“When you look at the data for single-family homes and condos, it consolidates all price points,” says Rodriguez. “In Boston, the average price in the city right now is just over $1 million for him. you are looking at about $400,000, so there is a big price difference. “
Buyers’ interests have expanded the boundaries of Providence’s most desirable neighborhoods. Brown’s hometown of Downtown and the East Side have been two of the hottest neighborhoods in the region for years, but developer interest has focused on the West End south of Federal Hill and the historic manufacturing hub. It has attracted attention to other areas such as the thriving jewelery district. Roger Dukemanaging associate of Rodriguez’s Rhode Island team.
Beyond Providence, leisure-oriented destinations such as Newport and Watch Hill are also attractive to buyers.
supply and demand
But just because prices have fallen doesn’t mean Rhode Island’s housing supply is healthy. Finding a list available here is equally difficult.
At some point earlier this year, inventories were down to 0.84 months of supply. (According to the National Association of Realtors, this number reflects the time it takes for the current inventory of homes on the market at the current rate of sales to sell.) What is a healthy balance of supply and demand? What will it look like? Six months in, the Rhode Island Real Estate Association said in a news release: The state had 1.8 months of supplyBy comparison, Massachusetts single-family home supply was one month, and 1.6 months. June Condo Listing SupplyAccording to the Greater Boston Real Estate Association.
Not only are prospective home buyers in Rhode Island facing a shortage of homes for sale, they are also grappling with rising long-term mortgage rates. The average long-term mortgage interest rate was 5.22% on August 11th. reported by BloombergIf there’s a silver lining to rising borrowing costs, it’s helping to cool the buying frenzy.
“We are still well below what is considered normal. [for the number of sales]but when it comes to supply, the tide is kind of shifting in the right direction,” Del Borgo said. June sales were 949, down 17.6% year-on-year, according to the state association. .
However, prices are still rising.
The median sales price of $350,000 for the 2,334 single-family homes sold in Providence County through the end of June this year is well above the $275,000 for the entirety of 2020, according to sales data from Warren Group. The average condo sales price of $265,000 is also $51,000 higher.
The median sales price for the 393 single-family homes sold in Newport County in the first half of this year was $590,000, up from $465,000 for the entirety of 2020. The median condo sales price ($525,000) increased by $110,000.
Construction outlook bleak
Like what we often hear in Massachusetts, people in Rhode Island are saying the skyrocketing prices are due to a lack of housing under construction.
“The plan currently in place is to build as few buildings as possible at the least possible density at the state, municipal and city level. [and] We will make it as expensive as possible,” said CEO John Marcantonio. Rhode Island Builders Association“That’s the reality. That’s where we are and that’s what it’s built for.”
Rhode Island’s pace of new residential real estate construction ranked last in the country last year. A study of boutique home plans of state building permit data from the US Census Bureau. Massachusetts was 40th.
“It takes an exponential leap to increase construction to where we need it,” Marcantonio said.
Cameron Spencer’s contact information is: [email protected]Subscribe to Globe’s free real estate newsletter – a weekly digest of buying, selling and designing. pages.email.bostonlobe.com/AddressSignUpFollow us on Twitter @grove homes Boston.com on Facebook.