As we start to see some economic shifts taking place in the United States, we’re going to see the national real estate market shift in turn. Rhode Island, though not often on the forefront of national real estate discussions, maintains a highly active real estate market; the Providence, Rhode Island metro area is expected to see a nearly 10% increase in median home value, similar to the projected growth in Salt Lake City, Utah. As of this June, Rhode Island’s median home value hovers at $385,000, and properties are spending less and less time on the market — an average of 27 days, according to The Providence Journal.
In a market climate like this, in which we’re all too used to seeing prices rise and rise with seemingly no ceiling, there can be tension, uncertainty, and anxiety. In times like this, home hunters may feel apprehension and a reinvigorated patience when they consider the looming possibility of an advantageous market cooldown, and owners may likewise feel a slight panic; how good could it get, anyway, and when is the right time to exit?
“Economics is complicated, but no market is an impenetrable black box, and real estate is no different,” says Pete Evering, of property management firm Utopia Management. “We have a pretty decent understanding of real estate markets now, so while you’re always dealing with a bit of a gamble, there is at least a framework to work with. So if you want to compare Rhode Island to what we see in California, or in Nevada, or anywhere, really, you’re dealing with the same kind of market cycle. Right now, we’re a little over halfway through the market cycle begun after the 2008 recession, knee deep in a bull market of increasing prices.”
So what does that mean to the average home buyer or homeowner? “Generally, these market cycles last 18 years on average, and have four parts: recovery, expansion, oversupply, and recession.” While we’re currently in the middle of a period of expansion, we’ll likely see some contained, localized cooldowns, such as the typical winter real estate lull. “That’s a bit more potent in the northeast than the southwest,” jokes Evering. “In Rhode Island, I won’t be surprised to see serious cooldown as we get deeper into winter, with the market springing right back in march.”
Unlike west coast states, Rhode Island’s real estate inventory is rather limited. However, buyers should remain optimistic; the number of available homes in the state is generally increasing. While still short of the stability that would have it classified as a balanced market, Rhode Island’s housing supply is healthier than usual going into 2022.
“My advice to buyers is this: be true to your price range. That doesn’t just mean don’t go over-budget. It means don’t hold out for something drastically under budget either, in the hope that the market will suddenly shift in your favor.” If you’re seeking a home in Rhode Island, and you see something good, it’s best to make your move; in a state like this, those great opportunities can be few and far between.