Are You Ready for Rhode Island’s 2021 Real Estate Market?
2020 will stand out as a record year for many reasons, especially for Rhode Island’s real estate market. Sale volume has hit record highs this year, along with median home prices. Rhode Island’s real estate market was an important sector for the state’s economy, accounting for 18.2% of the state’s gross product in 2019, and increased sales in 2020 are likely to account for much more. This industry helped keep the state above water during this turbulent year.
So, entering 2021, what should real estate agents in Little Rhody expect?
2021 Rhode Island Real Estate Outlook: Hot
Home sale prices and median home prices increased throughout 2020, despite a brief pause in early spring due to lockdowns. Single-family homes saw a huge increase in median home price, increasing 12.3% year-over-year. Multi-family homes and condominium sales also witnessed substantial growth in 2020, with multi-family sales increasing by 14.8% and condominium sales increasing by 6.4%. Rental prices in Rhode Island also increased 1.0% over the past year. While this change isn’t as drastic as the shifts in median price or sale price, it’s still a positive indicator that there are people interested in renting, especially after 2020’s obstacles for both renters and landlords alike.
While home sales and home prices have increased, 3.1% of Rhode Island homes have negative equity, which is ranked moderately in comparison to the rest of the nation. The number of homes with negative equity is expected to decrease as home sales and home sale prices drive the value of homes up over the next year. A bright spot for homes within the state is the equity gained in 2020: Rhode Island homes gained $29,000 in equity on average, one of the highest equity bumps in the nation.
Meanwhile, delinquency rates in Rhode Island are right on par with the national average of 0.8%. This is a great indicator that the state has been steadfast on mortgage payments and has come out of 2020 on a strong note, ready to take on 2021. There is optimism around the economy re-opening, leading to more residents returning to work and helping to decrease the current rate of delinquent mortgages.
2020 Rhode Island Real Estate Market Data
|Zillow Home Value Index||$331,458|
|1-Year Change on Home Values||+9.3%|
|1-Year Change on Rent Prices||+1.0%|
|Homes With Negative Equity||3.1%|
|Delinquent on Mortgages||0.8%|
|Buyer’s or Seller’s Market||Seller’s|
Market Insights for Rhode Island
The current active home inventory in Rhode Island is well below state records, putting pressure on real estate agents to find the best home for their clients from limited options. The low supply of homes for sale at the beginning of 2020 maintained its momentum, falling from 2.6 months of inventory in January 2020 to 1.4 months in December 2020. Typically, industry experts would like to see a six-month supply as this shows balance between the supply and demand. Right now, the lack of supply amidst high demand is creating a fierce seller’s market.
Rhode Island, like many East Coast states, is experiencing an influx of out-of-state residents from major cities, though it’s no surprise why. The Ocean State is known for its unique attitude, which welcomes all backgrounds. This is how Rhode Island pans out in comparison with the rest of the nation:
- First in natural environment
- Fifth in health care
- Thirteenth in low crime and correction
- Twentieth in economy
As buyers scramble to find their perfect property, competition within the state will likely pick up even more heading into the traditionally active months. Real estate agents should be prepared to serve their clients both in person and online. Giving your clients the option to shop around online will be a huge benefit for interested buyers both in- and out-of-state.
Take On 2021 With the Best Rhode Island Real Estate Courses From The CE Shop
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