As many buyers found out this past year, Providence has quickly become one of the most desirable destinations in the country. Despite a noticeable lack in inventory in 2021, the city still managed to record its highest sales total in over 15 years. This combination of low supply and increased demand sent the average sales price for a single-family home shooting up nearly 20% year-over-year, reaching a new all-time high of over $440,000.
Heading into 2022, Rhode Island’s capital city is projected to continue gaining prominence in the nationwide housing market. A recent Realtor.com article highlighted Providence as #6 on a list of the top rising housing markets for 2022, noting anticipated sales growth at 8.1%.
So what are some of the factors driving this mass migration?
The pandemic
By March of 2022, Americans will have completed a second year of work impacted by Covid, which has had unusual effects on homelife and work routines.
“Home has become even more important to everyone,” RPL Sales Associate Gerri Schiffman said. “Young professionals, with and without families, are relocating from major cities like Boston and New York because Providence is so affordable, and now they can work remotely. I have also seen a lot of grandparents wanting to relocate to Providence to be near their children and grandchildren. Plus the convenient location of the Providence area provides easy access to other interesting cities and to terrific year-round recreation options throughout the Northeast.”
Just like everything else, the pandemic has presented unique business challenges within real estate as well.
“We, as an industry, adapted pretty well,” RPL Sales Associate Jim DeRentis noted. “Fortunately, real estate has always been deemed an essential business in RI, so we have been able to show houses. We continue to follow best practices and advice from our medical community to protect our clients and ourselves. Residential Properties agents are avid technology users, which helps fill in the gaps, but folks still want to physically see a property before deciding to make an offer.”
Many remote workers eyeing a big-city salary with an affordable lifestyle in a smaller area have contributed to the recent boom. Realtor.com predicts the trend will continue this year, as flexible workers who aim to get bang for their buck will expand their home searches.
“This has largely been a phenomenon among millennials,” DeRentis added. “They hit their homebuying stride just as the pandemic took hold. They were the primary drivers for both the first-time and move-up housing markets. As more and more companies adopted remote work strategies, folks began seeking destinations that suited their lifestyles, as opposed to their commutes. Smaller, less congested metro areas like Providence became the destinations of choice for many of these homebuyers. As a result, we've seen double-digit price increases as demand exceeded the supply of homes for sale. On the East Side, we generally have 15-17% of the buyers moving in from other regions, but 2021 was more in the 30% range.”
The must-haves
Realtor.com cited large homes on the East Side as the most in demand, but with new construction, desirable condos can be found in Providence for less than $300,000, making them another popular option. The must-haves of today’s buyer have changed concurrently with the needs of our new world.
"Two key attributes of properties have been in demand this year,” RPL Sales Associate Kira Greene of the Greene | Sweeney Team said. “First, properties that can fulfill any and all aspects of life, from remote working to hosting traveling family, and second, properties that provide a lifestyle beyond the floor plan, such as walkability and a sense of community."
"We love staying in touch with our clients after the sale, and the #1 feedback we get from buyer clients is how much they love living in Providence,” RPL Sales Associate Michael J. Sweeney of the Greene | Sweeney Team said. “They feel they have been welcomed into the community and value the connectivity and engagement that comes more easily in a small city."
After more than a year spent largely at home, people are looking for newness and change. Homebuyers are often seeking versatile floor plans, higher quality finishes, and sought-after neighborhoods. A home whose functionality and style are on point is also highly desirable.
“Any house that is perceived as move-in ready is very much in demand!” Schiffman said. “New kitchens, new bathrooms, separate space for home offices, central air, and yards are among the top must-haves for today’s buyers.”
“Gone is the wide-open floor plan” DeRentis added. “Folks don't want closed-up, small rooms necessarily, but designated spaces or zones are in demand. Workspaces and home offices for multiple family members are usually in the top three of client needs. Fully renovated kitchens with room to socialize, primary bedroom suites with luxury baths, and home offices are the most commonly mentioned must-haves.”
The way forward
In such a competitive market, both buyers and sellers need to be prepared. Our real estate experts agree that the proactive, engaged client in today’s market will most likely be the successful one.
When asked what advice he would give to anyone thinking of buying or selling, Sweeney said "Work with an experienced Realtor® who communicates with you quickly and values both your real estate and personal goals and needs – do not be afraid to communicate with them!” He added, “Real estate is not one size fits all, and you as a buyer or seller should be a crucial part of your Realtor®'s strategy. This is not a market for a backseat driver."
“Many clients are unaware of the importance of finding equity,” Greene said. “With sale prices high, buyers are a bit overwhelmed. A way to address this aspect of real estate is to find a home that can be improved. Whether it’s a simple upgrade, such as painting, or a more involved improvement, like adding a second full bath, this is how to unlock future equity and create value, even in a seller's market."
With a hot Providence market still in the forecast, RPL agents are quick to reiterate the need for potential sellers and buyers to take swift, yet thoughtful action under the counsel of a real estate expert.
“Sellers will always benefit from guidance about how to best present their home on the market, but also on picking the right buyer and the best offer for their property,” Schiffman noted. “Many deals fell apart this past year because buyers pushed themselves too high, became uncomfortable with their choice, and then backed out. Buyers need savvy agents to help them through today’s challenging buying process and to make the best possible offers they can. If a buyer really wants the property, the best approach is to eliminate contingencies. That is the kind of offer every seller is looking for. My advice to any potential buyer or seller would be to pick a skilled Realtor® to work with and get started as soon as possible.”
Source: https://www.realtor.com/news/trends/competition-fierce-for-2022-top-10-housing-markets/
