Buying and closing a house: this is how much it really costs
The process of buying a home isn’t complete once your offer is accepted and you get a mortgage. Here’s how much you actually have to pay to close.
Rhode Islanders who are waiting for the real estate market to return to what it was in 2019 can wait forever.
Two years after the start of the COVID pandemic, high house prices and intense competition for the few properties on the market have become normal.
Last month, the median price for single-family homes was $ 375,000, a 16% increase from the same point in 2020, the year the market took off, fueled by buyers from outside the US. Condition and an insatiable appetite for more living space.
Following: Could building houses in a school parking lot alleviate the housing crisis in Providence?
The roughly 1,300 single-family properties on the market last month were more than 300 fewer than in November 2020 and less than half of the 2,984 homes on the market in 2019, according to statistics from the Rhode Island Association of Realtors.
The collective housing and condominium markets recorded similar figures.
The number of multi-family properties listed last month was a third lower than in November 2020, as prices rose 17% from the previous year.
And there were 38% fewer condos on the market last month than a year ago, as prices rose 17%.
Will the housing stock increase in spring in IR?
So what should people expect in 2022?
“We believe that with the Federal Reserve having signaled possible interest rate hikes, the winter will remain strong with buyers trying to get the lowest rate,” said Agueda Del Borgo, brokerage in Providence and chairman of the Rhode Island Association of Realtors. “So it’s possible that prices will continue to appreciate, but not at their previous pace.”
Perhaps the bigger question is whether these high prices will convince more people to put their homes on the market.
Following: How many houses will $ 400.00 buy at RI? Looking at the houses of East Providence in Westerly
Del Borgo said she expects a typical increase in inventory this spring, but has no reason to believe there would be anything approaching a pre-COVID listing number anytime soon.
“It’s hard to say with COVID, but I think we’ll continue to see an increase in inventory and conditions improve somewhat,” she said.
A vicious circle can deter sellers
While in theory higher prices should get more people to sell, seeing so few homes to buy may make some reluctant to take a step, triggering a feedback loop.
And until the price appreciation slows down, potential sellers might want to see if they can get even more for their current home if they wait a bit longer.
Del Borgo said she is seeing some buyers getting creative in trying to take advantage of the high prices by considering temporarily renting out, looking for condos, or buying a multi-family property where they can live in one unit. But there isn’t much to choose from in these markets either.
Following: Rhode Island has not used more than $ 1 billion on affordable housing, state senator says
While the amount of money coming from Boston and New York City isn’t as dramatic as it was in the spring of 2020, it hasn’t gone away.
Almost a quarter of all single-family transactions in Rhode Island – and more than half of sales over $ 1 million – involved an out-of-state buyer last month, according to the association of agents real estate.
Rhode Island remains a good deal compared to Connecticut and Massachusetts
As expensive as housing has become, Rhode Island still looks like a bargain next to the rest of the Acela Corridor.
The average sale of single-detached homes in Connecticut and Massachusetts now exceeds $ 530,000.
House of the week: The Portsmouth house allows for residential and commercial uses
The shift to remote working has been a major contributor to the rise in property prices from 2020, which has allowed some people to live further away from their employer and increased their desire for more living space and working from home.
Although much of the economy has reopened since 2020 and city centers have come back to life, remote office work and its impacts on real estate show little sign of abating.
“The pandemic has had a permanent impact on the way we live and work,” said Del Borgo. “Some employers will require in-person services, but in some cases it turns into a hybrid model, where people who work in Boston take the train in one day instead of five.”
Can policy changes at the state level increase housing stock?
The shortage of available housing has prompted several heads of state to consider policy changes that could increase the supply of housing, for example allowing people to build mini-houses or secondary suites on single-family lots.
Barring big changes, the current successful market is expected to continue.
âI think it’s important that people don’t lose sight of the big picture and do nothing rash,â said Del Borgo when asked what advice she was giving to buyers. “I don’t advise clients to give up on the unexpected. Patience is a virtue. But sometimes you have to adapt.”
On Twitter: @PatrickAnderso_