The New Normal
Everyone is doing it. Reassessing the post-pandemic marketplace. Establishing new business practices. Settling into the new normal. After two months of lockdown, it’s reassuring, even surprising, to see that the sky has NOT fallen. In fact, so far, coastal RI’s real estate market is quite strong. Multiple offers are common, closings are ahead of last year, and prices are climbing.
“Frankly, it’s not what we expected, but we are busier than ever,” explains Hogan Associates Realtor, Caroline Richards, “That said, we are still in wait and see mode. We use technology more, do virtual showings, and we’re getting creative. It’s business as usual but in a whole new way.”
It’s working. In April Hogan Associates’ transactions increased more than $3.6 million, a 37% increase over last April. The agency’s average sale price increased 14% in the same time frame. While some of those April 2020 sales went under contract before the COVID-19 threat, the activity suggests buyers, sellers, agents and lenders are taking the necessary precautions and getting things done.
Keeping Your Distance
Realtor Gordon King admits it’s easier to show second homes which are often vacant. “Even when the home is occupied, everyone adapts,” King says. “Clients show up with masks, inspectors and bankers work weekends, everyone is firing on all cylinders while playing by the rules.”
Newer technologies like Matterport 3D tours simulate in-person walk-throughs without the need to set foot inside. “Buying sight-unseen is easier than ever now, which is especially helpful for military buyers,” says Realtor Tammy Bass.
“I’ve been working most recently with military buyers in Japan, Germany and Washington State, who have all purchased virtually via FaceTime tours. We conducted our inspections in a similar fashion,” explains Bass. “My military clients are all adaptable, and are used to being flexible, given their experience and way of life with the military. With inventory so low, and continual multiple offer situations, we have gone through the process sometimes two or three times. My clients are ready to go the second the virtual tour ends, if not before with an offer at the ready.”
With regard to navigating the current market, Bass advises, “Due to limited inventory, buyers are having to adjust their needs and wants, and work with the homes that are available now.”
“Real estate is a human business, so we do miss the human interaction. But virtual options are now mainstream and the quality is good enough to give buyers an accurate feel for a home,” says Broker co-owner Leslie Hogan.
To Rent or To Buy?
“The bidding wars will generate an upswing in listings later this year,” predicts Hogan Associates Broker/Co-owner Matt Hadfield, “especially as owners realize they can get a good price in a down economy.” He adds current low interest rates mean buying can be cheaper than renting, advising clients to get mortgage approval before deciding which way to go. “At certain price points, the market would have to decline dramatically to justify two years of rent payments.”
That said, the rental market remains hot. Bass still gets a dozen rental inquiries each week from out-of-state clients who want to escape for the summer. Fleeing cities for Newport County’s alluring seaside charm, they can have it all and work remotely.
Betting on Recovery
As we start to redefine life and business, we recognize things that are solid versus those that come and go. Real estate is a bedrock we rely on for its strength, versatility, and reliability amid chaos. “I have investor clients who successfully navigated the recent stock market gyrations, and they are buying real estate because they believe it’s more secure than stocks right now,” says Richards.
It’s clear buyers and sellers are betting on recovery for Rhode Island’s real estate market – an industry that contributes $4.7 billion to the state’s economy.* Though some anticipate a decline due to the pandemic, many remain confident in the value of coastal communities. Now more than ever people crave the lifestyle advantages seaside destinations provide. While the future is still uncertain, the current consensus is, so far, so good.
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*Source: National Association of Realtors