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While we can argue Rhode Island's challenges in 2018, Real Estate prices don't seem to be one of them. Considerably more buyers than sellers have lead to a single family year-over-year price increase of 8.4%. Largest increase in New England. While we may not have much in the way good job generation, our proximity to job rich Boston seems to make it a moot point - as far as the state's single family real estate is concerned.
And, this 8.4% increase is just a state-wide average. Several towns/neighborhoods in the state have done much better. It's hard to see this development as anything but a glass half full if you own a single family house in RI.
I’m not sure what your incentive is to post this. A housing bubble is nothing to brag about. This is the sort of thing you’d see on Real Estate chat forums so I’m guessing that you’re in the real estate industry.
Quote:
Originally Posted by independent man
While we can argue Rhode Island's challenges in 2018, Real Estate prices don't seem to be one of them.
Depends on who you ask. If someone had been already planning to leave the state then yeah, the timing of this market distortion couldn’t be better. Or, if you can afford to buy into the next price range which is not as affected by the current distortions (above 300k) you can do ok. A MUCH nicer house for not too much more money respectively.
This distortion exists almost exclusively in the first-time-buyer price range. Less so in homes that are 300k and up.
But for young or otherwise low income buyers, buying into a bubble is never a good thing. And that’s exactly who RI Housing is herding into this market and thus creating if not contributing to the inventory deficit. So from that perspective this IS one of Rhode Islands “challenges”.
As I stated in another thread: There are more buyers than sellers because the market has been severely distorted by Rhode Island Housing AND real estate professionals who have preferred relationships with flippers OR are flippers themselves. And I also believe that there is a certain amount of inventory throttling going on via the purchase of pocket listings (before the public see them) and the subsequent strategic timing of listing on the open market.
What’s happening in this market is eerily similar to what happened in the years leading up to the 2007 crash. There are no derivative mortgage products yet but all the other factors are in place and it’s deliberate:
- 100% financing
- Lower Credit scores accepted.
- 3.5% down sometimes 0%
- No PMI requirements
- $7500 Tax credit
- No Earnest money required.
- People buying crap houses for way more than they’re worth…
Let me repeat that one:
- People buying crap houses for way more than they’re worth…
All this at a time when wages have been stagnant for years if not decades.
Couple that with the fact that the Real Estate industry gets to collect a 6% cover charge for every entry and exit, the preferred lenders get all their fees and closing costs up front, the city gets to collect higher RE taxes and there ya go.The perfect storm for what Rhode Island is already pretty famous for: corruption.
If this “market” is so strong then why does RI housing continue to aggressively seek to recruit and “educate” unsuspecting victims who probably can’t afford these houses in the first place? Buying lipstick flips at the top of the market? Why don’t they dial back the incentives and “educational” courses and let the market find a natural equilibrium?
Encouraging marginal buyers to buy into a bubble with maximum leverage is as unethical as a financial adviser telling someone that they should mortgage their house and invest in stocks right now.
It’s not going to end well for many. But there will be money made on both ends by the market makers.
Sold for 112k in December and is now listed by the RE agent who bought it for $174,500. Zero restorations. A $62,500 (56%) markup. And a graduate of RI housing’s “buyer classes” will gladly pay this price or more. What I’m curious about is why a graduate of RI Housing’s classes didn’t get it for the 112k?
You're posting the same thing we rebutted before? RI Housing helps first time home buyers if they want the help- you seem to think it's some sort of conspiracy and people are being forced to buy houses! If you attended their lectures and feel you got poor advice and made a bad purchase, why not tell your own story?
Plus, you say you understand the "true value of real estate" but the first thing you learn in RE that a house is worth what a willing and able buyer will pay. There is no "true value".
There's insurance value, tax value, emotional value, aesthetic value, replacement value, historical value, market value, and so on. All are subjective with replacement value probably being the least subjective.
Caveat emptor, no none should buy RE if they don't understand the advantages vs the disadvantages. As in all things, you're responsible for your own education. If you seriously think there's going to be a housing bubble, then for heaven's sake, don't buy.
I will close by saying that my decades of experience in the RI market have shown blips, but over time, it's been up. Less risk than stocks, IMO, if one buys right, does their homework, avoids obvious flips, etc.
Well of course. The RI housing market tanked very badly... and it has the largest delta to fill.
That being said.. as tiny as this state is, we have very diverse real estate markets. Not only by community, but by price point as well. Not all communities and price points ae doing well. I see East Greenwich losing sales to North Kingstown in the $500K+ price point. With EG taxes vs NK - I'm not surprised. And the NK school district is improving.
But even in NK.. there are just some properties which have sat on the market far too long. Owners can only drop the price so far..unless they want to short sell.
I am seeing more investment properties up for sale statewide. Looking at the sales histories - time to unload.
I know a multitude of "realtors" who've gotten into flipping......and they are buried in those properties. Even some General Contractors are buried.
Well of course. The RI housing market tanked very badly... and it has the largest delta to fill.
That being said.. as tiny as this state is, we have very diverse real estate markets. Not only by community, but by price point as well. Not all communities and price points ae doing well. I see East Greenwich losing sales to North Kingstown in the $500K+ price point. With EG taxes vs NK - I'm not surprised. And the NK school district is improving.
But even in NK.. there are just some properties which have sat on the market far too long. Owners can only drop the price so far..unless they want to short sell.
I am seeing more investment properties up for sale statewide. Looking at the sales histories - time to unload.
I know a multitude of "realtors" who've gotten into flipping......and they are buried in those properties. Even some General Contractors are buried.
EG may not be on fire, like Jamestown, Newport or the East Side, but the real estate market there is healthy, doing fine. As far a houses sitting unsold, they do so in this market for one reason only- they are Overpriced for location and/or condition.
Amateur realtor/flippers do need to take care. I know a husband (contractor) wife (realtor) team who are indeed buried. They miscalculated on the East Side of PVD by choosing a second tier street, over improving the flip, and now needing a first tier street sales price. If they get out with their shirts, they'll be lucky.
Well of course. The RI housing market tanked very badly... and it has the largest delta to fill.
I'm not sure this applies in this case. The market tanked in 2008 and has long since recovered. The stats given were year over year, which I read as this year vs last year.
Where is this and how do I get it? I can't find anything and I bought last year....
Quote:
Originally Posted by Hollytree
You're posting the same thing we rebutted before? RI Housing helps first time home buyers if they want the help- you seem to think it's some sort of conspiracy and people are being forced to buy houses! If you attended their lectures and feel you got poor advice and made a bad purchase, why not tell your own story?
.
I took the MA version of the classes. I found them super helpful. Didn't use any of the avenues, as they aren't much help, and I had 20% to put down, but the information on the process, terminology, etc was very helpful.
Where is this and how do I get it? I can't find anything and I bought last year....
I took the MA version of the classes. I found them super helpful. Didn't use any of the avenues, as they aren't much help, and I had 20% to put down, but the information on the process, terminology, etc was very helpful.
Timberline, your experience with MA is typical of what I hear regarding RI Housing's programs. Their homebuyer education gives most first time buyers a leg up in what can seem a very complicated process.
I'm not sure this applies in this case. The market tanked in 2008 and has long since recovered. The stats given were year over year, which I read as this year vs last year.
If you have a 30% delta to fill, the greatest gains are going to be towards the end of the recovery cycle. Stable jobs, stable income, paying down debt and positive outlook.
This being said, we are not through 1st quarter of this year. In looking at closed sales... delete the multi-million dollar properties closed in 1st qtr.... the percentage drops.
Very interesting discussion here. I'm seeing a good amount of uptick in investment property prices as well. Cap rates are down, inventory is slim. I can see why one would be concerned with the "bubble bursting." I am not sure if this is a real estate bubble though - I see this as an asset bubble that has been fueled by cheap money courtesy of the Fed, and savers looking for yield across asset classes. Pardon the digression.
Returning to Real Estate, I do question how many households will end up losing their homes when the economy inevitably declines and jobs are lost?
As a long term buy and hold investor, I'm keeping an eye out for deals, however I am in no rush to close on a property. I'll be ready to scoop up deals in Newport, The East Side when the timing is right.
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