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Are homes currently overpriced in Rhode Island? Especially for the lower end of the market (< 200k)?
I am looking to enter the market but seems a little hesitate since it looks like we are in a bubble. Should I keep renting and wait for a few years?
I follow a mix of markets in the South (mostly Florida, a couple in North Carolina) and in Connecticut and Rhode Island, mainly Westerly. It sure looks like a bubble in the "acceptable" lower end. Meaning if the property is reasonably habitable and not in the 'hood, it gets "snapped up". I call it "panic buying at the lower end". There does seem to a be a bit of what's called "FOMO", Fear of Missing Out, on the part of those who are not all that affluent. During the last bubble, realtors used to say "Buy Now or Be Priced Out Forever!" People seem to be falling for it again. The real price drops and concessions are happening in the 3+ million dollar category. Good time to be a wealthy person looking for a house in places like Greenwich, CT.
This reminds me of the top of the market just before it froze up in 2006. It took until 2008 to see any major drops, though. So you've got probably three years before you can take advantage of any decent price drops, minimum.
When the upper end of the lower end meets the lower end of the upper end, that's when the freeze-up usually happens.
I can't advise you, except to quote the old saying that "markets can stay irrational longer than you can stay solvent" and there's no harm in looking. If you happen to see something you like and can comfortably afford, by all means give it some serious consideration. Also keep in mind that if there's some sort of crash or bubble burst, mortgage money has a tendency to dry up and interest rates are higher. So there's deals and lower prices everywhere, but no money to take advantage of them, or if there is, it costs a whole lot more. So you have to weigh these things.
Are homes currently overpriced in Rhode Island? Especially for the lower end of the market (< 200k)?
I am looking to enter the market but seems a little hesitate since it looks like we are in a bubble. Should I keep renting and wait for a few years?
The general RI real estate market, at the affordable end is "hot", but not quite as hot as last year. But, it's likely not a bubble. Well priced, move in ready, houses are going into agreement in 30 days or less in most towns. However, overpriced houses still sit - until price reductions bring them down to meet the market.
Each town is slightly different. The only market which may be in bubble territory is PVD's East Side where many move-in ready houses are under agreement in just days, if not hours. And, even there it's probably not a bubble at the very lower end.
Another significant factor is relatively low mortgage interest rates today. Will they still be as low in a few years? So, if the timing is right for you, and the house is right for you..... your rent could be a mortgage payment. Others may disagree.
During the last bubble, realtors used to say "Buy Now or Be Priced Out Forever!" People seem to be falling for it again.
What I can tell you is although RE can be somewhat cyclical, it goes up over time barring any major disaster or cataclysm- such as war or economic collapse.
For example 3-4 decades ago, RI house prices were roughly half to one third of what they are now in any desirable area. So, the "buy now" or forget it forever idea is not without merit.
What I can tell you is although RE can be somewhat cyclical, it goes up over time barring any major disaster or cataclysm- such as war or economic collapse.
For example 3-4 decades ago, RI house prices were roughly half to one third of what they are now in any desirable area. So, the "buy now" or forget it forever idea is not without merit.
Generally, housing prices in places where out of state money isn't buying are closely linked to household income. In most of Rhode Island, household income hasn't even tracked the core inflation rate. The coastal areas where out-of-state money is buying, the "good" parts of Providence, and the most desirable Providence suburbs where there is more demand are headed in one direction. Much of the rest of the state isn't.
Generally, housing prices in places where out of state money isn't buying are closely linked to household income. In most of Rhode Island, household income hasn't even tracked the core inflation rate. The coastal areas where out-of-state money is buying, the "good" parts of Providence, and the most desirable Providence suburbs where there is more demand are headed in one direction. Much of the rest of the state isn't.
Where are housing prices in RI declining overall? What neighborhoods?
Where are housing prices in RI declining overall? What neighborhoods?
There are no areas of the state where real estate prices are in decline. Almost everywhere is at or above 2006-07. However, some towns & neighborhoods are significantly above that last high mark. These are the towns where out-of-state seasonal buyers have entered the market RI market in a big way. The East Side is one exception. It has managed to rise bigly without these new seasonal buyers' $$$.
After a slight decrease in April, values are projected to grow more steadily into 2020 where they will then peak and start to drop again. Again I wouldn't go by that alone, but I see many other indicators around that YES RI is in a bubble. Smart time to sell, poor time to buy.
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The real price drops and concessions are happening in the 3+ million dollar category. Good time to be a wealthy person looking for a house in places like Greenwich, CT. 
