PROVIDENCE, R.I. (WPRI) — Realtors believe this is the hottest seller’s market ever, especially in Rhode Island.
For more than a year, out of staters have been buying homes, adding to the competition for an affordable house.
Historically, the coastal communities of Newport, Washington, and Bristol counties attract the most buyers from other states, according to RI Realtors. This year, they accounted for 39.9% of total sales in Newport County, 35.5% in Washington County, and 31.5% in Bristol County.
All of this heavily impacting sales of two-family homes and apartment buildings.
“Multi-family homes right now are selling in under 30 days and a majority of them, under two weeks,” Broker Melissa Perrille, with Premier Realty Group, explained.
As quickly as multi-family homes are listed for sale, they’re brought up by investors and those who are looking to live there if they can afford it, according to Perrille.
“Two-families are very appealing to first-time homebuyers. The reason being is they’re able to benefit from additional income and they’re also able to purchase the home with no money down through certain financing programs that are available in the state of Rhode Island,” she said. “Those first-time homebuyers are being pushed out of the multi-family market because of how many investors are moving in.”
According to data from RI Realtors, the median sales price of multi-family homes saw an all-time high last month, rising to $382,500. In August of 2019, before the COVID-19 pandemic, the median cost was $275,000.
Broker Shannon Buss, with Randall Realtors, said there just simply isn’t enough inventory on the market.
“Starting February of this year, every single month since February, the multi-family market, has seen double-digit increases, year over year,” Buss explained.
The lucrative investments come at a cost to the tenants. With homeowners wanting to live in the multi-family home they purchased, the tenants need to be evicted.
Buss and Perrille say it’s also causing panic for college students who are having a harder time finding apartments, let alone ones they can afford.
Perrille said she’s seen units listed at $1,600 a month receive bids from prospective renters for $2,200 a month.
“We’ve seen 3-bedroom apartments at $2,200 a month which is insane, and I believe the average Section 8 voucher, which appeals to a lot of investors because its guaranteed income, ranges from $950-$1,250 in the state of Rhode Island,” she explained.
According to Perrille, she has seen an increase of 200% of rental calls into her office, but they have nowhere to go. Unfortunately, she said she sees this as a possible homelessness issue in the near future.
“We can’t keep up with the rental demand right now,” she explained. “There’s not enough affordable units.”
The eviction moratorium has also ended, which means owners can kick out tenants for not paying rent.
Perrille says that’s also holding up the sales of multi-family homes because evictions can take up to 90 days to complete and the sales can’t go through until those are done.