Real Estate experts describe market woes: ‘It’s crazy’
PROVIDENCE, RI (WLNE) –
Hopeful homeowners Dan Chase and his girlfriend thought they were fully prepared to buy their first house in a place he’d spent his whole life. Yet when they got to the market, what they found was one in which they couldn’t compete. “It was quite a ride. It was not what I expected at all,” recalls Chase. “It became very evident to me very quickly that I’m not going to be able to buy a house here.”
Their experience isn’t unique. Chris Whitten, Broker/Owner of Premeer Real Estate, describes the market as “crazy”. “It’s a tough market. Rents are high, and home prices are just as high and getting close to rent prices.”
This time last year, Whitten reported a 20% decrease in single family homes while the availability of townhouses and condominiums dropped by 38%. Today, those numbers are almost equal – and a lack of affordable housing isn’t the only problem. Today’s generation of first-time homebuyers are also facing barriers their own parents’ generation never saw.
“There’s more credit card debt, there’s student loan debt..so that’s making it challenging not only to get pre-qualified to buy a home as a first time homebuyer, but also to get that down payment you need,” explains Whitten.
In order to save up and make sure credit is where it needs to be, Whitten says buyers are more often opting to stay living at home longer instead of paying what can be up to 50% of their income on rent. “They were renting and they said, ‘You know what, let’s go back with Mom and Pop’.”
Even with a pre-approval in hand, Chase and his girlfriend eventually gave up on the idea of house hunting in the place he once called home after finding a fiercely competitive market in a fight he wasn’t prepared for. “I think I got all my ducks in a row and we’re finally ready to buy a house and then it’s like hold on, wait a minute, we’ve got about fifty other offers and a lot of those you can’t even compete with.”
Out-of-state buyers from places like New York and Massachusetts hoping to find better deals in the Ocean State are part of what Whitten says is causing the strain on a market with an already limited supply, driving up prices where sellers know the market is scarce. “It’s two-fold because you have the lack of inventory, but then you also have the price.”
Whitten says he’s seen many couples in Chase’s position lucky enough to have their offer considered take drastic measures to stand out from the rest. “Some buyers, sadly, in this market are waiving home inspections and my heart jumps every time I mention that. Especially with a first-time homebuyer, but in some instances if you don’t waive the inspection it’s a detriment.”
After hanging on to hope as long as they could, Chase and his girlfriend opted to move as far as Iowa for a better chance at reaching their goal.
“We tried a lot of different towns, and everywhere we just..it was just too much,” says Chase. “It was too much money or it was too far away, and it was really disheartening. It wasn’t until I moved to Des Moines that I realized oh wow, this is actually attainable in some places.”
For those determined to stay in the Ocean State – or really anywhere in New England – Whitten says his best advice is to start now. “Please don’t wait. Because everybody thinks the bubble is coming, the crash is coming, my Facebook feed is lit up with that-like, ‘I can’t wait to buy a home when the market crashes’. You could be waiting a long time.”