House hunters diving into the spring real estate market may encounter something unseen since the giddy days of the subprime bubble: a bidding war.
Fueled by pent-up demand and a suddenly tight supply of houses, what has been an unqualified buyer’s market for the past four years is tilting, at least in some circumstances, back toward the seller.
And it’s not just in Boston and New York.
Even Rhode Island and southeastern Massachusetts real estate agents are touting a surge in multiple-offer scenarios despite inhospitable weather for the first three months of 2013.
“I have lost out on three multiple-bid situations with my clients and am now working with them knocking on doors to see if people want to sell their houses, because we can’t find anything on the market,” said Arthur Chapman, broker with William Raveis Rhode Island in Newport. “I did an open house that was on the market in the low $300,000s and we had 25 parties through the door. I haven’t seen that number of people at an open house in years.”
Considering how far the real estate market fell after the crash, and then double dipped in 2010, any hint of a turnaround is welcome relief for homeowners trapped under large mortgages.
Across the country, home prices have climbed steeply in recent months – the Case-Schiller 20-city composite index rose 8.9 percent in January – pulling many who owed more than their houses were worth above water, while raising concerns about a new real estate bubble.
Of course, Rhode Island and the Providence metropolitan area have been one of the last places to feel the rebound – the state ended 16 months of year-over-year price declines in October (as measured by Multiple Listing Service) and Providence-Fall River-New Bedford median prices in January only increased 0.6 percent, according to Corelogic.
But there’s a growing consensus that even this market is headed in the right direction.
The Rhode Island Association of Realtors last month reported Ocean State single-family sales rose year over year for the 20th consecutive month in February and the median price climbed 11 percent. (February 2012 had the lowest Rhode Island median single-family sale price, $170,000, since the recession.)
What’s puzzling about the local recovery is that the increase in demand hasn’t prompted more homeowners to test the waters and put their homes on the market.