Five Questions With: Leann D’Ettore

LEANN D’ETTORE is the president of the Rhode Island Association of Realtors. / PNB FILE PHOTO/MICHAEL SALERNO

Leann D’Ettore, the president of the Rhode Island Association of Realtors, responded this week to the news that Rhode Island’s median home price reached $349,000 in April. The price represents an all-time high in Rhode Island and is 18% above the level seen in April 2020.

Most of Rhode Island is now firmly in seller’s territory, with the supply of homes available for sale well below the six months of supply that defines a neutral market.

PBN: Many people may have been startled by the new median price for single-family houses in April. Did you see this coming?

D’ETTORE: Yes, we saw this coming because usually an extremely low inventory and high demand leads to high prices. Our current 1.2-month supply of homes for sale is a record low in demand, which was already growing pre-COVID. … When demand outweighs supply, prices go up.

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PBN: Depletion of supply is contributing to this rise in price, but what does this mean for agents who are trying to move people within Rhode Island, i.e., people going into larger houses but remaining in state? Are most waiting to list or are they requiring a sale to go through only if they can buy their next home?

D’ETTORE: Many who want to sell are listing without finding their house first. This allows the opportunity for less uncertainty about exactly what finances they will have available for their next purchase. Many homes are going over asking, so it’s not always easy to anticipate where the final number will end up.

When homeowners want to list their homes to enjoy the rewards of this strong seller’s market, they do have some options. For example, they could rent while looking for their next home or they could access some sort of bridge financing. They can also use a “subject to the seller finding suitable housing” clause when selling their home. Any of these can be useful when the homebuying process is extremely competitive like it is now.

PBN: What do you think will have to happen before Rhode Island achieves more of a balanced market? More supply? More construction?

D’ETTORE: More supply is definitely the best solution right now. In order to reach a balanced market, we will need to be around a six-month supply of inventory, but we are just over a 1-month of inventory currently.

Building more new homes is a great solution, but unfortunately building materials and lumber costs are high right now and that could be halting a lot of new construction. In 2020, not only did the pandemic diminish the supply of building materials available, but many homeowners started at-home projects since there was more time spent at home. Consequently, material costs are high.

Reevaluating building and zoning requirements to allow for land to be developed more easily and faster would also help eliminate barriers to new construction.

PBN: What do you say to your homebuyers now? What can they do to improve their chances of finding a home?

D’ETTORE: It is very important that prospective buyers work with a Realtor. The active buyer’s agents out there are accustomed to this market and know creative offer methods that increase the likelihood of success. They also add a great deal of value since they can arrange to have new listings emailed to their buyers immediately when the new listing hits the market. Realtors also know about “coming soon” listings and can make their buyers aware of these listings prior to them hitting the market.

PBN: For sellers, this seems to be a great time to sell. Are the prices encouraging people to downsize earlier than they normally would?

D’ETTORE: Yes, this really is an ideal time to sell and many homeowners are seeing the opportunity and taking advantage of it. It’s not just those who are downsizing who are making the move earlier than planned, it’s those who are upsizing too. The higher-end market is facing just as much demand, but someone looking for a more expensive home may have a little bit of an easier time against competition since there’s a larger buyer pool for the lower-priced houses.

In a market that is super rewarding for sellers, many of the sellers that are listing now are the ones that had a three-to-five-year plan to upsize or downsize but are making the change now since the seller advantages are very evident.

Mary MacDonald is a staff writer for the PBN. Contact her at MacDonald@PBN.com.

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