Sean Harrington is a broker/owner of RE/MAX Integra, which has opened a Providence office to focus on clients in northern and central Rhode Island, as well as bordering towns in Massachusetts. RE/MAX recently released a 2016 Fall Trends report, which found Providence had had a 20-percent increase over last year in the number of single-family home and condo sales. Close-in suburbs of Cumberland, Cranston, Warwick and East Greenwich all experienced a decrease in days on market for sales, as well.
PBN: The 2016 Fall Trends Report indicates that Providence and its close-in suburbs had close to a 20-percent increase in single-family and condo sales. How much of this is attributed to first-time buyers or millennials? Are they driving the purchases?
HARRINGTON: I would say they are most certainly driving it. There is a lot of it there. I see the sales and I talk to my Realtors. They are definitely purchasing and starting households. It’s good.
PBN: Providence is being marketed as an affordable alternative to Boston, but are you seeing evidence that purchases are being made by Boston-based workers?
HARRINGTON: We are seeing that. Statistically, it’s hard to say how many. But we are seeing it. It’s not just Providence. I have friends in East Greenwich who make the commute to Boston. The thing is, I’m an hour from Boston; I have friends from my company who are an hour from Boston in Massachusetts, but they’re paying $300,000 more for a house. It’s not just Providence, it’s Rhode Island in general. If you’re not in Boston itself. Once you get outside that belt, it gets very, very expensive. They expect Boston to continue to expand at a really aggressive rate. Rhode Island becomes a legitimate suburb of Boston, or an alternative to the suburbs of Boston.
PBN: What impact will rising interest rates have on the purchasing patterns in Rhode Island?
HARRINGTON: The short answer is yes it will definitely have an impact because affordability would change for some people. But the more accurate answer is that if it is gradual and it coincides with the economy improving, it shouldn’t make a substantial difference. If wages can rise and the interest rates rise gradually. But there is no doubt if interest rates are a point higher in the morning, a certain number of people who qualify now would not qualify.
PBN: How dramatic is the decrease in Days on Market for Rhode Island? In some communities, the decline was 10 days fewer, year over year. Is this a dramatic change?
HARRINGTON: That only tells part of the story. If there was more inventory, the days on market would have gone down even further. The really good inventory is going much, much, much faster. But you have a lot of old housing stock that people are hesitant to purchase. You have to put a lot of money into it. People are gravitating to the ones that need less money and are in superior locations.
PBN: What is your expectation for the coming year?
HARRINGTON: I think it’s going to be a continuation of the improvement. It’s very affordable now. I see more of the same.
