Unlike during the Great Recession, home prices have been rising in the Ocean State during a pandemic that has led 292,000 people to file for unemployment benefits since March 9.
But what on the surface seems counter-intuitive has its roots in simple supply-and-demand economics.
As this week’s cover story explains, the spread of COVID-19 has led many would-be sellers to take their homes off the market. The tightened supply cannot keep up with those who can still afford a major purchase and want to take advantage of historically low interest rates.
The result has been declining sales but rising prices – and bidding wars for many homes that haven’t been pulled from the market.
As a result, tactics such as “buyer’s letters” are becoming more common. Prospective buyers use the letters to explain why they deserve the home. Ashley Avina, who bought a three-bedroom home in East Greenwich in June, believes her letter, and young daughter’s picture, made the difference.
The market will correct, of course, but for now, even the highest bid might not win that dream home.