of RI Association of
Realtors. (File photo)
Plenty of potential first time home buyers are pursuing their dreams in New England, but they are being frustrated by a shortage of available properties in their price range, according to a study by a major national real estate firm.
A regional report released by RE/MAX of New England, a compilation of 51 RE/MAX offices surveying first-time buyer activity in Connecticut, southern Maine, Massachusetts, New Hampshire, Rhode Island and Vermont, said first time buyers are being driven to the market by lower interest rates and high rental costs.
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RE/MAX New England Vice President and Regional Director William Soteroff said first-time buyers represent fewer than 30 percent of the regional real estate market, and their traits are the same throughout the area.
“New England has a varied real estate market, but some themes hold true throughout,” he said. “Particularly, we see a great deal of first-time buyers in the market, but they have little to choose from. That’s why it’s important for first-time buyers to be pre-approved for a mortgage and ready to act if they find the home that meets their needs.”
Acting quickly is essential when buying a house in Rhode Island.
The study found that homes in Cranston are sold in 60 to 90 days. In North Providence they sell in 60 to 75 days, and in Newport that number is between 30 and 45 days. The average sell time in Westerly has fallen from two to three months to under eight weeks, and entry-level homes in Warwick often sell within two weeks.
Paul Disegna, manager of RE/MAX Metro in Warwick said the turnover is a result of the sellers’ market.
“Renters become owners and owners move,” he said. “With the market as good as it is, it is good for buyers and sellers to now make their move-up.”
The report found that first-time buyers only make up about 5 percent of the total real estate activity in Warwick. Although Disegna thought that number was a little under the mark, he said the market is tight for first-time buyers and it will be for a while.
“There is definitely low inventory, and I don’t see things changing,” he said “It’s obviously a sellers’ market, which is common sense, and I haven’t seen anything like this since the mid to late eighties.”
According to Statewide Multiple Listing Service 1,641 single family properties sold during the first three months of 2001, which represents a 3.4 percent decrease from last year’s sales at the same time.
Estelle Smith, president of the Rhode Island Association of Realtors and broker/owner of Middletown’s Benchmark Associates said the number of sales is down because the number of available homes is down.
“The market momentum picked up this year right where it left off at the end of last year with demand for Rhode Island homes outpacing supply,” she said. “Single-family home sales are still brisk as the desire for homeownership remains keen.”
Smith said inventory has shrunk about 13 percent from April 2000, and there is less than half of the number of homes available in 1999 on the market.
“The reduced supply of existing homes for sale is keeping the number of transactions down and delaying others on home purchases,” she said. “Realtors are selling homes faster than they can be replenished.”
The RE/MAX study found that low inventory means less discretion in location for first-time homebuyers. Soteroff said the old saying that the three most important factors in real estate are “location, location, location” does not hold true. With high prices and low inventory, he said obtaining a property for the right price is of the highest priority.
