Rutley on RI's Lagging Real Estate Inventory and Are We Headed for a Correction
Rutley on RI's Lagging Real Estate Inventory and Are We Headed for a Correction
“We’ve got more millennial, Gen Z, Gen X buyers out there than ever before, and we just don’t have the inventory,” said Rutley, who talked about what the inventory levels are currently in Rhode Island compared to last year.
“I think we’ve been really spoiled by interest rates over the past decade — to be honest, since around 2008. Five (percent) is not bad, but recently we’ve had interest rates in the high twos and threes, so when we when we see it’s creeping up to the high fours and low fives, it’s scary when you hear that, because every point that goes up, a buyer is losing about ten percent of the value that they could offer on a home,” said Rutley. “And if they’re a normal American and have to worry about the debt-to-income ratio. So that changes the amount and the availability of homes they can purchase.”
“At five percent, even at six percent, it’s still historically low-interest rates,” he added. “I don’t think we’re going to see any huge changes in the influx of buyers and demand until we get much higher than that.”
“What I’m telling people is that there will probably be somewhat of a market correction at the end of this year into next year — I think the correction is going to look like more of a seasonal market with less competition. Instead of 20 offers on a home, there maybe five or six.”
“It’s going to be a little different — this correction doesn’t mean there’s going to be any crash, in my opinion, or that prices are going to go any lower. I think that prices are growing to where they need to be,” said Rutley. “We’re seeing a lot of homes that are selling in the million-dollar range..in fact a home that’s for sale that’s over a million is pretty unremarkable, it’s actually pretty average for a lot of communities.”
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