Low Inventory Drives Prices Higher

As we enter the last quarter of 2013, the trend we’ve seen since the start of this year continues: a decreasing inventory of homes for buyers who are finally ready to dip their toes back into the market, especially for properties under $300,000.

Statewide, there’s currently just a seven-month inventory of single-family homes listed in that price range. And some communities have an even lower supply. For example, Providence (including the East Side), Pawtucket, Cranston and Warwick all have a six-month – or less –  inventory. With a shortage of choice for buyers, properties are not lasting as long either. In fact, the average number of days on the market for single-family homes in Rhode Island has decreased from 112 last year to 99 so far in 2013.

While year-to-date sales are up 14 percent over last year, the recent dip in availability of homes is starting to hold back pending sales. This month, the number of homes under contract is down 4 percent from October 2012 – and down 7 percent from last month. But when sales do close, the prices are higher than they’ve been in recent years.

With fewer houses on the market, sellers know they can charge a premium for properties that are in a good location and condition. And that’s reflected in the increased sales prices in 2013. So far, the average sold price for single-family properties statewide is $250,400, up from $240,255 in 2012.

Lower inventory combined with rising prices and interest rates that are starting to creep up has made many buyers eager to find the right property now, even with the holiday season looming. So what can sellers do to capitalize on this growing interest? No matter how market conditions may be shifting to favor sellers, if you want your home to follow trend and sell quickly for a higher price, be sure to do your homework to position your property properly.

The best way to start is by getting an accurate estimate of your home’s value. Many realtors offer free market reviews that can help you understand a realistic listing price based on recent sales and other similar homes for sale. And before you list, be sure to ask your agent to walk through your house and identify simple ways you can improve the space, from decluttering and impersonalizing to adding a splash of color to your walls or increasing the greenery outside.

With a short supply of single-family homes, your new listing will be noticed. You’ll just want to make sure it’s for the right reasons.

Judy Croyle (Judy.Croyle@raveis.com) is a real estate consultant with William Raveis (wrrealty.com), 203 South Main Street, Providence, R.I. 02903 and can also be reached at 499-7641.