2013 Rhode Island Housing Market

HonoluluRhode Island real estate professionals anticipate Boston´s bustling economy will spur home sales in their state.

On Jan. 17, 2013, the Providence Journal reported that ¨executives with commercial real estate firm CBRE said that the Rhode Island market has stabilized and will benefit, ultimately, from continued strength in Boston.

“‘New economy’ businesses such as Amazon, Google, Wayfair and Yahoo came to Boston because the city offers an attractive combination of skilled workers and cultural amenities.

‘Slowly, they are pushing other companies and investors to New England’s secondary cities, such as Providence. Also, a solidifying national economy aids that trend.¨

So far, Rhode Island´s home sales are increasing, a continuation of a trend begun in 2012, said Vicki Dolan, president of the Rhode Island Association of Realtors. ¨A wider picture shows that in 2012, overall home sales in Rhode Island were up nearly 20 percent over 2011. The statewide numbers also show that overall home sales went up and are holding steady in the first few months of 2013. That, along with an increasing demand for housing and fewer homes going up for sale, suggest a balancing of Rhode Island’s real estate market,¨ she added.

Realtor Livia Freitas Monteforte wrote the following about Rhode Island´s 2013 real estate outlook:

¨Economist Leonard Lardaro of URI releases a Current Conditions Index well worth following. In it he tracks local views on Rhode Island’s economy. He follows 12 economic indicators each month and has reported that ´as 2012 ended, Rhode Island’s economy shifted into a higher gear.´ According to his report about the end of 2012, the CCI rose to 92 in December, which is the highest level since November of 2003.

¨Condo sales in RI soared in January, rising 60 percent from January of 2012.  The median price of condos rose 28 percent to $199,450, while the median price of condo sales sold through conventional means only (not due to foreclosure or short sale) rose to $231,750. The median price has outpaced the median price of single family homes for the past three months, due largely in part to the condo market being less influenced by distressed sales (foreclosure sales or short sales).  With the supply of condos for sale falling every month since early 2012, upward pressure is being put on prices.¨

WPRI.com reported (¨RI median home price jumps 12% in Feb.,¨ March 28, 2013) that ¨the median sale price of single-family homes in Rhode Island jumped 12 percent to $189,500 in February compared with the same month last year. But the Rhode Island Association of Realtors says in a new report Thursday that home sales appear to be slowing, rising only 2 percent to 442 last month compared with February 2012. The group says a factor in the slowdown was an 18 percent drop in the supply of homes for sale.

¨The median price of condominiums soared 55 percent to $193,400 in February compared with the same month last year.¨

Where Rhode Island commercial real estate is concerned, Providence Mayor Angel Taveras recently announced a plan to revive the city´s economy, according to ABC6.com (¨Taveras rolls out plan to jump-start Providence,¨ March 27, 2013). The article reads in part, “Providence Mayor Angel Taveras sees a city with vibrant storefronts, a pedestrian friendly city square, street cars rolling through city streets, a healthy and lively business climate, and a top notch school system.

“Taveras rolled out his plan to help jumpstart the Providence economy and get people back to work. The plan included redeveloping Kennedy Plaza into a public square, bringing streetcars back to the city, bringing life back to city storefronts, cutting red tape for businesses and launching a marketing campaign to bring tourist to Providence.”

Taveras’ 22-page report explores ways Providence might overcome Rhode Island’s unfriendly business climate. “One of the issues addressed is that Providence’s commercial tax obligation on businesses is significantly higher than other cities and towns. Providence also experiences a real estate tax rate 45 percent higher than the statewide average.”

Taveras suggested a number of actions, including the following, to alleviate his city’s economic struggle:

  • Freeze the Commercial tax Rate effective immediately.
  • Fix the permitting problem by creating a new departmental sub group to focus on helping simple small dollar projects proceed quickly. The city will also allow for an online application process.
  • Remove barriers to redevelopment: The city will conduct an inventory of major properties eligible for redevelopment and fast-rack demolition for developers who commit to replacing structures within 18-months.
  • Develop lots citywide: This initiative will offer tax exemptions to incentive new development on Providence surface parking lots.
  • Reform the city’s zoning ordinance: the city will undertake a comprehensive update of the current zoning ordinance in order to promote development.
  • Invest in historic preservation: Providence will push for the reinstatement of the Historic Preservation Investment Tax Credit to help private investors rehabilitate historic project throughout Rhode Island.
  • Market available real estate: The city’s Department of economic development will maintain a  database of properties that are vacant or available for development  online. In addition the city will market site selections to firms throughout the country.
  • Rehabilitate foreclosed properties: Providence will work with Community Development Corporations to rehabilitate abandoned and vacant residential properties.  The program aims to put people back to work rebuilding Providence’s hardest hit neighborhoods.

Meanwhile, in March of 2013, Rhode Island Attorney General Peter F. Kilmartin announced a $1.5 million dollar grant to Rhode Island Housing and the agency’s HUD-approved counseling center.

Rhode Island Housing opened the HelpCenter, a comprehensive HUD-approved counseling center dedicated to providing professional support and education to help R.I. homeowners avoid foreclosure in the fall of 2007 to respond to the growing foreclosure crisis. The HelpCenter’s HUD-approved counselors have helped more than 8,000 R.I. homeowners at risk of becoming homeless. HelpCenter counselors take a customized approach by helping struggling homeowners make sense of an existing mortgage, work with lenders and explore options to avoid foreclosure.

“Rhode Island Housing is often the first place struggling homeowners turn when needing assistance with their mortgages, and is our partner in connecting homeowners to available resources,” said Kilmartin. “In 2012 alone, the HelpCenter at Rhode Island Housing received 2,706 inquiries. The numbers don’t lie: the housing crisis in our state is far from over, and this grant to Rhode Island Housing will enable the HelpCenter to help moreRhode Island families stay in their homes.”

Click here for 2012 Predictions