In RI, the Cost of Renting and Buying Is Getting More Expensive and It Is Creating Big Problems
Sunday, May 30, 2021
The cost of housing in Rhode Island is becoming ever more expensive and outpacing wage growth and inflation. While data indicates Rhode Island's economy is floundering, research shows the employment situation not only the worst in New England, and the state's recovery is the worst in the country.
Both rents and the cost of purchasing a home are soaring upward.
While housing prices have skyrocketed across the country, Rhode Island is seeing costs rise at a record pace.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTFor April, the Rhode Island Association of Realtors reported an all-time high in Rhode Island’s monthly median sales price of single-family homes. April’s median price was $349,000, an 18.1 percent gain over April of 2020.
Not only are the costs of homes increasing, but they are also selling at a record pace.
Homes across the country sold even faster in the 50 largest U.S. metros at 34 days on average, down from 50 in April 2020.
In Providence, it is just 28 days on the market.
Cost of Rentals Increasing
Not only is the cost of purchasing a home increasing, but the cost of renting is increasing at an unmatched rate. While in some cities the cost of renting dropped over the past year, Providence saw increases in many key factors.
Data released this week shows that rents in Providence increased 3.8% month-over-month, compared to 2.3% nationally according to Apartment List.
According to another real estate research group, Zumper, the cost of a rental of a one-bedroom apartment rose 6.4% over the past year. Zumper finds that the cost of a rental of a two-bedroom dropped by 4%.
And while rental costs in Providence were overall increasing, the cost of renting in Boston fell by 11% for a one-bedroom and 10% for a two-bedroom.
Providence now is the 17th most expensive city for rental costs in the United States with the median cost of a one-bedroom at $1,400 and $1,660 for a two-bedroom according to Zumper.
Rhode Island's Struggling Economy
The increasing cost of housing creates an even larger issue as the overall economy continues to struggle.
According to multiple reports in the past two weeks, Rhode Island's economy is struggling to recover and trails the rest of the region and some reports rank it for key measures at the bottom in the United States.
The Rhode Island Public Expenditure Council reported that "RI’s GDP is projected to have grown by 3.5 percent (annualized rate) in Q1, but New England’s GDP is projected to have expanded by 5.2 percent and U.S. GDP is forecasted to have grown by 6.4 percent in the same period. Rhode Island’s “growth gap,” which existed before the pandemic, only widened over the last year."
RIPEC also cites that Rhode Island's job recovery is the worst in the region.
This week Wall Street 24/7 ranked Rhode Island's economic recovery #37 in the United States.
Wall Street 24/7 writes, "Rhode Island is one of several Northeastern states with struggling economies. The coronavirus pandemic not only took a greater than average public health toll on the state, it also sent unemployment soaring. There are over 36,000 fewer people working in Rhode Island than there were a year ago, and the jobless rate stands at 7.1%, well above the 6.0% U.S. rate. Economic growth in Rhode Island has also been sluggish relative to much of the country. Due in part to falling output in industries like arts and entertainment and accommodation and food services, Rhode Island’s economy has contracted at an average rate of 0.5% over the past half-decade."
Another study ranks Rhode Island’s recovery of jobs from the coronavirus pandemic as 50th in the United States.
The study that includes the District of Columbia ranks Rhode Island second-worst in the country for “Recovered Most Since Start of COVID-19 Crisis” and second only to West Virginia in job recovery.
And in the shorter term, Rhode Island ranks last #51 for job recovery in the past week.
While the cost of housing continues to rise in Rhode Island, the economic recovery continues to struggle.
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