Is it Good for RI, If Amazon HQ2 Goes to Boston?
Monday, October 16, 2017
Conventional wisdom is that whatever is good for Boston is also good for Rhode Island, but that may not be totally true.
Moreover, if Boston were to land the 50,000 high paying Amazon jobs - with average salaries over $100,000 - the implications on the cost of housing in Rhode Island could be dramatic.
Boston is emerging more and more as one of the favorites to win Amazon’s second headquarters - HQ2.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTToday, Boston and Massachusetts are already enjoying one of the best economies in the country. Top ten companies like General Electric have already moved corporate headquarters to Boston.
Who Has the Housing
As far as housing, however, there is little inventory in Massachusetts and even less in the Boston-metro area and prices continue to grow.
The median sales price for single-family homes reached a new record high price for the month of August at $610,000, which is a 6.1 percent increase on the August 2016 median sales price of $575,000.
Likewise, the median sales price for condos reached a new high for the month of August at $535,000, up 7.0 percent from the August 2016 median sales price of $500,000.
“It remains a seller’s market as the depleted inventory continues to put upward pressure on prices and forces buyers to make decisions quickly, often in competitive bidding situations,” said President Melody Skye Roloff of the Greater Boston Association of Realtors. “While we typically see a decline in buyer traffic in the fall, we don’t anticipate market conditions changing much before next year, so homeowners contemplating listing their home for sale should feel confident in doing so.”
In contrast, Rhode Island’s single-family home sales rose 4% in August and the median sales price increased 6.1% to $260,000, according to the RI Realtors.
“Where Rhode Island can compete is being a place to live. We have a better quality of life — we offer softer edges in daily life than does Boston,” said Sally Lapides, President & CEO of Residential Properties.
But she cautioned Providence needs an improved transportation system between Providence and Boston. The MBTA does not run at enough convenient hours and Amtrak is limited and comparatively expensive especially for the Acela. The lowest one-way price on the Acela from Providence to Boston is $46.
“if Amazon were to come to Boston, some might come to Providence to rent,” said Lapides.
According to the Massachusetts Association of Realtors, the Commonwealth has just 13,649 houses on the market in the entire state— just 2.9 months of supply.
The condo market is equally tight. In all of Massachusetts there are only 6,144 condo’s on the market — again, just 2.9 months of supply. The median single-family home price in Massachusetts is just under $398,125.
Rhode Island's Opportunity
According to the Boston Globe — there are seventeen communities in New England who have voices that they are entering the competition to land the competition to land HQ2.
The only Rhode Island community on the Globe's list is a long-shot combined effort by Pawtucket and Central Falls. Providence nor a statewide effort by Rhode Island made the Globe’s list.
Both Maine and Vermont have no entries and may not meet with minimum criteria (see below). Commerce Corporation has said Rhode Island will submit an application.
In Rhode Island, some are optimistic that HQ2 to Boston would be beneficial, but the Boston win could simply result in higher housing prices in RI.
As stated median single home prices:
Boston $610,000
Massachusetts $398,000
Rhode Island $260,000
“Currently, RI Housing anticipates that our state will need to add 35,000 new homes over the next 10 years in order to meet projected demand. However, it would also create a tremendous opportunity to engage public and private partners to determine how to best accommodate growth. Already, as housing prices in Massachusetts continue to rise, more and more people are realizing their dollars go further when purchasing a home in Rhode Island. This is a great opportunity for us,” Emily Martineau, External Communications Director for RI Housing told GoLocal in an email.
One of the biggest challenges today for homebuyers in RI is the lack of inventory and increased prices.
“When jobs are created, the economy prospers on many levels, as it relates to real estate the demand for housing increases, whether that be leasing an (apartment, house or condo) or making an investment for the future and purchasing real estate (multi-family, single family or condominium),” said Brenda Marchwicki, the RI Associate of Realtors State President.
“Boston is only approximately 55 minutes from Providence, our housing stock is less expensive than the Boston area, currently we have approx 4.4 months of inventory, which is greater then the Boston market currently," said Marchwicki. "Having MBTA, Amtrak makes it an easier commute for the consumer."
Amazon HQ2 Criteria
- Metropolitan areas with more than one million people
- A stable and business-friendly environment
- Urban or suburban locations with the potential to attract and retain strong technical talent
- Communities that think big and creatively when considering locations and real estate options
Related Slideshow: 7 Reasons Why It’s Smart for Amazon to Select Providence
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