Rhode Island – A Little State with a Big Hill to Climb
Even before the recession officially began, Rhode Island had some economic problems to worry about. Specifically, its unemployment rate was a full percentage point higher than the national average (5.8%, compared to 4.7% in November 2007).
Today, Rhode Island’s jobs picture is a whole lot bleaker – with more than 10% of residents in the Ocean State out of work. Even worse, experts say they don’t expect the state’s unemployment rate to dip below 10% until 2015.
As you can imagine, it’s had a devastating effect on the local housing market!
Between 2007 and 2012, home prices here fell more than 25%, and some realtors in Rhode Island say they don’t expect prices to make huge increases for the foreseeable future.
The good news? Prices seem to be holding steady. By the end of 2012, the Rhode Island Association of Realtors even reported a 1% increase in the median sales price for single-family homes.
When it comes to condos, though, the story is totally different. For some reason, buyers are willing to spend much more on condos. As a result, the median sales price for a condo in Rhode Island had jumped a whopping 25% by the end of 2012!
The one thing that both homeowners and condo owners are seeing is an increase in demand. Despite the state’s unemployment problem, realtors in Rhode Island ended 2012 on a busy note. That’s because the number of single-family home sales jumped 43% when compared to the previous year – while the number of condo sales saw a 375 increase.
However, realtors in Rhode Island are keeping a sharp eye on Washington D.C. That’s because a decision Congress makes could have a strong impact on housing in the Ocean State.
If lawmakers decide to do away with the home mortgage interest deduction on second homes (an issue they will have to tackle at some point during 2013), it could do serious damage to the housing market in Rhode Island. Not only are vacation homes a big commodity here, but the tourism they attract is a big player in the local economy. If those vacation homes aren’t as appealing to buyers, it could cause a ripple effect.
In 2013, Rhode Island has got to do something to encourage people to move here. Since 2004, more than 24,000 people have moved out of the state altogether. In fact, they’re one of only two states (Vermont is the other) to experience a population decrease during that time.
One thing that will help convince to people to stick around? Affordable housing. Whether you’re a homeowner looking to sell or a landlord with apartments to rent, be prepared to offer a good deal.