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Residential Department: Spotlight: Rhode Island: August 2018

 

Spotlight: Rhode Island

The Ocean State’s economy is still at half tide.

Rhode Island renounced allegiance to the British Crown on May 4, 1776, becoming the first of the 13 original colonies to do so. Fourteen years later, Rhode Island became the last of those 13 to ratify the U.S. Constitution.

At the time, Rhode Islanders apparently worried about the establishment of such a strong central federal government but relented after the other colonies threatened to treat it as a foreign nation and after the addition of the Bill of Rights.

It’s nicknamed the Ocean State, a nod to its 400 miles of coastline syncopated by some 30 islands. It is the smallest of the states in terms of land mass. Rhode Island could fit inside Alaska more than 500 times.

The official name is State of Rhode Island and Providence Plantations. Voters in 2010 overwhelmingly rejected a proposal to drop “Providence Plantations.” (The term plantation was apparently a reference to settlements in the 17th century, not slavery.) The state motto is “Hope.”

While Rhode Island Gov. Gina Raimondo recently pointed to the number of cranes towering across the state as a sign of progress, there’s evidence that economic pain still lingers years after the recession. The single-family median home price, for example, reached $255,000 in 2017, and rose to $275,000 as of this past May. That still lags behind pre-recession levels, however. The unemployment rate fell to 4.4 percent as of this past May from a recession high 11.3 percent. Yet, that’s a higher unemployment rate than the U.S. as a whole.

Rhode Island has a population of 1.06 million, the 43rd largest state in terms of population, according to the U.S. Census Bureau. That’s only grown by about 6,000 people since 2010. Economic analysis company IHS Market noted in a report to state government that Rhode Island has actually experienced negative net domestic migration over the past several years, but migration of residents from foreign nations has helped keep the state’s overall population growing.

Just under a half million people are employed in the state, according to the Rhode Island Department of Labor and Training. Health care is the single largest employment sector in the state, with 81,300 workers. Health care spending is expected to outpace the national average going forward, according to IHS Market. That is expected to help drive future employment gains.

Other major employment sectors include professional and business services, with 65,800 employees; government agencies, with 60,600; and accommodation and food services, with 50,200.

The state’s per capita personal income in 2017 was $51,503, which is slightly higher than the national average, Department of Commerce figures show. About 12.8 percent of Rhode Island’s population lived in poverty, on average, over a four-year period ending in 2016, census data shows. 

skip to 3 Cities to Watch>>  

Home sales and prices

r_2018-08_Spotlight_chart-1Rhode Island’s home prices have been on a steady rise since the end of the recession. The median sale price for a single-family home reached $255,000 in 2017, according to the Rhode Island Association of Realtors. That’s up from $195,000 in 2011.

That’s still not as high as before the recession. The state saw median sales prices for single-family homes reach $282,500 in 2006 and $275,000 in 2007. The number of closed home sales, however, has been on a steady climb in recent years, going from 6,706 in 2011 to 11,282 in 2017, according to the association. The 2017 figure is higher than in 2007, when 7,600 homes were sold. Last year, the average home sat on the market for about two months — down from 2011, when the average time on the market was 105 day­s.

Unemployment

Rhode Island was hit hard during the Great Recession with an unemployment rate that remained at 10.9 percent or higher during a three-year stretch from April 2009 until March 2012. For four months in 2010, the unemployment rate hovered at 11.3 percent, according to the U.S. Bureau of Labor Statistics. The U.S. unemployment rate reached 10 percent for just one month during the entire recession.

Rhode Island’s unemployment rate has shrunk considerably since then, holding steady at 4.5 percent from this past September through April, before dropping to 4.4 percent in May. That’s still worse than the overall U.S. rate, which stood at 3.8 percent this past May. IHS Markit predicts that Rhode Island’s population and labor force will grow at about 0.1 percent per year over the next few years — a growth rate that would rank among the lowest in the country.

Delinquencies and foreclosures     

r_2018-08_Spotlight_chart-2The delinquency rate for mortgages in Rhode Island, defined as loans 30 days or more past due, was 4.8 percent as of March 2018, according to CoreLogic’s Loan Performance Insights Report. That’s down from 5.5 percent for the same month in 2017, but it’s higher than the national average of 4.3 percent. The foreclosure rate in the state stood at 0.8 percent in March 2018, down from 1.1 percent for the year-earlier period. Nationwide, 0.6 percent of outstanding mortgages were in foreclosure as of this past March, according to CoreLogic.

The number of foreclosure filings as measured by auctions and homes taken back by banks, or real estate owned (REO), totaled 4,033 in 2012, according to Attom Data Solutions. Foreclosure filings generally have been on a decline over the past six years, although the number spiked to 3,555 in 2016. Last year, Rhode Island recorded 2,343 filings.

Sources: Attom Data Solutions, CoreLogic, Go Providence, IHS Markit, History.com, NBC Channel 10, The New York Times, NPR, Pawtucket Foundation, Pawtucket Red Sox, The Providence Journal, Rhode Island Association of Realtors, Rhode Island Department of Labor and Training, Rhode Island Secretary of State, State Symbols USA, TheCoolist, U.S. Bureau of Labor Statistics, U.S. Department of Commerce, Visit Rhode Island

3 Cities to Watch

Providence

Renegade Puritan preacher Roger Williams founded Providence in 1636 after being forced to flee the Massachusetts Bay Colony. Today, Providence is the capital of the state with a population of 180,000, although neighboring cities push the metropolitan area much higher than that. The metro area’s largest employers include state government, health care system Lifespan, Brown University and CVS Pharmacy, which is headquartered in nearby Woonsocket. Providence also is the birthplace of horror writer H.P. Lovecraft. A festival in Providence honors him each August.

Newport

r_2018-08_Spotlight_cityFounded in 1639, Newport, located on the southern end of Aquidneck Island, has relied heavily on its seaport roots throughout its history, first as a vital hub of the whale-oil trade and, in more recent years, as the home to the Naval War College and Naval Undersea Warfare Center. The warfare center employs more than 2,700 mostly engineers and scientists, according to The Providence Journal. Newport’s White Horse Tavern, founded in 1673, is reportedly the oldest bar in the U.S.

Pawtucket

The Slater Mill, which produced textiles, opened in Pawtucket in 1793, helping to usher in the American industrial revolution. Textiles are no longer so important for the city and region, but Pawtucket remains an important center of commerce. The city of 72,000 is home to the corporate headquarters of toymaker Hasbro, medical supplier Tunstall Americas and tour company Collette. Pawtucket also boasts the longest baseball game played in history. The 1981 Triple-A matchup between the Pawtucket Red Sox and the Rochester Red Wings lasted 33 innings — more than eight hours across two days — and featured future Hall of Famers Wade Boggs and Cal Ripken Jr. The Pawtucket Red Sox won 3-2.

What the locals say

“Houses are selling quickly. The average [time this year] on market is 49 days. It’s the shortest time frame for selling houses in nearly 14 years. …. We’re fortunate in Rhode Island. You get a lot of house for your dollar. A lot of folks in nearby Massachusetts are realizing that. They’re choosing to relocate to Rhode Island out of the more expensive neighborhoods of Massachusetts.”

r_2018-08_Spotlight_local

Joe Luca 
President, Rhode Island Association of Realtors


 

Jim Davis is editor of Scotsman Guide Residential Edition. Reach him at (800) 297-6030 or jimd@scotsmanguide.com.

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