The Providence real estate market continues to see blue skies in 2016. The first-half of the year was backed by strong home prices and attractive appreciation rates, paired with an improving economy and one of the most affordable housing market in the country. In addition, new housing construction remains hot. The number of new homes being built n Providence continues to outpace the national average, which could supply a stream of investor opportunities down the line. Together, the Providence real estate market is primed to see a big second-half of 2016.
Providence, RI Real Estate Market Statistics:
The Providence real estate market remains the dark horse of the industry in 2016. Appreciation rates continue to surpass the national average, while total equity gains remained on pace with the national average. The second quarter witnessed Providence real estate appreciate at a one-year rate of 6.4 percent, compared to the national average of 4.9 percent. While three-year rates rose to 13.6 percent for Providence real estate during Q2, ultimately it fell short of the 17.8 percent posted by the national average. However, Providence real estate investing remains on pace to see increased activity in the second-half of 2016. For those considering Providence real estate investments, the following highlights appreciation gains in previous years:
- Homes purchased in the Providence, RI housing market one year ago have appreciated, on average, by $20,022. The national average was $14,963 over the same period.
- Homes purchased in the Providence, RI housing market three years ago have appreciated, on average, by $44,005. The national average was $46,878 over the same period.
- Homes purchased in the Providence, RI housing market five years ago have appreciated, on average, by $58,504. The national average was $82,353 over the same period.
- Homes purchased in the Providence, RI housing market seven years ago have appreciated, on average, by $73,590. The national average was $77,054 over the same period.
- Homes purchased in the Providence, RI housing market nine years ago have appreciated, on average, by $10,825. The national average was $31,126 over the same period.
Total equity gains remained strong for Providence real estate in the second quarter of 2016. The past year saw homes earn $20,022 in total equity, whereas the national average earned $14,963. However, aside from year-one totals, equity gains for Providence real estate have failed to surpass the national average in the last nine years. Conversely, price appreciation and principle payments in the last three years have boosted total equity growth since the recession. With this combination of ingredients, it’s hard not to be bullish on Providence real estate investing in the second-half of 2016.
Along with appreciation gains, foreclosures are another element of real estate investing. According to RealtyTrac, Providence saw 884 properties in some stage of foreclosures during the month of September, which represents a three percent decrease from the previous month, compared to a four percent increase from the same time last year. In terms of REO properties, the Providence real estate market saw bank owned properties fall 25 percent from the previous month. However, in comparison to the previous year, REO real estate skyrocketed to 75 percent which could signal potential opportunities for investors.
Providence, RI Real Estate Market Summary:
- Current Median Home Price: $265,600
- 1-Year Appreciation Rate: 6.4%
- 3-Year Appreciation Rate: 13.6%
- Unemployment Rate: 5.1%
- 1-Year Job Growth Rate: 1.3%
- Population: 177,994
- Median Household Income: $56,361
Providence, RI Real Estate Market (2016) — Q2 Updates:
The Providence real estate market remains a force to be reckoned with in 2016. The median home price for Providence real estate was $265,600 during the second quarter, compared to the national average of $239,167. Better yet, gains in the last three years have extended the trend of positive growth since the recession. The second quarter also saw one-year and three-year appreciation rates of 6.4 percent and 13.6 percent respectively.
Aside from growing home prices, the Providence housing market continued to experience a wealth of positivity in the second quarter. Home affordability remained below the national average during the second quarter, as homeowners paid 11.4 percent of their income to mortgage payments, whereas the rest of the country paid 15.8 percent. Although historically low in comparison to the national average, home affordability further improved in Q2.
One component that could influence home affordability for years to come is new housing construction. According to the National Association of Realtors (NAR), the current level of construction in Providence is 37.2 percent above the long-term trend, while the percentage of single-family housing permits reached 23.7 percent, higher than the 10.6 percent the national average saw. Whether investment opportunities or affordable housing, new housing construction is expected to benefit the Providence real estate market in more ways than one.
Despite modest gains, the local economy in Providence continues to lag behind the national average in both unemployment and job-growth. The unemployment rate for Providence reached 5.1 percent during Q2, compared to the national average of 4.9 percent. Although improvements in employment are being made, one-year job growth failed to surpass the national average during the second quarter, as jobs in Providence grew at a rate of 1.3 percent compared to the rest of the country at 1.9 percent.
Moving forward, the NAR expects to see weaker price growth for the Providence real estate market in the second-half–but not by much. Providence is expected to see growth at a rate of 3.4 percent, compared to the national average of 3.6 percent. That said, the Providence real estate market is shaping up to be one of the hottest markets in the country.
