An index created by e-forecasting.com and Providence Business News reveals a positive forecast of the state’s future. RI’s economic indicators rose by 1% in April, as it “marked the sixth consecutive month of increases in the index, which rose 1.1 percent in March after a 1.2 percent climb in February.”
The rumor around town is that we have reached an “era of rentership,” as many young adults under the age of 35 seem to prefer flexibility to the long-term and stable. If rumors are true, long gone are the days of the nuclear household in the suburbs.
According to Realtormag, Dr. Glenn Crellin, a professor at the Runstad Center for Real Estate Studies at the University of Washington, this trend is merely a misrepresentation of today’s economic trends. Crellin asserts that the generation born between 1980-2000, otherwise known as the “Millennials,” are misrepresented with a mindset that homeownership is as risky and tumultuous as our housing market.
Crellin acknowledges that in comparison to older generations, home ownership in the under-35 population has declined more sharply since the housing bubble burst. He also notes that home ownership in this particular generation rates below 40 percent in 2011, compared to the national rate of 65 percent. With all this in mind, Crellin still believes that the media has drawn a “wrong conclusion from that data.”
Factors such as a tough job market, student loans, and credit card debt certainly do play a part in the decreasing number of first time homebuyers. Yet, these factors do not reflect the mindset of this age group. Homeownership has become more difficult to obtain in comparison to previous generations. But this important moment in an American’s life may instead be viewed as “delayed” rather than obsolete.
According to a recent survey by TD Bank, buying a first home is still very much a goal for the younger generation. In this survey, it states that 85% of US consumers between the ages of 18 and 34 have the intention of becoming homeowners someday.
Meanwhile, condos and townhomes are expected to grow “15 to 20 percent between now and 2030.” The trend of which residential category will become more lucrative is still to be determined, as this generation may value the urban lifestyle more so than the traditional, suburban living that older generations value.
Two of Rhode Island’s high schools were selected in Newsweek’s annual list of the top 1,000 high schools in the country. This particular list ranks the top schools that churn out “college-ready grads” and is based on six components provided by school administrators: graduation rate (25 percent), college matriculation rate (25 percent), AP/IB/AICE tests taken per student (25 percent), average SAT/ACT scores (10 percent), average AP/IB/AICE scores (10 percent), and AP courses offered per student (5 percent). An article on PBN sums up the rankings:
Providence’s Classical High School came in the rankings as #411, with a 99 percent graduation rate, and 95 percent of those receiving their diplomas are headed off to college. Graduates of Classical had an average SAT score of 1578 and ACT score of 31.
East Greenwich High School ranked #824 with a 96 percent graduation rate as 88 percent of its graduating class enrolled in college. East Greenwich’s SAT average was 1703 and an average ACT score of 25.6.
Not only is this great news for the state but the city as well. After the many budget cuts and school closings within the past couple years, the recognition may only help serve as an uplifting indicator that better times are ahead for the academic community in Providence.
Good News: A new forecast anticipates US home prices to increase by 4% per year for the next 5 years. The catalysts behind prices increasing are “good affordability and declining inventories,” according to Fiserv’s market analysis.
If predictions are correct, the worst is over and housing prices have finally hit bottom. Those hit hardest by the recession will most likely witness the biggest increase in prices. On average, home prices have fallen by a third since 2006 and continue to drop, however, prices should start “stabilizing” by the end of this summer and then start climbing.
USAToday.com states that “investors will drive much of the momentum,” followed by first time home-buyers and trade-up buyers. Yet, it should be noted that cities like Las Vegas and Phoenix will be among the first major cities to experience drastic price increases.
So how does Rhode Island fare out?
According to a national market forecast by CNNMoney.com, as of May 2012, “median home prices are expected to fall another 0.8% for the 12 months ending December 2012 but rise 4.1% in the 12 months after that.” And Rhode Island is expected to fall another 1.6% but rise 2.8% by second quarter of 2013.
An increasing number of home buyers are adopting the competitive spirit when shopping for the perfect home. Bidding wars are making a return due to the lack of homes for sale on the market.