How is the real estate in RI

[Woodly Tisme]

To anyone living In Rhode Island how is the real estate market down there. I live in Mass and house prices are outrageous here. When I look in towns like Woonsocket I see houses for very cheap.

[Anthony Thompson]

@Woodly Tisme it’s not bad, not nearly as expensive as the Boston market of course, but our economy is also weaker than Boston. I suspect houses in both states are starting to sell for unsustainable prices, but I’ve had that feeling about Mass longer than RI.

Yes, Woonsocket is relatively cheaper, but it’s also a tougher area too and it’s not really in any main corridor of economic activity. There’s been talk of a “train coming down from Worcester” for a while now, but so far it’s just talk, and I still don’t see any direct connection to the main economic hub (Boston). To me the main economic activity of Woonsocket is the Section 8 housing program.

As always, it comes down to hard factors like the numbers (whether the purchase price is viable given the expected rents and expenses) and soft factors (such as general building quality, neighborhood quality, tenant quality, whether it would be a long distance rental for you or you’re in the area, expected future economic activity and appreciation, etc.)

Yes, prices may be a lot cheaper, but so are rents. So you need to take both factors into account at look at rate of return and then consider softer factors like some of the ones I mentioned, and decide whether the whole picture still makes sense going into another market (RI).

The same thing happened last cycle by the way. House prices shot up further and faster in the Boston market so a lot more money could be made, until the market turned, when those properties had farther to fall, too. RI never experienced nearly as much appreciation, but it also had a lot less to fall. So besides your own situation (what you can buy and where you can or want to buy) it’s also worthwhile considering market cycles and what happened the last time around too.