It may be a good time to buy, but in Providence renting has never seemed more popular.
What started as an emergency reaction to the downturn in the housing market – leasing high-end spaces built to be sold as condominiums – has taken on permanence at many exclusive addresses.
With purchase prices in all corners of the market still dropping, rents remain strong as the supply of people willing or able to commit to a new condominium remains limited.
“The rental market is strong in Providence right now and the purchasing market is not,” said Joseph Paolino Jr., managing partner of Paolino Properties, which owns two rental buildings in Providence and a condominium complex in Newport. “When you have an unsure economy plus high unemployment and foreclosures, people are not looking to commit long-term. Renting gives them what they want for a reasonable [cost].”
Last year, Paolino Properties sold its stake in the 903 Residences, a 330-unit development on the Woonasquatucket River in the city built for condominiums and later converted to 231 rentals and 99 condominiums.
Paolino said he expects it to take a “few years” before the condominium market regains its health.
One of the largest residential developments in the city, the 903 Residences now has 231 units set aside for rentals and all of them have leases, with only one apartment unoccupied as a new tenant prepares to move in, said 903 Leasing Manager Christina Thomas.
At The Residences Providence, the 31-story tower attached to The Westin Providence built initially for condominiums, rentals have consistently grown amid sluggish sales and now what was a cap on rentals has been replaced by a cap on sales.
The Residences is 89 percent occupied, with 54 units sold and 35 rented, said Ralph V. Izzi Jr., marketing director for the Cranston-based The Procaccianti Group. Izzi could not provide sales or occupancy figures for previous years.
“Leasing programs at The Residences Providence have been so extraordinarily successful that the inventory of ‘for sale’ residences is being limited to an exclusive selection of distinctive homes,” Izzi said. “The reality is that there are a finite number of available residences within the tower and the logistics of leasing versus selling are slightly different.”
While the trend in Providence is toward rentals, Robert Martin, an agent with Century 21 Crossroads in Wooonsocket, thinks the pattern of turning condos to rentals has peaked elsewhere and will head in the opposite direction soon.