These days, most of the prospective homebuyers who call real estate agent Kira Greene aren’t from Rhode Island, and in a strange way, that is helping to fill luxury apartments here.
Greene says three-quarters of her clients looking to buy a high-end home in the Ocean State are from Boston, New York, the Washington, D.C., area and California. But because the demand is high and supply is low, some of these people are choosing to rent a place locally while the search for the right house unfolds.
Indeed, the hot housing market continues to influence the rental market as people interested in buying a home are forced to stay on the sidelines as they wait for the inventory of homes on the market to increase and interest rates to decrease. Demand for apartments is high, pushing rents higher.
And it’s no different at the luxury level. The rents for high-end apartments remain inflated in Rhode Island, and agents don’t see that changing much anytime soon.
Greene, the founding agent at Compass Real Estate’s Providence office, says out-of-staters have been drawn to Providence in higher numbers since the COVID-19 pandemic because of its relatively lower cost of living compared with bigger metro areas and the accessibility that comes with the state’s smallness.
“This trend is still strong, and I expect it to continue,” Greene said.
In January, the national real estate brokerage Redfin said its analysis of apartment asking rents in the last quarter of 2024 showed that the Providence area is the least affordable rental market of 44 major metro regions in the U.S.
In fact, Providence beat out Miami and New York City, which were second and third, respectively. The analysis ranked metros by the percentage difference between the income required to afford the median asking rent and the estimated median renter income.
While the median asking rent in metro Providence was $2,145 a month – lower than $2,373 in Miami and $2,805 in New York – Providence’s estimated median renter income was $50,408, lower than Miami ($57,157) and New York ($71,376), according to Redfin. But Providence’s renter income was 41.3% less than what’s required to afford the median rent, which was the largest shortfall among analyzed metros.
The report said Providence residents would have to earn a median income of $85,800 for the median asking rent to be affordable – up 12.6% from the $76,200 needed a year earlier.
Those looking for high-end long-term rentals have a few options in Rhode Island, including units in the high-rise buildings in downtown Providence such as The Residences Providence and Waterplace Towers.
A condo on the 25th floor of The Residences is being marketed at $6,100 each month. The 1,416-square-foot unit has two bedrooms and two bathrooms. Just behind it, listed at $6,000 per month, is a 1,323-square-foot unit on the 28th floor with two bedrooms and two and a half bathrooms.
While those are steep prices – nearly three times the median asking rent in the Redfin analysis – it’s reasonable for those with a luxury budget given The Residence’s amenities and central location, said Stephen Antoni, an associate real estate broker at Mott & Chace Sotheby’s International Realty.
Aside from an indoor connection to the Providence Place mall, the R.I. Convention Center and the Amica Mutual Pavilion, other amenities include: a restaurant downstairs, a 24-hour concierge service, security cameras and privacy.
Waiting lists are frequent, and some luxury units don’t even hit the market before a renter is ready to move in.
“My guess if these two units [in The Residences] each pumped the price up to $6,500, they would probably get that as well,” Antoni said. “Pickings are slim.”
And property owners are fetching high rents beyond downtown, particularly on the East Side of Providence. For instance, on Waterman Street in Wayland Square, a newly constructed two-bed, one-bath unit is coming available in May for $4,000 a month with top-end features such as a 60-inch TV, wireless window shades and in-unit washer and dryer.
Derek Simpson, a real estate agent with Residential Properties Ltd., says he’s also seen a steady stream of luxury renters coming from larger cities such as Boston or New York to Providence, where amenities offered in those cities can be found at lower rents.
“If anything comes on the market in the 02906 ZIP code on the East Side, it tends to get snatched up really quickly,” Simpson said.
But also, parents of millennials who purchased property in Providence a few years ago have been relocating to be near their family, Greene said.
The high demand has certainly kept prices up in Rhode Island. And observers don’t expect they will come down anytime soon, but agents say there are signs it’s beginning to stabilize at the top.
As of the end of February, the average rent for all property types in Rhode Island was $2,300, according to rental data from real estate marketplace company Zillow Group Inc. This is $100 greater than the same time last year and $255 above the national average.
“I don’t see a decline,” Antoni said. “In the state overall, everything’s been going on an incline ... and now it’s just cresting a little.”
