Glimmers of hope in the local, Rhode Island economies

For once, some of the economic news is good

By Will Collette

While demand for food from local social service agencies continues to climb – and volunteers at Charlestown’s Community Garden hoe their hearts out to meet demand – we’re starting to see some signs that we may have hit bottom and are now starting the slow climb out.

Foreclosures are down by 0.5% statewide and, according to both Zillow and RealtyTrac, Charlestown’s inventory of distressed properties has also declined slightly down to just about a dozen homes. 

According to Town Clerk Amy Weinreich’s report to the Town Council, the pace of foreclosures in Charlestown so far this year is slightly behind last year’s record pace.

Also good news, especially if you support the Charlestown Citizens Alliance’s effort to de-populate Charlestown, Amy’s report shows that at mid-year, the number of Charlestown residents who died was 56% higher than new births (25 to 16).

Charlestown home values also seemed to have not only stabilized but are showing a slight uptick. Even though Charlestown home values are still down 5.5% compared to last year – the biggest drop among the towns in our area – Charlestown’s values are still higher than its neighbors. The current average home value in Charlestown is just a shade under $300,000.

There are fewer homes on the market in Charlestown priced at the “affordable” mark of $225,000 but that could be due to completed sales of the backlog of lower priced and "distressed" homes Charlestown had on the market as recently as three months ago.

Unfortunately, according to Zillow.com, Charlestown still lacks year-round rental units – none listed currently on Zillow.

Revised numbers from the state show that Rhode Island actually gained 7,000 jobs in the first quarter of 2012, rather than losing 1,200 as RIDLT had earlier reported. That’s a net pick-up of 4,800 jobs.

Unfortunately, a lot of those jobs are less than full-time. About one in every five Rhode Island workers (18.9%) is classified as “under-employed,” meaning they wanted full-time work, but couldn’t find it. Rhode Island’s under-employment rate is third highest in the nation, behind Nevada and California.

Current properties for sale in Charlestown at $225,000 or less

The last bit of economic news is that the Commerce Department reports that consumer income increased by 0.5% between May and June, a very healthy jump that puts consumer incomes 3.5% ahead of last year. That’s the good news.

Inevitably in economics, there’s always a down side which is that consumer spending continues to decline, despite the bump in income.

Part of the decline has to do with lower gas prices at the pump, which is good, but the money saved from cheaper gas isn’t being spent on any of the other consumer goods that might drive a quicker economic recovery.

Economists note that consumer anxiety most probably held back consumer demand. Given the roller-coaster ride we’ve all been on since the Bush Recession started in 2007, that’s hardly surprising. 

But economists also note that the ratio of consumer income to consumer debt is the lowest it has been in years – one of the by-products of the crash – and sooner or later, consumers will have the confidence to buy the things they need.

It will take a few more months of improvement before any declarations about recovery can be made. As we’ve all seen, there are lots of things that can go wrong – unpredictable events overseas, natural disasters, government gridlock, etc. all can have huge effects on the global, national and local economies.

But it’s nice to be able to say there are some positives for a change.