High-end R.I. homes on shoppers’ holiday lists

The end of 2012 was hectic for David Godden, director of “distinctive home” sales at Randall Realtors in Westerly, and traffic at the shopping malls wasn’t the issue.
His calendar was filled with closings of expensive houses, which sold in southern Rhode Island last year at a pace unseen since the recession.
In the days after Christmas, Godden saw two Westerly sales of more than $3 million completed after listings of $5 million and $12 million were finalized just before the holiday.
Other up-market Realtors were similarly busy as the recovering market and fear of “fiscal cliff” tax increases drove a flurry of major sales before the end of the year.
In the first 11 months of 2012, there were 155 Rhode Island residential sales of $1 million or more, 46 percent more than the same period in 2011, when there were 106, according to figures from the Rhode Island Association of Realtors.
The trend continued even higher up the price ladder as sales of properties for $5 million or more climbed from five in 2011 to nine last year.
“I think a lot of it is pent-up demand, because the high-end market, until the end of 2011, was sporadic and all of a sudden, people started coming out of the woodwork and showing interest in these homes,” Godden said. “And I think the fiscal cliff lit a fire under sellers. If you closed for $3.3 million, you could be savings a couple hundred thousand dollars in taxes by not doing it in 2013.”
In addition to capital-gains tax implications, Godden said some homeowners were concerned that mortgage-interest deductions for second homes would be eliminated.
According to Multiple Listing Service statistics from Lila Delman Real Estate in Narragansett, with five days in December still to go, there had been 165 sales of $1 million or more in 2012 compared with 111 for all of 2011.
“I think it is about opportunity and value, as some of these properties that sold have been on the market for years,” said Lila Delman President Melanie Delman. “It’s also about confidence in the economy.”
Gustave White Sotheby’s International Realty closed three sales of more than $3 million in the last days of the year, including Truesdale Farm (which straddles Little Compton and Westport) for $9 million and Cedar Point in Jamestown for $7.2 million.
Like the broader real estate market in 2012, luxury sales showed buyers taking advantage of lower prices, with the higher volume of transactions pushing down median values for all but the most exclusive estates. The median price for all sales of $1 million or more was $1.4 million in 2012, down from $1.5 million in 2011, according to the Rhode Island Association of Realtors’ figures.
It was among super-high-end trophy properties where 2012 saw the most progress with median sales above $5 million rising from $6.3 million in 2011 to $6.9 million in 2012.
Landmark sales in 2012 included Clarendon Court in Newport for $13.1 million, The Pink House in the Watch Hill village of Westerly for $12 million, Sakonnet Vineyards in Little Compton for $8.9 million and Hopedene in Newport for $16 million.
The Hopedene sale was the second-largest in Rhode Island history behind the $17.1 million sale of nearby Newport estate Miramar at the height of the boom in 2006.
Delman said despite all the progress the Rhode Island luxury market has made this year, it is still lagging somewhat behind the rebound in the areas such as the Hamptons, Martha’s Vineyard and Nantucket.
As for what Rhode Island needs to rebound like those other rarified areas, Delman said the condition of the state economy and taxes are important for wealthy buyers looking at mansions as regional family gathering places as much as personal living spaces.
Godden said the high-end buyers in Watch Hill are coming from the same New York metropolitan area as before the recession.
Most, he said, pay in cash and know the area already through renting or friends. So far, interest in Rhode Island real estate from overseas has not started showing up yet, he said.
“We see very few virgin buyers who are new to the area or the upper end of the market,” Godden said. “And we are not seeing the international buyer yet, but I feel like it is coming. It is still pretty conservative around here.”
Looking ahead to what the boost of 2012 activity will mean for this year, Godden said it shouldn’t be interpreted as a sign that prices will take off or things will return to the giddiness of 2006.
“Some [properties] were on the market for a while at too high a price,” Godden said. “Even in the high-end market, the buyer is very savvy today. Unlike in 2006, people aren’t just going to buy luxury houses because they go on the market. Some of the ones that sold this year were unique properties and they were priced right.” •

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