Despite the up-and-mostly down nature of the stock market in 2018, Rhode Island’s luxury real estate market showed no signs of slowing down. And the overall outlook for this year continues to be bright.
A decade after the Great Recession put Rhode Island in an economic vice grip and sales of homes with a price of $1 million or more fell to 85, the last two years have set records. In 2018, 276 homes were sold in the Ocean State for seven figures, one year after a then-record 272 such homes were sold, a recovery from the 2009 trough for the luxury market. If there is a cloud over last year’s sales, it is a small one. For the first time since 2010, no home sold for more than $10 million in Rhode Island.
Gustave White Sotheby’s International Realty broker and owner Paul A. Leys felt that very few homes with water frontage being on the market contributed to a lack of sales surmounting the eight-figure range last year.
“It has beautiful water views and you could sit out and enjoy the views of the ocean. But you couldn’t walk out of your backyard and access the water,” said Leys in describing the year’s most expensive sale, a Newport home known as The Birdhouse, which sold for $9 million but was initially on the market for $10.9 million.
Volume, to a certain degree, made up for the disappearance of eight-figure homes from the sales rolls. Last year marked the third consecutive year in which there were more than 200 homes sold in the Ocean State above the $1 million mark, something that didn’t surprise real estate agents used to working in this rarified air.
“Across all price points, 2018 was a very good year. I guess it would only make sense that the top tier would benefit from a strong real estate market,” said Judith Chace, broker and owner of Mott & Chace Sotheby’s International Realty. “We pretty much saw gains right across the board … and it’s continuing.”
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Continuing growth:
For the second year in a row, the number of homes sold in Rhode Island for more than $1 million were the most on record, at 276, besting the previous high since at least 2005, set in 2017. / SOURCE: RHODE ISLAND ASSOCIATION OF REALTORS[/caption]
Leading the list of the top homes sold in 2018 is The Birdhouse at 70 Beacon Hill Road in Newport. The six-bedroom, 14,912-square-foot home was purchased for $9 million by Judy Sheindlin, better known as “Judge Judy” on the syndicated television show of the same name, and her husband, Jerry – who also briefly served as the presiding judge on the syndicated “The People’s Court” TV show.
Dean A. deTonnancourt, president of the Rhode Island Association of Realtors and broker and owner of HomeSmart Professionals Real Estate of Rhode Island, noted that consumer confidence has been growing with an improved economy, which may be serving as motivation for buyers to invest in a high-end home.
“People are feeling better about their investment opportunities and taking advantage of that. So, you’re seeing the increase in sales,” deTonnancourt said.
Still, he said, concerns over rising interest rates may also have driven individuals to purchase homes now versus putting it off.
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1. The Birdhouse, 70 Beacon Hill Road, Newport Price: $9,000,000 | Date sold: July 30, 2018 | Buyers: Judith S. and Jerry Sheindlin | Seller: Dorrance H. Hamilton Revocable Trust | Broker: Gustave White Sotheby’s International Realty (buyers and seller) | Year built: 2012 | Bathrooms: 6 full, 2 half | Bedrooms: 6 | Living space: 14,912 square feet | Previous price: Originally listed for $10,900,000.
/ COURTESY MICHAEL OSEAN[/caption]
According to data from the National Association of Realtors, the average interest rate for a 30-year fixed-rate mortgage rose from 3.9 percent at the end of 2017 to 4.6 percent at the end of 2018, and it’s forecast to be at 5 percent by the end of this year.
National rates for jumbo mortgages are currently at 4.7 percent, according to the national Mortgage Bankers Association. The average range for jumbo mortgage rates in the Ocean State, depending on lenders, is currently between 4.4 percent and 5 percent, according to Rhode Island Mortgage Bankers Association President Patrick Deady.
Local real estate agents say sudden and dramatic drops in the stock market aren’t going to impact sales of high-end properties, once again pointing to consumer confidence as a more significant factor in this market.
“I think if somebody wants to buy a second home, they’re not going to find out on the internet what is happening globally,” Chace said. “If they decided they want to make the decision for their family, they’re going to make it.”
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2. 45 Thule Cove Road, Narragansett
Price: $8,200,000 | Date sold: Aug. 17, 2018 |
Buyer: 45 Thule Cove Road LLC
| Sellers: Donald and Jasmine Belanger
| Broker: Lila Delman Real Estate (buyer); Mott & Chace Sotheby’s International Realty (sellers) |
Year built: 2008 | Bathrooms: 4 full, 2 half | Bedrooms: 5
| Living space: 5,202 square feet
| Previous price: Originally listed for $9,250,000. Sold for $6,050,500 in November 2004. / COURTESY LILA DELMAN REAL ESTATE[/caption]
DeTonnancourt also said a lack of buyers from an already-limited pool of people who could afford such high-end luxury properties, and timing as to when those properties are on the market, also factored into the state not seeing a $10 million-plus home sale last year. However, deTonnancourt said, it doesn’t mean there aren’t properties worth more than $10 million that could have been on the market at any point.
Two homes with asking prices above $10 million are currently on the market, according to Rhode Island’s Multiple Listing Service records. The top home, the 10,000-square-foot Seaward estate at 339 Ocean Ave. in Newport, is listed for $39 million.
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3. The Playhouse, 294 Ocean Ave., Newport
Price: $6,999,000 | Date sold: Oct. 31, 2018
| Buyer: Forest E. Patten Revocable Trust
| Sellers: David P. Vieau Revocable Trust and Joann P. Vieau Revocable Trust
| Brokers: Teri Degnan Real Estate & Consulting Ltd. (buyer); Gustave White Sotheby’s International Realty (sellers)
| Year built: 1902 | Bathrooms: 3 full, 1 half | Bedrooms: 4
| Living space: 4,732 square feet
| Previous price: Originally listed for $7,850,000. Sold for $2,190,000 in July 2010. / COURTESY MICHAEL OSEAN[/caption]
Water still forms the feature that binds all the top sales to one another, as the state’s top 11 (thanks to a tie at position No. 10) luxury home sales were, once again, located in coastal communities, and the concern about climate change and sea-level rise is mixed.
John Hodnett, president, broker and owner of Lila Delman Real Estate, said he hasn’t sensed concern from buyers, as properties that sold are built in ways in which sea-level rise won’t impact them – such as being on granite coastlines.
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4. 20 Ocean Heights Road, Newport
Price: $6,295,000 | Date sold: May 25, 2018 |
Buyers: Timothy and Lisa Anna Hall
| Seller: Natmo LLC |
Broker: Gustave White Sotheby’s International Realty (buyers and seller)
| Year built: 1996 | Bathrooms: 4 full, 1 half | Bedrooms: 4
| Living space: 6,830 square feet
| Previous price: Originally listed for $6,990,000. / COURTESY GUSTAVE WHITE SOTHEBY’S INTERNATIONAL REALTY[/caption]
However, areas of beach erosion are “hot spots” of concern, Hodnett said. One home in South Kingstown – a 1900 12-bedroom Victorian – has waves crashing into a dune 5 feet away from the property.
The owner, said Hodnett, is “still fighting the battle down there and knew what he was getting into. The house, pretty much after [Superstorm] Sandy, had pretty much tipped over,” noting that the owner felt the ocean view was too good to pass up. DeTonnancourt also said sea-level rise could reflect on the market in the form of oceanfront properties taking longer to sell.
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5 (tie). 14 Ninigret Ave., Westerly
Price: $6,100,000 | Date sold: July 30, 2018
| Buyers: Christopher B. and Christina B. Combe
| Sellers: Michael J. Flynn and Barbara Gallagher |
Brokers: Mott & Chace Sotheby’s International Realty (buyers); Randall Realtors (sellers) |
Year built: 1898 | Bathrooms: 9 full, 2 half | Bedrooms: 8
| Living space: 6,974 square feet
| Previous price: Originally listed for $6,500,000. Sold for $1,200,000 in October 1998. / COURTESY RANDALL REALTORS[/caption]
Flood insurance can be a major factor in how the market for waterfront homes goes. John Lapointe, account executive for Lapointe Insurance Agency in Fall River, said he’s seen people walk away from potential sales due to flood insurance costs. He said the most coverage a homeowner can get for flood coverage via the National Flood Insurance Program is $250,000, which results in annual premiums being more than $10,000 in high-risk flood zones along the coast.
But flood insurance premiums for high-end homes can vary depending on which flood zone they are located in. Zones with higher flood potential result in higher premiums. Using a $1.4 million home in South Kingstown located in a V flood zone as an example, Lapointe said a $400,000 replacement-cost policy would result in a $15,000 annual premium via private insurance. Banks issuing jumbo mortgages require flood insurance policies for homes in high-risk areas, according to the MBA.
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5 (tie). Edgecove, 6 Waters Edge Road, Westerly
Price: $6,100,000 | Date sold: Sept. 4, 2018
| Buyers: John Alexander Cecil-Swainson and Linda Montgomerie Swainson |
Seller: William G. Clark Estate
| Brokers: Mott & Chace Sotheby’s International Realty (buyers); Olga B. Goff Real Estate (seller) |
Year built: 1879 | Bathrooms: 5 full, 1 half Bedrooms: 8 |
Living space: 4,500 square feet
| Previous price: Originally listed for $6,495,000. / COURTESY MOTT & CHACE SOTHEBY’S INTERNATIONAL REALTY[/caption]
Homeowners also can purchase an excess policy – up to $1 million in replacement costs – and annual premiums would rise to as high as $25,000, Lapointe said. He also said homes may require an elevation certificate, provided by licensed land surveyors, to find out how high the building is above the base flood elevation in order to get a quote from insurance agencies.
“The higher [the elevation] is, the less the risk of floods,” Lapointe said. “If a home is built on a hill or built on stilts, that’s going to make the flood insurance more affordable. If the home is built at the base of the flood elevation, it’s going to be more expensive.”
Wind insurance also can be costly. Lapointe Insurance Chief Operating Officer Colette Lapointe McKeon said most properties in Washington County within Wind Zone 3 – where structures have to be built to handle 120 mph wind speeds – have a 5 percent windstorm deductible to pay out of pocket before insurance kicks in.
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7 (tie). Harbor Watch, 169 Wellington Ave., Newport
Price: $6,000,000 | Date sold: April 20, 2018 |
Buyers: Daniel Joseph and Beth Ann Hughes
| Seller: Harbor Watch LLC
| Brokers: Mott & Chace Sotheby’s International Realty (buyers); Gustave White Sotheby’s International Realty (seller) |
Year built: 2007 | Bathrooms: 4 full, 2 half | Bedrooms: 4
| Living space: 7,652 square feet
| Previous price: Originally listed for $6,950,000. Sold for $2,300,000 in June 2005. / COURTESY GUSTAVE WHITE SOTHEBY’S INTERNATIONAL REALTY listed for $6,950,000. Sold for $2,300,000 in June 2005. / COURTESY GUSTAVE WHITE SOTHEBY’S INTERNATIONAL REALTY[/caption]
“If you’re talking a $3 million home, their deductible is likely to be $150,000 for loss due to a hurricane,” McKeon said.
Rhode Island, though, is still projected to have another steady year in the luxury real estate market in 2019. For one, location with a view of the water will still be a draw for potential buyers. Another factor is being close to the state’s capital city, with 70 high-end homes sold located within a 30-minute drive of Providence, 28 on the city’s East Side alone. In the end, however, what happens this year will come down to buyer preference and need.
“I still think the Rhode Island market … is easier to get to than Nantucket, Martha’s Vineyard and Long Island, and you get more bang for your buck here in Rhode Island and in Newport County along the coastline,” Leys said.
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7 (tie). 9 Lighthouse Road, Westerly
Price: $6,000,000 | Date sold: June 12, 2018
| Buyer: 9 Lighthouse Road LLC
| Sellers: Joan Forgan Addington-White, Hilary Wood Addington and Anne Johnson Addington |
Brokers: None
| Year built: 1879 | Bathrooms: 7 | Bedrooms: 5
| Living space: 4,745 square feet
| Previous price: N/A / PBN PHOTO/BRIAN MCDONALD[/caption]
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9. 39 Taylors Lane South, Little Compton
Price: $4,550,000 | Date sold: Nov. 2, 2018 |
Buyer: Kevin P. Gilboy Trustee of the 39 Taylors Lane South Nominee Trust
| Seller: John L. Klinck Jr.
| Broker: Mott & Chace Sotheby’s International Realty (buyer); LandVest Inc. (seller)
| Year built: 1999 | Bathrooms: 3 full, 1 half | Bedrooms: 4
| Living space: 4,137 square feet
| Previous price: Originally listed for $4,550,000. Sold for $3,250,000 in October 2013. / COURTESY MOTT & CHACE SOTHEBY’S INTERNATIONAL REALTY[/caption]
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10 (tie). Wyndham Estate, 36 Beacon Hill Road, Newport
Price: $4,400,000 | Date sold: May 5, 2018
| Buyer: CSS Newport LLC
Seller: Coastway Community Bank
| Brokers: Mott & Chace Sotheby’s International Realty (buyer); Gustave White Sotheby’s International Realty (seller) |
Year built: 1891 | Bathrooms: 7 full, 2 half | Bedrooms: 8
| Living space: 12,279 square feet
| Previous price: Originally listed for $4,995,000. Sold for $6,800,000 in January 2014. Sold at auction for $4,175,000 in September 2017. / COURTESY CONCIERGE AUCTIONS[/caption]
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10 (tie). Slocum Estate, 459 Bellevue Ave., Newport
Price: $4,400,000 | Date sold: Sept. 28, 2018
| Buyer: Tara Griffin
| Seller: 459 Bellevue Avenue Limited Partnership
| Brokers: Mott & Chace Sotheby’s International Realty (buyer); Gustave White Sotheby’s International Realty (seller)
| Year built: 1880 | Bathrooms: 8 full, 3 half | Bedrooms: 12
| Living space: 13,962 square feet |
Previous price: Originally listed for $4,995,000. / COURTESY SOTHEBY’S INTERNATIONAL REALTY[/caption]
