Even in a pandemic, money remains no object for the wealthy – at least for those with enough to buy one of Rhode Island’s luxury homes.
The number of high-end home sales in the state last year shot past the previous annual record, with buyers sent into a frenzy by historically low interest rates, strong financial markets and an apparent desire to find a place to escape the coronavirus crisis.
THE TOP 10:
Scroll down to see the most expensive R.I. home sales in 2020.
Economic uncertainty and a tight supply of high-priced homes on the market – which thrust valuations even higher – did little to scare off well-heeled house hunters. The sales of homes with a price of $1 million or more climbed to a record-setting 433 last year, far above the previous high mark of 274 reached in 2019.
In addition, after no Rhode Island homes sold for more than $10 million in 2018 and one surpassed that mark in 2019, four coastal Rhode Island homes fetched more than $10 million in 2020. That included a house on half an acre of land next door to pop singer Taylor Swift’s waterfront mansion on Watch Hill in Westerly. Swift’s new neighbor bought the 7,900-square-foot, shingle-style home at 12 Bluff Ave. for $11.8 million on Dec. 30.
There’s little to indicate that the luxury market will cool off anytime soon, according to many in the real estate industry.
While mortgage interest rates are forecast to climb at some point in 2021, other factors are expected to remain the same – including a large number of people who are untethered from the office, working remotely and looking to shift from urban areas such as Boston and New York City to less-dense locales along the coast.
“This is an unprecedented lifestyle shift,” said Cynthia Moretti, a broker at Lila Delman Real Estate in Newport. In the pandemic, affluent buyers want “a sense of security, health safety and privacy in an exclusive environment that is all their own,” she said.
And many out-of-state buyers see rising real estate prices in Rhode Island as still affordable in comparison to areas where the cost of living is greater.
“I have been in the business for 16 years, with a high volume of transactions under my belt … I have never seen one quite like this,” said Leann D’Ettore, president of the Rhode Island Association of Realtors and owner of Homistic Real Estate Inc. in Cranston. “The demand and value appreciation were more prominent than anything I have seen.”
An example of that value appreciation can be seen in Rhode Island’s top sale for 2020 – a 14-room house on Indian Avenue in Middletown, located on nearly 5 acres overlooking the Sakonnet River, just north of Third Beach.
Built in 1850, the estate had been home to Frances J. Sherman, once the matriarch of The Newport Daily News, and was assessed at $4.6 million by the town as recently as 2017. The property sold in a private transaction last August for $14.3 million – more than three times the town’s valuation. Public records show that the buyer is a limited liability company called Flint Point with an address in a luxury high-rise in Boston.
The high end of the market wasn’t alone in seeing record numbers.
Across the board, D’Ettore said Rhode Island posted the highest number of home sales and prices since the association started keeping track in 1988.
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SALES SURGE: The total number of homes sold for $1 million or more in Rhode Island was 433 in 2020, a 58% increase over 2019 sales and significantly more than in any previous year for the last 15 years. / Source: RHODE ISLAND ASSOCIATION OF REALTORS / Source: RHODE ISLAND ASSOCIATION OF REALTORS[/caption]
There were 11,602 single-family homes sold in 2020 and into the first week of January 2021, according to data provided by the association. That eclipsed the mark of 11,043 in the same period a year ago. The 2020 number bests the old record of 11,309 sales in 2017. The median price also rose from $285,000 in 2019 to $319,000 last year.
At least one company is casting doubt on the staying power of those value increases. Fitch Ratings Inc., an influential provider of credit ratings, research and analysis for financial markets, estimated that home prices nationwide were 5.5% overvalued in the third quarter of 2020 – and 10% to 14% overvalued in Rhode Island.
Fitch noted that personal income trended down in late 2020, the economic recovery slowed and unemployment remained elevated – factors that the agency said won’t support sustainable price growth.
But local real estate agents said no matter the economic forecasts – which have far less effect on the luxury market – the demand is there and it’s not waning. “Right now, we are experiencing a market where the need for housing is stronger and more important than any other factor,” D’Ettore said. “Again, this all stems from very high demand – the highest demand we have ever seen.”
Mortgage interest rates have helped fuel the buying spree. The national average on 30-year, fixed-rate home loans steadily descended from 3.72% in December 2019 to an unheard-of 2.68% in December 2020.
Seemingly, the only thing that might dampen the number of transactions in 2021 is the lack of homes being put up for sale.
Typically, six months of inventory indicates a balanced market for supply and demand. Yet, the supply of homes on the market stood at 2.6 months in January 2020 and shrank to 1.4 months by December.
In Rhode Island as of late February, 185 single-family homes and 32 condominiums were listed with asking prices at or above $1 million.
Realtors say they’ve never seen the supply of homes for sale so low, and it has ratcheted up an already strong seller’s market, setting up situations in which prospective homeowners pounce once houses are listed. Bidding wars have given way to bidders being asked to simply submit their “highest and best” offer upfront.
“There is no question that we are deep in a seller’s market,” said Shannon Buss, broker associate at Randall Realtors. “Prior to COVID-19 hitting, we were already experiencing inventory lows. When the virus hit, out-of-state buyers flooded our coastal markets, which made a tough market the fiercest I have ever seen.”
Indeed, homes overlooking coastal scenes continue to fetch the highest prices by far. Of Rhode Island’s top 10 sales in 2020, only one – a 9-acre estate known as Ker Arvor on Harrison Avenue in Newport – isn’t located along the water. The property, across the road from the entrance to Newport Country Club, sold for $7.3 million to a Silicon Valley technology executive and his wife, a novelist.
The buyer of a Newport mansion along the Cliff Walk at 614 Bellevue Ave. avoided any bidding battles and purchased the Beaulieu estate, built in 1859, for the $12.3 million asking price in March 2020.
The transaction ranked second on the list of the top 10 Rhode Island home sales of the year, but why wasn’t the price driven higher? It was a family matter. San Francisco socialite Diane B. Wilsey used a revocable trust to buy the 16,500-square-foot “cottage” that had been owned by her mother, Dow Chemical heiress Ruth Buchanan, since the early 1960s. Buchanan died in November 2019 at 101.
It has been a different situation for most buyers.
Among real estate agents, stories abound of homes being under contract within days of listing, cash sales and offers well beyond asking prices.
“I represented many sellers and sold many homes in 2020 and every homeowner that I represented will attest to how rewarding it was to sell their home this year,” said D’Ettore.
At the same time, the COVID-19 pandemic has altered what buyers are looking for in a new home – they’re willing to pay more for increased square footage, home offices and gyms, and plenty of outdoor entertaining space.
Lawrence Yun, chief economist at the National Association of Realtors, foresees another banner year – with his projections calling for a 10% rise in home sales across all value levels nationwide. The median home price is forecast to jump 8%, according to a report by Yun.
“Some markets have performed exceptionally well throughout the pandemic and they’ll likely carry that momentum well into 2021 and beyond because of strong in-migration of new residents, faster local job market recoveries and environments conducive to work-from-home arrangements and other factors,” Yun said.
Jeff Sweenor’s custom-homebuilding business is benefiting.
Sweenor, founder, CEO and president of South Kingstown-based Sweenor Builders Inc., said his firm has more than a dozen projects lined up into 2023, ranging from extensive renovations on newly purchased homes to teardowns and rebuilds.
Most of Sweenor’s jobs are along the coast – particularly in Narragansett – and many are involving buyers from the urban centers of New York and Boston who see properties in uncongested southern Rhode Island as a bargain.
Sweenor called the influx of wealthy out-of-state buyers “transformative” for his business.
“And there is a whole other wave of inventory coming our way from architects,” he said. “My gut feeling is that this high-end luxury market is going to last for a while.”
THE TOP 10
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2. 614 Bellevue Ave., Newport | PRICE: $12,264,000 | DATE SOLD: March 27, 2020 | BUYERS: Diane B. Wilsey Revocable Trust and Diane B. Wilsey trustee | SELLERS: Ruth H. Buchanan RET and Todd Traina trustee | BROKER: Gustave White Sotheby’s Realty (seller) | YEAR BUILT: 1859 | BATHROOMS: 15 full, 1 half | BEDROOMS: 19 | LIVING SPACE: 16,500 square feet | PREVIOUS PRICE: Last assessed at $10,955,500 in 2020. / Courtesy Lisette Rooney[/caption]
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3. 12 Bluff Ave., Westerly | PRICE: $11,800,000 | DATE SOLD: Dec. 30, 2020 | BUYER: 12 Bluff Avenue LLC | SELLER: Francis Jenkins | BROKER: Mott & Chace Sotheby’s International Realty (seller) | YEAR BUILT: 1905 | BATHROOMS: 7 full, 2 half | BEDROOMS: 9 | LIVING SPACE: 7,881 square feet | PREVIOUS PRICE: Sold for $1,775,000 in 1987. / Courtesy Mott & Chace Sotheby’s International Realty/Justine CHANG[/caption]
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4. 33 Bay St., Westerly | PRICE: $10,403,000 | DATE SOLD: May 7, 2020 | BUYER: D Trust | SELLER: James Barnes | BROKER: Mott & Chace Sotheby’s International Realty (buyer and seller) | YEAR BUILT: 2005 | BATHROOMS: 6 full, 3 half | BEDROOMS: 6 | LIVING SPACE: 6,417 square feet | PREVIOUS PRICE: Sold for $3,200,000 in 2003. / Courtesy Geb Masterson[/caption]
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5. 41 Ledge Road, | NewporT | PRICE: $9,400,000 | DATE SOLD: Feb. 24, 2020 | BUYER: Dirty Water LLC | SELLERS: Grazyna and Andrew Sadanowicz | BROKER: Lila Delman Real Estate (buyer and seller) | YEAR BUILT: 1926 | BATHROOMS: 6 full, 2 half | BEDROOMS: 6 | LIVING SPACE: 8,100 square feet | PREVIOUS PRICE: Sold for $5,000,000 in 2014. / Courtesy Lila Delman Real Estate[/caption]
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6. 260 Beavertail Road, Jamestown | PRICE: $9,125,000 | DATE SOLD: Aug. 3, 2020 | BUYERS: John D. Russell and Pgmp T | SELLERS: Patricia Young and Paul Hamilton | BROKER: Mott & Chace Sotheby’s International Realty (buyer and seller) | YEAR BUILT: 2004 | BATHROOMS: 4 full, 2 half | BEDROOMS: 5 | LIVING SPACE: 6,555 square feet | PREVIOUS PRICE: Sold for $1,600,000 in 1998. / COURTESY MOTT & CHACE
SOTHEBY’S INTERNATIONAL REALTY[/caption]
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7. 42 Ledge Road, Newport | PRICE: $8,600,000 | DATE SOLD: April 9, 2020
BUYER: 42 Ledge Road LLC | SELLER: Marion Charles | BROKER: Gustave White Sotheby’s Realty (buyer); Lila Delman Real Estate (seller) | YEAR BUILT: 1880 | BATHROOMS: 9 full, 1 half | BEDROOMS: 11 | LIVING SPACE: 12,367 square feet | PREVIOUS PRICE: Last assessed at $7,357,100 in 2018. / Courtesy Lila Delman Real Estate[/caption]
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8. 15 Spray Rock Road, Westerly | PRICE: $7,500,000 | DATE SOLD: Sept. 10, 2020 | BUYERS: Rebecca and Christopher Soder | SELLER: Mark Laracy | BROKER: Lila Delman Real Estate (buyer and seller) | YEAR BUILT: 1919 | BATHROOMS: 3 full, 1 half | BEDROOMS: 6 | LIVING SPACE: 5,000 square feet | PREVIOUS PRICE: Sold for $5,765,000 in 2003. / Courtesy Lila Delman Real Estate[/caption]
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9. 82A Warrens Point Road, Little Compton | PRICE: $7,300,000 | DATE SOLD: Nov. 5, 2020 | BUYERS: Elizabeth and Stephen Knight | SELLERS: Virginia and David Merriman | BROKER: Realty One Group Executives (buyer); Mott & Chace Sotheby’s International Realty (seller) | YEAR BUILT: 1920 | BATHROOMS: 4 full, 5 half | BEDROOMS: 5 | LIVING SPACE: 8,018 square feet | PREVIOUS PRICE: Last assessed at $6,356,400 in 2020. / COURTESY MOTT & CHACE
SOTHEBY’S INTERNATIONAL REALTY[/caption]
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10. 275 Harrison Ave., Newport | PRICE: $7,285,000 | DATE SOLD: Dec. 29, 2020 | BUYERS: Margaret Chai and Sean Maloney | SELLER: Ker Arvor LLC | BROKER: Gustave White Sotheby’s Realty (buyer); Lila Delman Real Estate (seller) | YEAR BUILT: 1931 | BATHROOMS: 9 full, 5 half | BEDROOMS: 9 | LIVING SPACE: 12,500 square feet | PREVIOUS PRICE: Sold for $985,000 in 1982. / Courtesy Lila Delman Real Estate[/caption]
Cassius Shuman is a PBN staff writer. Email him at Shuman@PBN.com.
