There is still a glut of homes on the market in Rhode Island, yet, despite a worsening economy, sales of the most expensive – those priced in excess of $1 million – are nearly on par with last year. In fact, if planned end-of-summer sales are successful, they could surpass totals from the last few years, according to agents and brokers who specialize in high-end properties.
Slow high-end sales earlier this year might have been due to the high inventory, said Liz Taber, broker and manager of Gustave White Sotheby’s International Realty’s Providence office. That office, which opened in February, is an attempt by the company to get a footing in a major Rhode Island market while overall sales are down. It’s also a move to capitalize on high-end East Side properties, which are some of the most expensive in the state. And the new office is keeping Taber busy, with showings most days, she said.
According to the Rhode Island Association of Realtors’ statewide Multiple Listing Service, last week there were 380 homes priced at $1 million or more on the market. Westerly, Narragansett and Jamestown had the most, with 42, 32 and 30 respectively.
But high-end homes are selling in Rhode Island, according to The Warren Group, a Boston-based real estate tracker that publishes Banker & Tradesman.
During the first five months of this year, 47 homes sold in the state for more than $1 million, Warren reported. That’s a slight drop from the 51 sold during the same 2007 period, but sales for the first five months of 2007 had also fallen from the same period during 2006, when there were 54 sales. And 2007 sales rebounded, finishing the year at 158 homes sold – 5.3 percent higher than 2006.
“I don’t think that you’re seeing any true slowdown in the number of $1 million sales,” said Publisher Vincent Valvo. “The numbers might actually be a little bit skewed. Homes that were previously $1.1 million might be selling for $950,000.”
In Jamestown, one property had been listed – by another real estate brokerage – at $8.9 million last year, said Melanie Delman, Newport manager and president of Lila Delman Real Estate. After a $1.5 million parcel was pared off and sold earlier this year, the rest went under contract for about $7 million, or about 5 percent less than its previous price, she said.
Taber said last week that she’s still seeing interested buyers who are soon to “pull the trigger. We have a lot more pending now than we usually see this late in the year. … I think what you’re seeing is smart money looking for bargains.”
She expects prices to continue to inch downward and high-end properties to continue selling through the fall in beach communities, such as Jamestown, Watch Hill and Newport.
In Jamestown, Island Realty Broker Owner Ginny Prichett said the market is “not what it was last year, but it is a very solid market.”
Her office this year has sold eight properties for more than $1.5 million. Almost all of those properties are cottage-style houses with waterfront views. Last year, 12 houses were sold for more than $1.5 million during the entire year. But the highest priced last year was $5.95 million, well above this year’s $4.6 million best, she said.
Cindy Pappas, owner and principal broker of Sullivan Real Estate on Block Island, said New Shoreham is usually slower to respond to market forces than towns on the “mainland.” With an isolated, small supply – the island only has about 2,000 homes – it’s less affected by the economy and buyers are usually flush with cash, she added.
So while island-wide inventory is up by about 20 percent this year, that’s still not a huge amount of homes, because only about 40 homes are sold each year, she said. Since January 2006, 30 houses have sold on Block Island for more than $1 million, according to TWG.
Prices for high-end Block Island homes are down about 10 percent this year, but that’s “not truly a price drop,” Pappas said. “It’s more of a market adjustment because Block Island prices were on the fast-track for a while.” In summer communities, high-end residential real estate isn’t marketed or sold as simply a home. Rather they’re collectibles and rarities, as a few Rhode Island real estate agents described them last week.
At Lila Delman Real Estate, Delman herself only works with select clients that are looking for a unique, high-end home, she said. “A lot of these houses are like pieces of art,” she said. “Once it’s sold, we don’t usually have another house that can meet the buyer’s criteria.”
“Either way, you’re looking at this as a status-symbol home, not just as a practical home. No one practically needs a $1 million-plus home.” Valvo said.
High-end homes are also selling well in Providence, he said.
Since January 2006, 355 homes have sold for more than $1 million in the Ocean State and about 11.5 percent of those have been in Providence, according to The Warren Group. That amount – 41 houses – is second only to Jamestown, where 44 high-end houses have been sold.
During the first half of this year, 274 single-family homes sold in the capital, according to data compiled by Taber from the MLS service. Most of those homes – 68.2 percent – sold for less than $250,000. But seven – all on the East Side – sold for more than $1 million. Two more are pending there, Taber said.
That high-end volume, about 2.6 percent of the total for the capital city, is a little more than the national average for homes that sell for more than $1 million, which account for only about 2 percent of all homes sold, according to Walter Molony, a research and industry-trends spokesman with the National Association of Realtors.
To attract customers, Delman is also looking overseas. She recently sent one of her agents to Europe and Russia to promote and increase the international reputation of Rhode Island’s high-end real estate.
“You have fabulous wealth out there that can spend $60 million on a painting that could be destroyed,” Delman said. “And here you have these great properties, with artisans – who came in from all over the world, carving, molding plaster – and great architects.” •
