By most measures, 2022 was a banner year for Rhode Island’s luxury real estate market. A total of 617 homes sold for more than $1 million in 12 months – and two of them reached eight figures.
But when compared with 2021, the outcome was a little lacking, and most real estate observers say we should get used to it in 2023 and beyond.
After eight consecutive years of record sales – and an off-the-charts performance in 2021 in which the market seemed to be supercharged – the red-hot luxury market cooled somewhat in 2022, in part because of a shrinking number of high-end homes available for sale and because concerns about the economy dampened the fervor of some potential buyers.
“You have to call [2021] an outlier,” said Paul Leys, co-owner and broker at Gustave White Sotheby’s International Realty. “I don’t think anyone forecast [the sales figures] were going to beat the numbers from 2021. It’s not bad news that we went down last year.”
Call 2022 a reality check.
David Huberman, a sales associate for Gustave White, said interest rates being low in 2021 plus a high rental market created a climate that fed a frenzy of high-end homebuying activity that year. Now properties are sitting longer on the market, he said, because sellers last year “were shooting for the moon.”
“[Sellers saw it as] if someone will pay me this, I’ll sell the house,” Huberman said.
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1. Treasure Hill | 2 Kidds Way | Westerly Price: $17,700,000 | Buyer: Stuncko Properties LLC | Seller: Diane McLean | Broker(s): Lila Delman Compass (seller); Olga B. Goff Real Estate (buyer) | Year built: 1988 | Bathrooms: 8 full, 1 half | Bedrooms: 7 | Living space: 8,086 square feet | Previous price: Sold for $5,500,000 in 2007 / COURTESY LILA DELMAN COMPASS[/caption]
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2. 101 Harrison Ave. | Newport Price: $15,000,000 | Buyer: 101 Harrison Holdings LLC | Seller: Christopher J. Culver | Broker(s): | Gustave White Sotheby’s International Realty (seller and buyer) | Year built: 1957 | Bathrooms: 3 full, 1 half | Bedrooms: 3 | Living space: 2,408 square feet | Previous price: Sold for $5,700,000 in 2016 / COURTESY LILA DELMAN COMPASS[/caption]
Last year marked the first time since 2013 that there was a year-over-year decrease in the number of sales over $1 million across Rhode Island, which climbed from 148 in 2013 to 698 in 2021, before ticking down to 617 last year, according to data from the Rhode Island Association of Realtors.
The marquee sale in 2022 was the 8,086-square-foot Treasure Hill coastal estate at 2 Kidds Way in Westerly, acquired by Stuncko Properties LLC on Oct. 31 for $17.7 million. The asking price had been $18.5 million.
If the sale had occurred in 2021, it would have only been the fourth-highest sale of the year instead of No. 1. By comparison, the top sale in 2021 was $30 million, a mansion along storied Bellevue Avenue in Newport called Clarendon Court.
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3. 8 Westerly Road | Westerly Price: $9,950,000 | Buyers: Christopher B. Combe and Christina Van Munching | Seller: A trustee of Penelope Kelly | Broker(s): Mott & Chace Sotheby’s International Realty (seller and buyer) | Year built: 1899 | Bathrooms: 6 full, 1 half | Bedrooms: 9 | Living space: 5,525 square feet | Previous price: NA / COURTESY MOTT & CHACE SOTHEBY’S INTERNATIONAL REALTY[/caption]
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4. 648-A West Beach Road | Charlestown Price: $9,500,000 | Buyers: David H. and Tracy L. Overbeeke | Seller: Kimberley S. Connolly Revocable Trust | Broker(s): Lila Delman Compass (seller and buyer) | Year built: 1995 | Bathrooms: 5 full, 1 half | Bedrooms: 5 | Living space: 3,996 square feet | Previous price: Sold for $6,500,000 in 2020 / COURTESY LILA DELMAN COMPASS[/caption]
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5. 673 Bellevue Ave. | Newport Price: $6,676,300 | Buyer: 673 Bellevue LLC | Seller: Oliviajuliet LLC | Broker(s): RE/MAX Professionals (seller); HomeSmart Professionals Real Estate (buyer) | Year built: 1855 | Bathrooms: 6 full, 2 half | Bedrooms: 7 | Living space: 9,803 square feet | Previous price: Sold for $5,995,000 in 2020 / COURTESY LILA DELMAN COMPASS[/caption]
“Basically, real estate does not do well with uncertainty,” Lila Delman Real Estate Ltd. associate broker Annie Becker said, “and 2022 was really all about uncertainty.”
Still, 2022 was record-setting in another way.
Rhode Island’s median high-end sales price reached $1.83 million last year, eclipsing the previous record of $1.55 million, set at the height of the COVID-19 pandemic in 2020.
Real estate agents say the lack of luxury homes on the market has pushed the median price higher.
“We have a shortage of homes,” Huberman said. “We don’t have a shortage of buyers.”
[caption id="attachment_431770" align="alignright" width="306"]
A SMALL STEP BACK
While the total number of homes sold for
more than $1 million exceeded 600 for a
second year in a row, 2022 saw an 11.6% decrease
in sales from 2021. It is the first time since 2013
the state saw a year-over-year decrease in
high-end home sales. Two of the top 10 home
sales last year were in excess of $10 million. / SOURCE: RHODE ISLAND ASSOCIATION OF REALTORS[/caption]
Typically, six months of inventory indicates a balanced market for supply and demand. Yet, the supply of homes on the market at all price ranges stood at 1.4 months in January.
In Rhode Island as of late February, 160 single-family homes were listed with asking prices at or above $1 million. When the market was at its hottest two years ago, that number stood at 185 in February.
Another way 2022 was markedly different: local agents say that while rising interest rates had a cooling effect on potential buyers looking at lower-cost homes, there was less of a deterrence among high-end buyers.
Instead, with higher borrowing costs and the possibility of a recession on the horizon, more well-heeled house hunters acquired properties with cash instead of credit.
Indeed, the Rhode Island Association of Realtors says nearly 54% of the home sales of more than $1 million were cash deals in 2022 – up from 51% the year before.
At the same time, out-of-state buyers continued to fuel high-end sales in Rhode Island because the Ocean State still offers bargain home prices compared with affluent oceanfront locations in Massachusetts, Connecticut, Long Island, and even Southern California, Realtors say.
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6. Long Pond Farm | 527 Ministerial Road | South Kingstow Price: $6,595,000 | Buyers: Peter Gabriele and Alexandra Gabriele | Sellers: Hugh Weidinger, Catherine Gruhler and Jessica Weidinger, as part of The Weidinger Family Trust | Broker(s): Mott & Chace Sotheby’s International Realty (seller), Berkshire Hathaway Home Services New England Properties (buyer) | Year built: 1929 | Bathrooms: 4 full, 2 half | Bedrooms: 8 | Living space: 6,364 square feet | Previous price: Sold for $2,400,000 in 2008 / COURTESY MOTT & CHACE SOTHEBY’S INTERNATIONAL REALTY[/caption]
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7. Merrillton | 25 Bowery St. | Newport Price: $6,125,000 | Buyer: Merrillton LLC | Sellers: Peter L. Jenkins and Mary C. Marwick | Broker(s): Vanderbilt International Properties Ltd. (seller); Gustave White Sotheby’s International Realty (buyer) | Year built: 1849 | Bathrooms: 8 full, 2 half | Bedrooms: 8 | Living space: 7,596 square feet | Previous price: Sold for $8,000,000 in 2014 / COURTESY LILA DELMAN COMPASS[/caption]
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8. Beacon Hill House | 60 Beacon Hill Road | Newport Price: $6,000,000 | Buyer: Wallace Holdings RI LLC | Seller: BP Realty Trust | Broker(s): Lila Delman Compass (seller and buyer) | Year built: 1979 | Bathrooms: 5 full, 1 half | Bedrooms: 4 | Living space: 6,770 square feet | Previous price: NA / COURTESY LILA DELMAN COMPASS[/caption]
Last year, more than 47% of homes that sold for more than $1 million were bought by non-Rhode Islanders, including people from Massachusetts, Connecticut, New York and California.
And the attention of those buyers was focused largely on Washington County – five of the top 10 home sales for 2022 occurred in communities along Rhode Island’s southern coastline.
That came as no surprise to real estate agents since a year earlier, eight of the priciest sales took place in Newport, leaving luxury waterfront properties scarce in the City by the Sea. Becker says a flurry of sales like that won’t occur on Aquidneck Island again anytime soon.
Indeed, Huberman notes that there are only two high-priced properties currently for sale in Newport County. “On an island in Newport, it’s rare [to not have waterfront availability],” he said.
That will continue to lead wealthy buyers to go hunting for estates across Narragansett Bay in communities such as Westerly, Charlestown, South Kingstown and Narragansett, agents say.
Apparently, they found what they liked there last year.
Aside from the Treasure Hill estate, an 1899-era shingle-style home with nine bedrooms and six baths at 8 Westerly Road in Westerly went for $9.95 million in 2022 – the third-highest sale in the state – and a 3,996-square-foot Charlestown beachfront property at 648-A West Beach Road with five bedrooms and five baths sold for $9.5 million.
The sale of Long Pond Farm at 527 Ministerial Road in South Kingstown on Jan. 20 broke a town record at $6.6 million. In nearby Narragansett, a home at 250 Ocean Road overlooking the Atlantic Ocean sold for just under $6 million.
Rhode Island Association of Realtors President Bryant Da Cruz, a Realtor for Century 21 Guardian Realty in South Kingstown, said Washington County is an attractive location for buyers because the area is “the best of all worlds.”
In South Kingstown and Westerly, “You have proximity to the water. [And] you have a farm rural aspect of it and a little bit of city,” Da Cruz said. He also said Washington County is one of the few places on the East Coast that has very little light pollution at night. And he said some properties in Newport “may be out of reach” for some buyers.
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9. 250 Ocean Road | Narragansett Price: $5,925,000 | Buyers: Michael Vickers and Lesley Vickers | Seller: Essex LLC | Broker(s): Mott & Chace Sotheby’s International Realty (seller); Lila Delman Compass (buyer) | Year built: 1993 | Bathrooms: 2 full | Bedrooms: 4 | Living space: 2,365 square feet | Previous price: Sold for $1,115,000 in 1999 / COURTESY LILA DELMAN COMPASS[/caption]
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10. 611 Indian Ave. | Middletown Price: $5,700,000 | Buyer: Andrew Kraus, trustee of 611 Indian Avenue Realty Trust | Sellers: Linda Cerce and Indian Avenue Realty LLC | Broker(s): Lila Delman Compass (seller and buyer) | Year built: 1960 | Bathrooms: 7 full, 2 half | Bedrooms: 6 | Living space: 5,786 square feet | Previous price: NA / COURTESY LILA DELMAN COMPASS[/caption]
Will the high-end cool down continue? It’s uncertain.
While rising interest rates have little effect on transactions involving multimillion-dollar properties, there are other economic concerns that can have an impact such as inflation and a recession – which can dampen the performance of the financial markets.
Da Cruz believes issues such as rising inflation will be reined in this year but he does see the inventory shortage continuing. For that reason, he predicts 2023 will be a “more normal type of market” in which homes will take a little longer to sell, but not unreasonably long.
Leys is somewhat concerned about a lack of available properties affecting the market throughout the coming year but is confident that transactions will still take place at a healthy clip.
“I think that buyers will be patient,” he said. “If what they want is not out there, they will wait. If they won’t [purchase a high-end home] in 2023, they’ll do it in 2024. I’m very optimistic that when things come on the market, they will sell. If [high-end properties don’t come on the market], we’re going to go out there and find them.”
Correction: An earlier version of this story gave inaccurate information about the No. 5 Rhode Island house sale in 2022. The buyer was 673 Bellevenue LLC, the seller was Oliviajuliet LLC, and the brokers were RE/MAX Professionals (seller) and HomeSmart Professionals Real Estate (buyer). The house was built in 1855 and has six full bathrooms, two half bathrooms and seven bedrooms. The living space is 9,803 square feet. It had previous sold for $5,995,000 in 2020.
