After U.S. housing prices peaked in 2005, the real estate market hit a major pothole. Sales and prices fell, and distressed sales caused a major inventory buildup. But the last few years have seen a much healthier market, and one needs to look no further than Rhode Island’s luxury real estate market for the evidence.
At the heart of the Great Recession in 2009, only 85 homes sold for more than $1 million in the Ocean State, with the high sale price coming in at $6.51 million. In 2016, R.I. saw 203 homes sell for more than $1 million, and leading the charge was a $16.1 million sale.
“The data is indicating that the luxury market in Rhode Island is trending up, which is great news,” said Brenda L. Marchwicki, president of the Rhode Island Association of Realtors and broker/owner of BisMarc Properties. “As the economy improves and the state brings in more jobs, we’re seeing more luxury buyers come … to invest in our waterfront locations.”
Newport’s Fairholme Estate tops the list of largest sales for the second consecutive year, selling in 2016 for $16.1 million after being purchased in 2015 for $15 million. The top 10 residential sales of 2016 dot the state’s southern coast, with half in Newport County and half in Washington County. Last year, only one was located inland, on Providence’s East Side.
Melanie Delman, president of Lila Delman Real Estate International, said, “In 2016 the significant sale was Fairholme, but the other high-end products out there have been somewhat stagnant in price-point over the $4 million range. The market as a whole – not just in Rhode Island – was stagnant this year. Our projection is that this will change.”
Despite the upward trend of the luxury market, the Realtors’ association noted that the state is still in a seller’s market, with a shortage of supply of single-family home listings.
“One of the issues in 2016, continuing into 2017 is a lack of inventory,” said Judy Chace, co-owner of Mott & Chace Sotheby’s International Realty. “A lot of times buyers in this market are very particular – they know exactly the type of house they want to be in. If it is a second home, they have the luxury of waiting for the perfect house to come up – but because of the lack of inventory, buyers are looking outside of their original parameters.”
What are their parameters?
“Location is always first,” said Delman. “Then style, amenities, convenience and walking distance to cultural locations.”
Many high-end buyers are drawn to Rhode Island for its stock of turnkey historic properties.
“People want everything new and in perfect shape. Even if it’s an antique house, they want it in perfect condition,” said Chris West, broker/owner of Gustave White Sotheby’s International Realty.
One luxury real estate trend has not broken: High-end buyers are still looking to Rhode Island for a piece of coastal property for a relative bargain.
“Value is still important to luxury buyers,” West noted. “Anyone who can afford a luxury house is very smart and very sophisticated. So much information is online, they can easily find other homes in the area and see what they sold for. The consumers are very smart – they will not overpay.”
Industry professionals are hopeful that the uphill climb of the Ocean State’s high-end market will endure in 2017 as consumer confidence continues to rise.
“2017 is going to continue to trend upward. Interest rates have made some slight adjustments, but I don’t see anything of a detriment going forward. I think the marketplace will continue to improve. People are realizing that this is a great place to invest,” said Marchwicki.
“We saw a lot of record-breaking sales in 2016, the result of people deciding now is the time to make a move,” said Chace. “We are the tour guides for their dream home. It’s an exciting time for real estate in Rhode Island, and I look forward to seeing what kind of wonderful, record-breaking sales we have next year.” •
View the top 10 home sales in Rhode Island in 2016 HERE.
