Outlook strong for luxury homes

Rhode Island Realtors are generally optimistic about the high-end, residential property market continuing last year’s strong showing in 2016, according to several who spoke with Providence Business News.

Benjamin Scungio, manager of Mott & Chace Sotheby International’s Providence office. He sees the market’s success in 2015 as a good sign for 2016.

“There’s a gradual increase in purchases of these million-dollar-plus homes,” Scungio said. “And there’s a higher demand for these properties.”

The definition of luxury is not clear-cut, he said. Although the term “luxury” is often given to properties with a price tag of $1 million or more, many local buyers who purchase real estate below that level consider their purchases to be high-end.

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“Luxury is not necessarily based on price point in Providence,” Scungio said. “We have a lot of amazing homes that sell at all price points which people consider luxury.”

Jim Abbott, manager of Randall Realtors’ Westerly office. He sees potential for growth in the high-end real estate market.

According to Abbott, 2015 saw an increase in “consumer confidence” or “comfort,” which has led to more buyers entering into the market and purchasing homes.

Abbott noted that the number of homes currently on the market is about 75 percent of the total from this time last year. As a result, there is a surplus of buyers looking to purchase property in the state.

He believes that despite the possibility of 2016 seeing rising interest rates, demand for high-end properties as second homes will grow.

“They get to enjoy the investment, make lifelong memories, bring friends and family together,” Abbott said.

Libby Kirwin, owner, Libby Kirwin Real Estate Agency in Newport. “It’s certainly looking positive,” said Kirwin of 2016.

“Whatever comes on the market and is well-built is bought pretty quickly,” Kirwin said.

Kirwin said the likelihood of interest rate hikes this year will “push people to buy and lock in now.” But Kirwin says that even with expected rate hikes, the luxury market will not suffer because many of the properties are paid for in cash.

Melanie Delman, president, Lila Delman Real Estate in Narragansett. She said 2015 was “a banner year” for high-end real estate and expects more of the same this year.

Delman says one of the perks of investing in luxury property in Rhode Island is the variety of offerings the state has, with both its coastal and metropolitan areas within easy access of each other and neighboring states. Delman also notes that buyers who purchase high-end real estate locally experience a better relative value than they would find elsewhere. She also said that investors are beginning to look for options that allow them to “combine work, home and play in a great location.”

Allen Gammons, broker and owner, Berkshire Hathaway HomeServices Gammons Realty in East Greenwich. He expects the market to be “a little bit flat” at the beginning of the year due to limited new luxury construction.

Gammons said that the market will “eventually start to get better” as more out-of-state buyers look for deals.

“Compared to Connecticut and Massachusetts, out-of-state vacation-home buyers see us as a virtual bargain,” Gammons said.

Shannon Buss, managing broker of William Raveis in Newport. She believes there’s an increase in demand for luxury properties that can be credited to job creation and an improving economy. She said nine homes priced above the $1 million mark were sold across the state last month before Jan. 29.

“With the economy continuing to improve, our second-home market is making a comeback,” Buss said. •

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