Rhode Island still value play for wealthy buyers

For all the $5 million sales of oceanfront estates recorded this year, the price of luxury in Rhode Island is a relative bargain.

Consider the alternatives.

The Hamptons, the New York beach community, set a new ceiling on sales in the last quarter of 2015. The typical getaway there sold for $2.2 million late last year, the highest median price recorded since 1999, according to Bloomberg.

Closer to home, Cape Cod and the Islands also had a very good year. Five-hundred and sixty properties exceeding $1 million closed in the coastal Massachusetts region last year, according to The Warren Group, which tracks sales activity.

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By those measuring sticks, Rhode Island offers a value. Oceanfront Ocean State has all the same vistas, easier access for weekend travelers and less-expensive prices for secondary homes, according to real estate professionals.

And gaining more attention in the luxury arena is Providence. Several real estate companies emphasizing luxury properties have expanded their offices, or established a new presence in the capital city. The market there is for primary homes, and some of the newcomers are coming from higher-priced locations, such as Boston, attracted to the amenities of Providence and the strength of their dollar locally.

“We stand out for value, property [by] property,” said Melanie Delman, president of Lila Delman Real Estate International, of the Greater Rhode Island market for luxury properties. “The value here is still much better and the state is becoming more well-known.”

That Rhode Island still isn’t the first place many high-end buyers look for investment is a sign that it remains a hidden gem, according to Benjamin Scungio, an agent with Mott & Chace Sotheby’s International Realty, and its Providence office manager.

“We would see much higher price points if it wasn’t considered a hidden gem anymore,” Scungio said.

In the late 1800s, Rhode Island’s coast was the place to be, when wealthy industrialists built mansions on the oceanfront in Newport. The luxury market is different now, on many levels, according to Delman, whose company had a hand in the six most expensive sales in Rhode Island last year.

For starters, luxury doesn’t necessarily start at $1 million, and it isn’t confined to the oceanfront, she said. For example, Delman’s company expanded over the summer into newly renovated offices in a historical building in downtown Providence.

“Now there is more interest in a variety of areas and a variety of architecture,” she said. “The state has a lot to offer. We’re projecting that quite well with the properties that are being showcased in these areas, whether it is a country property, a city property or an ocean property.”

Providence, with its Colonial-era charm, lively restaurant scene and growing national stature as a great, small city, is on the radar of luxury buyers and real estate companies that represent them.

Mott & Chace Sotheby’s International Realty in January opened a newly renovated, 2,000-square-foot office at 100 Exchange St., on Waterplace Park, and has plans to install 15 to 20 sales associates downtown.

Judith Chace, the company’s co-founder, cited the national exposure that Rhode Island is receiving, for its dining, its arts and culture, even for its governor (Gina M. Raimondo), as part of her thinking on that investment.

The company, which operates three offices on the Rhode Island coast, also found it needed a footprint in Providence to help it sell properties for clients who live in Providence but hold vacation homes on the shore, and wanted a broker that could sell both.

In Providence, the luxury market has no set entry price. The properties considered high-end include homes in the $750s (thousands) up to the $900s. “We really felt that this was a luxury market that wasn’t really being represented,” Chace said.

Lila Delman had some of its greatest growth in sales in Providence, she said, which even her staff found surprising given the amount of activity along the coast.

The company does not disclose internal sales projections, but according to Delman, the Providence office has shown growth and is poised for more. It had the company’s highest growth last year, in terms of number of sales and percentage value, Delman said.

“We see what could be, and what will be,” she said. “We believe in the area and it’s going to keep improving.”

The luxury market for real estate falls into two segments – primary homes and secondary residences – and the needs and desires of buyers are very different for each, according to Sally Lapides, president and CEO of Residential Properties Ltd.

The number of $1 million-plus sales in the Providence market is limited. Just 15 sales were recorded in 2015 exceeding $1 million, she said.

Of the 30 potential sides in representing either buyer or seller in those transactions, Residential Properties was involved in 21, she said.

“They’re buying primary homes. This is no one’s second-home market,” Lapides said.

Of the new expansions and investment in Providence by competing real estate companies, Lapides noted that all in all, the luxury real estate market in the city is a small one, driven by the relationships developed by agents.

Who is the luxury buyer in Providence? It is the executive relocating to the area, or the person who has landed a great job and wants to move up to a more-expensive property. Realtors say they represented some international buyers, who are starting to look at Providence as an investment, and also families and single buyers coming from other states.

Scungio said the two- to three-bedroom, penthouse apartments at the Waterplace condominiums are valued in a range from $500,000 to $1 million.

Providence buyers have included entrepreneurs, doctors, faculty teaching at Rhode Island School of Design and Brown University and even some New England Patriots players.

Downtown penthouses have sold to family of students at Brown, who want a place to stay when they visit.

“The word luxury isn’t defined by money. Somebody may think that buying a two-bedroom or a one-bedroom condo here is luxurious. Somebody may think that spending $20 million is luxurious. When dealing with people in the super high-end, it’s just their lifestyle,” Scungio said. •

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