PBN Article: R.I.’s Height of Luxury: Deman Remains High as Volume of High-Priced Home Sales Plateaus

The appetite for luxury homes along the Rhode Island coast doesn’t seem to be waning, as evidenced by two transactions above the $10 million mark in 2019. But with the number of high-end sales plateauing in recent years, the question arises: Has the volume of Rhode Island’s luxury market reached its peak?

For nearly a decade, annual sales of homes with a price of $1 million or more soared from a low of 85 in 2009 – in the midst of the Great Recession – to a record-setting 276 in 2018. Yet, for the past three years, the number of luxury transactions has leveled off, with 272 sales in 2017, 276 in 2018 and 274 in 2019, according to data provided by the Rhode Island Association of Realtors.

While a tight supply of high-priced homes may be dampening total sales in some areas, the state’s real estate agents insist Rhode Island’s luxury market still has room to grow.

“In speaking with luxury specialists, the consensus is that there is no expectation of this market subsiding,” said Shannon Buss, president of the Rhode Island Association of Realtors and a broker associate at Randall Realtors. “I spoke with an agent in Newport who is a luxury specialist. He said that homes of significance are consistently entering the market. There is not a concern at this time that inventory will cap.”

In particular, homes with water views continue to be hot commodities and are being priced as such.

Case in point: The Sea Grace estate on Ocean Road in Narragansett, which went on the market in January. The gated, 2-acre waterfront property features a 12,000-square-foot home with six bedrooms and seven baths, a 36-foot infinity pool and lawn that sweeps down to a rocky shoreline. Asking price: $19 million.

“The majority of luxury homebuyers in Rhode Island are looking for some kind of water amenity,” Buss said. “Properties without ocean views or frontage have experienced longer days on market than those offering coastal amenities.”

Cynthia Moretti, a broker at Lila Delman Real Estate in ­Newport, who represented the buyer of a $5 million property on East Shore Road in Jamestown, acknowledged a “supply-demand imbalance” for waterfront single-family homes. She says it’s caused in part because the wealthy are getting a bigger bang for their buck when buying vacation homes in the Ocean State compared with coastal locations in Massachusetts and Long Island, N.Y.

“I’m anticipating an increase in the sale of our waterfront properties for premium prices,” she said. “People want to live on the shoreline, and they love new construction. Demand is driving the price of properties up and buyers are scooping up coastline lots, or buying property, and rebuilding because turnkey inventory is limited.”

Despite demand for luxury homes, matters beyond Rhode Island’s borders, as well as in the state, could throw a bit of uncertainty into the mix.

“Global economic events, domestic policies and local ­economic conditions have their effect on the rise or fall of the luxury housing market,” Moretti said. “It’s difficult to know for certain, especially in our current environment, but I remain optimistic that we will see a continued demand for luxury properties, specifically those that are turnkey.”

Despite a slight decline in the number of luxury sales, the demand translated into two mammoth transactions in 2019, both oceanfront homes selling for more than $10 million.

A Bluff Avenue estate near pop singer Taylor Swift’s home in the Watch Hill section of Westerly sold for $17.6 million, while a billionaire tech mogul purchased a mansion on Newport’s storied Bellevue Avenue for $11 million. They ranked first and second on the list of top 10 home sales for the year.

By comparison, the most-pricey home transaction in 2018 was the $9 million purchase by Judy Sheindlin, of “Judge Judy” fame, of a Newport estate called The Birdhouse.

The $17.6 million Bluff Avenue sale last year was believed to be the second-highest-priced residential sale in Rhode Island history, eclipsed only by the $17.75 million Swift paid for her oceanfront mansion a short distance away on the same street in 2013.

Lori Joyal, a broker at Lila Delman and the agent for the seller of the Watch Hill property, said she has “seen an uptick in Rhode Island’s luxury market, as savvy buyers identified great value in waterfront properties when compared [with] markets such as Cape Cod and [Martha’s Vineyard and Nantucket] or the Hamptons [on Long Island].

“The historic sale of 10 Bluff Ave. is a testament to today’s luxury buyer’s appreciation for turnkey properties and the premium associated with this convenience,” Joyal said.

Still, real estate agents acknowledge that move-in-ready inventory at the highest end of the market along the coast is scarce right now.

“A house like this [at 10 Bluff Ave.], with such spectacular beachfront acreage, comes along very infrequently in Watch Hill,” said Donna Simmons, the agent for the buyers and a broker at Mott & Chace Sotheby’s International Realty.

The second-highest sale for 2019 was the purchase of Seacliff mansion in Newport, by tech mogul Larry Ellison for $11 million. Ellison is amassing a collection of Newport mansions. His purchase marks the fourth property in his portfolio on Bellevue Avenue.

The next-highest sale was $8 million for a shoreline property at 609 Beavertail Road in Jamestown. The 7-acre, 8,534-square-foot estate is located on an oceanfront cliff. Mott & Chace represented both sides of the sale.

Judy Chace, the listing agent, said the home “is an architecturally stunning contemporary with dramatic Newport Harbor views and a guest house in perfect condition. The buyer wanted an easy-living, oceanfront family estate that was beautifully designed and move-ready.”

Erin Marsh, the broker who represented the buyer, echoed Chace’s sentiments.

“The coastal luxury/second-home market continues to be strong in Rhode Island, with beautiful, sandy beaches and quaint seaside towns – real estate is viewed as reasonable considering the lifestyle the state offers,” Marsh said.

TOP TEN REAL ESTATE SALES 2019

1.  10 Bluff Ave. | Westerly
PRICE: $17,600,000
DATE SOLD: Nov. 1, 2019
BUYERS: Paul Cappuccio and Matt Shea
SELLER: Kevin Wendle
BROKER: Mott & Chace Sotheby’s International Realty (buyer); Lila Delman Real Estate (seller)
YEAR BUILT: 1903
BATHROOMS: 8 full, 1 half
BEDROOMS: 9
LIVING SPACE: 10,000 square feet
PREVIOUS PRICE: Originally listed for $18,900,000 in May 2019.

2. Sea Cliff | 562 Bellevue Ave. | Newport
PRICE: $11,000,000
DATE SOLD: Jan. 31, 2019
BUYER: Larry Ellison
SELLER: Peter Madden
BROKER: N/A
YEAR BUILT: N/A
BATHROOMS: 4 full, 2 half
BEDROOMS: 5
LIVING SPACE: N/A
PREVIOUS PRICE: Last assessed at $6,800,000 in 2018.

3. 609 Beavertail Road | Jamestown
PRICE: $8,000,000
DATE SOLD: June 21, 2019
BUYER: Barclays Trust
SELLER: Nelson Northern Properties LLC
BROKER: Mott & Chace Sotheby’s International Realty (buyer and seller)
YEAR BUILT: 1996
BATHROOMS: 5 full, 3 half
BEDROOMS: 5
LIVING SPACE: 8,534 square feet
PREVIOUS PRICE: Originally listed for $8,975,000 in June 2018.

4. 146 Brenton Road | Newport
PRICE: $7,300,000
DATE: Jan. 22, 2019
BUYER: Pumo LLC
SELLER: Anthony W. Ruggiero
BROKER: Gustave White Sotheby’s International Realty (buyer); William Raveis Chapman Enstone (seller)
YEAR BUILT: 1987
BATHROOMS: 6 full, 3 half
BEDROOMS: 5
LIVING SPACE: 6,357 square feet
PREVIOUS PRICE: Originally listed for $7,950,000 in September 2018.

5. 850 East Shore Road | Jamestown
PRICE: $6,325,000
DATE SOLD: April 22, 2019
BUYERS: Barbara R. Kirk, Karl D. Kirk Jr. and Katherine R. Kirk
SELLERS: Mary G. Long and Ronald E. Long
BROKER: Mott & Chace Sotheby’s International Realty (buyer and seller)
YEAR BUILT: 1680
BATHROOMS: 2 full, 1 half
BEDROOMS: 5
LIVING SPACE: 4,188 square feet
PREVIOUS PRICE: Originally listed for $6,850,000 in June 2018.

6. 229 Ruggles Ave. | Newport
PRICE: $6,200,000
DATE SOLD: Sept. 30, 2019
BUYER: Midcliff LLC
SELLER: R&D Trust
BROKER: Lila Delman Real Estate (buyer and seller)
YEAR BUILT: 1886
BATHROOMS: 10 full, 1 half
BEDROOMS: 12
LIVING SPACE: 13,748 square feet
PREVIOUS PRICE: Originally listed for $7,700,000 in May 2019.

7. 35-36 Beach Drive | Little Compton
PRICE: $5,075,000
DATE SOLD: May 29, 2019
BUYER: Christopher and Julie Darnell
SELLER: Donald F. and Eleanor B. O’Neill
BROKER: Keller Williams Realty Group (buyer); Mott & Chace Sotheby’s International Realty (seller)
YEAR BUILT: 1987
BATHROOMS: 4 full, 1 half
BEDROOMS: 4
LIVING SPACE: 4,178 square feet
PREVIOUS PRICE: Originally listed for $5,075,000. Date N/A.

8. 238 East Shore Road | Jamestown
PRICE: $5,000,000
DATE SOLD: May 31, 2019
BUYER: Seaspray LLC
SELLER: Jamestown Cottages Co. LLC
BROKER: Lila Delman Real Estate (buyer and seller)
YEAR BUILT: 2018
BATHROOMS: 3 full, 1 half
BEDROOMS: 4
LIVING SPACE: 3,540 square feet
PREVIOUS PRICE: Originally listed for $5,750,000 in July 2018.

9. 66 Williams St. | East Side of Providence
PRICE: $4,600,000
DATE SOLD: Dec. 18, 2019
BUYER: Lorne A. Adrain
SELLER: Jocelin Hamblett
BROKER: CrossRoads Real Estate Group (buyer); Mott & Chace Sotheby’s International Realty (seller)
YEAR BUILT: 1810
BATHROOMS: 5 full, 4 half
BEDROOMS: 6
LIVING SPACE: 11,790 square feet
PREVIOUS PRICE: Originally listed for $5,500,000 in February 2019.

10. 40 Newton Ave. | Narragansett
PRICE: $4,500,000
DATE SOLD: April 15, 2019
BUYER: Michael J. Gretz
SELLER: Guy Lancellotti III
BROKER: Island Realty (buyer); Lila Delman Real Estate (seller)
YEAR BUILT: 1884
BATHROOMS: 7 full, 1 half
BEDROOMS: 5
LIVING SPACE: 8,882 square feet
PREVIOUS PRICE: Originally listed for $6,495,000 in August 2017.

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