Realtors foresee stable market this summer
Several of Jamestown's real estate firms acknowledge business has been slow the last several months, but say bargainhunting summer vacationers and Jamestown's enduring appeal will help to keep the market stable.
"The market is changing for the better, and I think people are starting to realize the prices are at the bottom, or pretty close to it," said Linda Wallace of Re/ Max. She said about one-fifth of the market is below $500,000 which is unusual for Conanicut Island. A pending sale is worth $200,000, a bargain by Jamestown standards, Wallace said.
Another factor providing incentive for consumers to start house hunting is an $8,000 tax credit for first-time home buyers.
Wallace said the small-town appeal of Jamestown and its island setting make it a continually attractive place to buy a house, and the end of winter also has a short-term effect on the market.
"We are seeing some more activity since the weather started to break," Wallace said.
Wealthy vacationers from Connecticut, New York and Boston see Jamestown prices as a bargain compared to the respective areas in which they live, Wallace said. She added that California vacationers have shared similar opinions.
Regardless of house hunter wealth, Wallace said the economy is the driving factor in the undesirable real estate market conditions. "The appeal of Jamestown will not change," she said. "It is a charming island town of New England and that is not going to change."
Tina McIntyre of Lila Delman said the last several weeks have been significantly more busy than the last several months. When the Press contacted McIntyre, she said she was on her way to show several houses. "I think things are changing as we speak," McIntyre said.
A $3 million property in Jamestown already has some buyers inquiring, and there is a pending sale in Newport of a $7 million house, she said. The tax credits are helping first-time home buyers start hunting, but McIntyre said a story in the New York Times about Jamestown two weeks ago has also boosted interest in the market. The Times' story suggests Jamestown is much quieter than Newport, which is attractive to New York buyers.
"It is a buyer's market, prices have come down," she said. "People are wanting to buy, but they're wondering if they should wait a little longer." She added that many potential buyers are trying to see if prices will go lower.
At a meeting for home buyers hosted by Island Realty at the library last week, Bank Newport Loan Officer Mark Carnevale said real estate action is always slower in the winter months, and the tax credit will help make the spring a healthier season.
"I mean, how often do you see people trying to drop $8,000 in your pocket?" Carnevale said.
Carnevale attributed the slow sales not only to the national economy, but a "ripple effect," when people get nervous when they see their family members losing jobs. People have consequently become more conservative with their money, Carnevale said.
Trevor Campbell, a 30-yearold Narragansett resident who attended the meeting, said the first-time home buyer tax credit is helping him start looking for a house.
"I'm hoping like what Mark [Carnevale] said, the market is at the very bottom," Campbell said. People from all age groups attended the meeting, which focused on the insurance and banking side of the housing market.
"Is this market different? Absolutely," said Ginny Prichett of Island Realty, which hosted the meeting. She said the buyers are being much more particular about houses they chose, and they may want to see almost everything on a company's inventory before making a decision.
Prichett said the market that has diminished the most is the second or third-time home buyers, because the international economic situation has people tightening their financial belts.
"As the economy picks up… and people start to feel better, I think things will start to get better," she said.
Gloria Kurz of Mansions & Manors said they sold five houses this year, and 14 in the same period last year. Kurz said there is an $8,000 tax credit, but very few first-time home buyers venture into Jamestown because it's more expensive. And the buyers who are shopping are particular.
Despite the nation's economic fears, Kurz said buyers are aware that prices have fallen, and will come looking for a bargain. "People will move very, very quickly when they know something is a fair market value," she said.
She pointed out that Jamestown home values have undoubtedly grown over time, but the increases have been fairly small compared to other parts of the country, and steady. House prices in neighborhoods like Greenwich, Conn., have exploded in the past several years.
"That's very hard to sustain over time," Kurz said, whose business has a larger presence in the higher-value homes.
Attractive mortgage interest rates, falling prices, and tax credits have helped the market. Jamestown's appeal is found in its beauty, small geographical size, and sense of community.
"That's a really wonderful formula for maintaining value, no matter what your demographic is," Kurz said.
The realtors observed that the poor selling conditions are also making the buyers more aggressive in negotiating home prices.
"I think it is the nature of the beast," Wallace said. "I think people are going to look for the best value." She added that sellers have often taken prices down, discovering that they started too high.
Kurz said sellers have been sensitive to market conditions, and adjusted their house prices accordingly. "People are more pragmatic and obviously realistic… there is a great sensibility on everyone's part," she said.
Prichett, who started working around the time of Rhode Island's early 1990s credit crisis, said the buyers are still very different than they were in the last major recession.
"There are a lot of investors still out there. I didn't see those investors in the early 1990s," she said, explaining that people will look for bargain vacation homes in Jamestown while the prices are low.
McIntyre said the current local market is similar to the early 1990s market, but the effects are more national.