Heading into the spring, realtors are optimistic
A consensus among the local real estate community indicates that the local market is improving, and that the trend is expected to continue in 2013. The upswing in the cycle is credited to factors like historically low interest rates, the end of the presidential election cycle, and the continued appeal of Jamestown as a place to live.
Good weather also plays a role in increased market activity. “Once the sun came out, the phone started ringing,” said Bob Bailey of Lila Delman.
According to Bailey, 2012 provided a good boost in the market for homes priced below $1.5 million. There were 55 houses sold in 2011 and that number increased to 72 last year. The median cost of a house in Jamestown increased from approximately $450,000 to $475,000. Bailey said that some buyers who have been sitting on the fence are coming out now.
“There was a little bit of a surge in sales just before the end of the year,” he said.
Bailey attributes the boost in sales to people locking in tax rates based on the projection that they might increase in the coming year.
According to Bailey, many buyer who are looking for a second home are coming from areas that are within driving distance. Those people tend to be interested in getting a glimpse of the water and the ability to walk to the village. Buyers looking for a primary residence are more interested in square footage, privacy and quality of life. Bailey expects that upward trend to continue this year.
“For anyone who is considering selling, this would be a good time to get all things in order in preparation,” he said.
Ginny Prichett of Island Realty said that there has been an increase in buyer activity in the last year, and it has been particularly noticeable in the last six months.
“When there is a new product on the market, it usually gets a lot of attention unless it is priced in a range where there are not a lot of people looking,” she said.
According to Prichett, realtors are generally excited about the upcoming season. There is a general sense that people are feeling better about their own situations, which is what it takes to create an improving market. While there are always going to be some people who are qualified to move to Jamestown whenever they want to, when people are not feeling good about their financial prospects they tend to put off those decisions.
Prichett said that she has not experienced too many problems with lenders. That can be attributed to the fact that many people who move to Jamestown are not first-time homebuyers. She added that even first-time homebuyers have arrived prequalified to make a purchase.
“I have not found that the lending climate is as difficult as they’re saying it is in some other areas,” Prichett said. “That said, the appraisals must match the value, and from time to time that has been an issue.”
According to Prichett, buyers at Island Realty are looking for a home that is clean, no matter what the price range. Younger buyers are not looking for projects, preferring a finished look. Sometimes a great location will overcome that, but even then the house has to be in good shape. People are willing to do some updating as long as the house is in sound condition overall.
“For the buyer, our job is to be a resource,” Prichett said. “Our whole reason for being is to let people know what’s going on in the marketplace so that they can make educated, informed decisions.”
Gloria Kurz of Mansions & Manors also mentioned the 26 percent increase in the number of houses sold in 2012 compared to 2011. On the other hand, she said that home prices were down a little bit in 2012 from the previous year. In 2012, houses on the island sold for $669,000 on average, while in 2011 the average sale price was $734,000.
Kurz said that year-to-date five properties have been sold in Jamestown. At the same point last year, six had been sold. She attributed this to the fact that inventory is down a little bit, but said that it is starting to ratchet up for the spring market.
“Our average, sales price is up for the first quarter so far,” Kurz said. “That is something that will hopefully continue. Lots of times when you start to see lower inventory you see prices move up a little bit. That’s been happening on a national basis and we’re cautiously optimistic that we’re going to start seeing that in Jamestown as well. The question is whether that will be sustainable for the rest of the year.”
According to Kurz, the pent-up demand is leading to some good activity locally. The financial markets are at record highs, and the interest rates are at historic lows, which is causing people to get into the market. She expects a continued increase in the volume of activity moving forward, and she is hoping that prices begin to tick upwards a little bit.
“One of the things that we’ve seen already this year is some properties that have come on the market and are perceived to be well priced have gone under contract in 48 hours,” said Kurz.
Mark Ferranti of Stearns Farms Real Estate also said that there is more activity, but cited financing issues as an ongoing problem. He said that people need perfect credit in order to qualify in this market. There are also many buyers who are looking for good deals, so while people are calling his office and out looking at properties, no one is pulling the trigger on deals right now.
“It takes a little longer for property to move right now unfortunately,” Ferranti said. “There are deals out there right now.”
Ferranti agreed that the market is improving, but said that the high unemployment rate in Rhode Island continues to be an issue. As an example he cited the recent loss of 200 jobs at MetLife as a factor in the difficult economy. Despite the state’s economic woes, Ferranti said that Jamestown continues to attract attention because of its unique qualities.
“It’s a great community to live in,” Ferranti said. “It’s great for families.”
Ferranti, who has been in the real-estate business since 1989, said that he has seen a number of market cycles during his career. He expects to see increased activity, but while the market is on the upswing, he says progress is slow.
There are 59 single-family homes on the market in Jamestown right now through the multiple listing services. That doesn’t take into account houses that are presently in contract. The average time a house spends on the market is 178 days, although that time can be skewed by a particular house, such as one at Beavertail that was listed for $7.2 million and was on the market for 914 days. At the other end of the spectrum, a house listed for $189,000 was on the market for only three days.