2014-12-31 / News

14 fewer homes sold in 2014 compared to last year

By Ken Shane

Although there weren’t as many homes sold in 2014 compared to 2013, there were more big purchases, including 139 Beavertail Road, which sold for $2.72 million. 
Photo courtesy of Island Realty Although there weren’t as many homes sold in 2014 compared to 2013, there were more big purchases, including 139 Beavertail Road, which sold for $2.72 million. Photo courtesy of Island Realty Despite a decline in the number of homes sold in 2014, the local real-estate market remains robust, according to local realtors.

There were 66 homes sold on the island in 2014, a decline of 18 percent compared to last year, when 80 homes were sold. On a positive note, Gloria Kurz of Mansions & Manors said the average selling price was $721,642, which is slightly higher than in 2013.

According to Kurz, 40 of the homes sold for below $500,000, with half selling between $300,000 and $400,000. (There were no sales in 2014 between $100,000 and $200,000; there had been two in 2013.) Homes sold for more than $1 million increased from 10 to 12. They accounted for a larger percentage of overall sales this year, representing 18 percent in 2014 compared to 12 percent in 2013. Kurz said it’s an encouraging sign because the higher price segment had been “pretty quiet for a few years.”

“It’s great to see it showing some signs of a comeback,” she said.

Bob Bailey of Lila Delman Real Estate also noted the decline in the number of homes sold, and said the median sale price had dropped by 10 percent to $425,000. The price has declined for three straight years, he said, while the average sale price has increased over that time. Bailey mentioned lack of inventory in the desirable neighborhoods, defining them as “walkability” areas just to the north and south of Narragansett Avenue.

Kurz chalked up the slight decline in sales to a combination of factors, including 2014 being an election year. In her 27 years of experience, she says elections can have a chilling effect on the market because of the uncertainty prior to Election Day. She also cited tighter credit restrictions and a limited inventory.

Despite the overall statistical decline, Carol Hopkins of Island Realty described 2014 as a “great year,” with sales increasing 50 percent, along with a 10 percent decline in rentals. Hopkins credits capital investments as a major factor in her company’s growth. She said an improving economy is also making people more comfortable when it comes to making large purchases.

“Properties that are priced according to the sales in the last six to 12 months are generally selling,” Hopkins said. “If they’re overpriced, they’re not. Consumers have a lot of information on the Internet that they didn’t have before.”

All three realtors agreed the majority of their customers are coming from other parts of Rhode Island, and even other homes in Jamestown. As for out-of-state business, the realtors cited prospective buyers from Massachusetts, Connecticut, New York and New Jersey.

Having a home in tip-top shape is proving to be more important, Hopkins said. Changes to the inspection process allow prospective buyers to withdraw their offers without providing a reason. As a result, Hopkins advises sellers to be sure that their home is in optimum condition before listing it for sale. Also, with a recovering economy, banks are willing to loan homeowners money for inspections, so she says sellers should take advantage of the available cash.

When in comes to Jamestown in particular, Kurz said buyers are primarily looking for the lifestyle and sense of community. She acknowledged that if people aren’t concerned with becoming part of the community, they can probably get more for their money elsewhere, especially with Jamestown’s older housing inventory. On average, Kurz said, anyone wanting to live in Jamestown should be willing to compromise on the “bells and whistles” they may get in other areas.

“They also have to be prepared for some renovations,” she said.

With an aging population, according to Bailey, there is a demand for first-floor master bedrooms or one-level living. As a result, there has been an uptick in condominium sales, which also reflects the increased demand for a home within 1 mile of Narragansett Avenue.

Another factor is climate change, the realtors say. Sea-level rise and its expected impact on the coast has become a concern. Kurz said there is heightened awareness from her customers about living on the waterfront, particularly if the mortgage lender requires flood insurance. Even with the perceived risk, however, she says waterfront property is still coveted.

“The allure of living on the water is very strong and a lot of homes are well sited,” she said. “I don’t expect interest in waterfront properties to change dramatically.”

According to Bailey, there was some concern about flood insurance during the first two quarters of 2014. He said Jamestown does not have an abundance of proper- ties that fall into the flood plain, with houses on rocky bluffs near Beavertail or newer ones that were built further back from the shoreline because of state regulations.

“It did cause concern enough for buyers to sit back and wait to see what Congress was going to do with flood insurance policy,” Bailey said. “In the second two quarters we saw better sales of waterfront properties than in the first two quarters.”

Hopkins has noticed over the last 14 years that what customers see on the plat map is not necessarily what they’re buying. As a result, her office is suggesting surveys be completed. Rhode Island is a metes and bounds state, with no survey required. Hopkins, however, has seen several instances in which properties were smaller than what was indicated on the deed description because formerly dry land is now under water.

Another question often posed to local realtors is whether Jamestown has become beyond the reach for all but the wealthy. Is there still opportunity for the middle class to live on the island?

Bailey said there is, and that he would like to see the council act to create denser zoning areas that would allow for more condominium and townhouses. According to the new inclusionary zoning act, he said, such development would require more low- to moderateincome housing.

Kurz agreed. While Jamestown has always commanded a premium price, Kurz said this year’s sales figures indicate that there is still an opportunity to buy at affordable prices. Buyers, however, may not get as many amenities for their money as they may get in other towns.

Hopkins echoed Kurz’s thoughts. She said there are still houses available in the $250,000- to-$300,000 range, most of them in the Jamestown Shores. They’re not big houses, but agreed with Kurz that people are investing in their lifestyle by moving to Jamestown.

“To some people it’s worth it,” Hopkins said. “Other people need four bedrooms, two-and-a-half baths with a two-car garage.”

Bailey expects 2015 to be a little bit better than 2014, with a small rise in prices and purchasing power as a result of the rebounding stock market.

“We might see more second home buyers as well as people who are analyzing their income and expenses,” Bailey said. “We might see an influx of people from communities within the state relocating to Jamestown considering that we’re the third best tax structure within Rhode Island.”

Interest rates will be the key to a successful 2015 if they stay where they are, according to Hopkins. People will have the opportunity to put cash back into their houses before listing them for sale, which should make the market more competitive.

Kurz expects to benefit from a national trend that points to a stronger real-estate market in 2015. She cited increased momentum in the fourth quarter, post elections, that should carry over to next year. Concern over the rise in historically low interest rates, which may take place between in the next two years, will provide an incentive for buyers who have been on the fence, she said.

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