Buyers Hunt for--and Find--Bargains

Wall Street Journal, June 11, 2010 by Joseph Dobrian, Journal Staff Writer

The message out of New England is, “This is the year to buy.”  Sellers are more motivated, and many are at more realistic levels.  Volume is up from last year in most markets.  At the moment, availability of luxury real estate is quite high in all six states, but brokers warn that prices will go no lower.

“The markets are improving all over, in some areas rapidly, especially along the coastlines,” according to Robert Borden, president of Boston-based LandVest, which covers all of New England.  “In New Hampshire, where the market had been down, we recently had a couple of record-setting sales.  But transactions like that don’t indicate a trend.

“This is still a time to buy, because prices remain attractive.  Some sellers are coming onto the market with high asking prices, thinking that the markets back and their property’s special, but those listings might get cold after a while,” Mr. Borden says.

On Cape Cod, home sales of $1 million-plus are up to 64.5%, from the first five months of 2009, with a few ultra-high-end properties available, says Bert McCarthy, executive vice-president of Kinlin Grover in Osterville, Mass.

“We have a 17-acre mill farm [priced at $12.5 million] on Cape Cod Bay, with a 7,500-square-foot Contemporary home, thatched roof-barn and 300-foot dock and pier,” she says.  “We have a 12-room house on just over an acre [priced at just under $9 million] on Squaw Island off Hyannisport—an island that has maybe 15 homes on it.”

Some of the best investment properties on Cape Cod are on the water, of course, but many of the best buys are away from the water, says Paul Grover, partner at Robert Paul Properties in Osterville, Mass.  The current star of his listings is on Hammetts Cove in Marion, just west of the Cape.

“It’s priced just under $5 million: a waterfront property that would be worthy of Architectural Digest, interiors renovated to perfection, on 16 acres,” he says. “At the far end of the Cape, near Provincetown, we have a house that’s been in the same family for more than 200 years, for only $659,000.”

In Newport, R.I., Melanie Delman president of Lila Delman Real Estate notes that some bargains exist even at the highest end.

“We have three that are especially interesting,” she says.  “Beacon Rock Carriage House [priced at just under $9 million], a McKim, Mead & White structure: a James Bond-like getaway where you drive into a multicar garage and there you are within an elegant residence on the harbor front.  The Fairholme estate [priced at $18 million] epitomizes Newport with gorgeous amenities and waves crashing in front of you; you can watch surfers riding waves in.  A third one is Gray Craig, which sold in 2007 for $15.7 million but is now on the market for just under $10 million representing one of the best opportunities in the luxury market.”

Broker Jim Michalove of Seaboard Properties in Stonington, Conn., says that in southeastern Connecticut and southwestern Rhode Island, the most interesting property currently on the market is in Watch Hill, R.I.: an eight-acre oceanfront estate with a 1917 Tudor-style home designed by John Russell Pope, architect of the Jefferson Memorial and the National Gallery of Art.

“We’re asking $19.5 million,” he says. “An equivalent home in the Hamptons or Nantucket would be significantly pricier.”

“Watch Hill, on the southwestern tip of Rhode Island’s coastline about two and a half hours from NYC, is the first community north of the city that’s on the open ocean and offers beaches with actual surf—as well as grand style turn of century homes in a very picturesque community.”

David Godden, managing partner at Randall Realtors in Westerly, R.I., says sales activity is up in the past six months, but the most expensive homes (over $5 million) aren’t attracting much attention.” “We won’t take very high-end homes unless the seller is really motivated,” he says.  “Some brokers will take a listing at whatever price the seller sets and the property just sits there.  People are buying, but they’re looking for value.  That’s why I expect a very successful year in the $1 million to $3 million range.  The whole Stonington/Watch Hill/Westerly area is seeing a lot of activity now.”

In Maine, Christopher Lynch, president of Portland-based Legacy properties, estimates that prices are up 10% and volume up 20% from the first five months of 2009.  However, he cautions, meaningful numbers won’t show up until the market peaks in the fall.

“One property we’re enthusiastic about,” he says “is Stone Gables, just outside the entrance to Portland Harbor: a 1920s stone house of just under 8,000 square feet, in the English country manor style, for $3,595,000.  Another is York: a classic shingle-style home with a private deepwater dock—very rare in Maine—for $2.85 million.”

In Vermont and New Hampshire, many properties have been repriced for today’s market, according to Wade Treadway, marketing director at Vermont Country Real Estate in Woodstock, Vt.  In New Hampshire, a hot market is Hanover, the remote mountain town that houses Dartmouth University.  In Vermont, bargains are available in the Reading/Cavendish/Weathersfield areas.

“Increase in volume hasn’t been dramatic, but it’s enough to indicate a sustained movement,” he says.  “Some properties are coming onto the market in what I’d call under-market pricing.  I sense an urgency among buyers that was lacking a year ago.” “Vermont has done a great job of marketing itself as a quality of life state, and people come here looking for sustainability: a little house with a garden and maybe some chickens and sheep. ‘Being in control of your life’ is the phrase we hear all the time.”

Wall Street Journal, June 11, 2010 by Joseph Dobrian, Journal Staff Writer