The Providence Journal, April 30, 2006  Christine Dunn, Journal Staff Writer

The Providence Journal,  April 30, 2006

By Christine Dunn, Journal Staff Writer

There were 5,308 single family houses on the market in Rhode Island last month, up from 3,200 in March 2005 and 2,283 in March 2004.  For buyers, that means more choice.

Because inventory is up, and properties are staying on the market longer, buyers also have more time to shop around and ensure they get value for their money.  That includes buyers in the luxury market--houses priced at $1 million and above.

Things are different in the extreme high end of the Rhode Island real estate market, where prices are stratospheric and the clientele is international.  For buyers of properties--vacation homes, often--that cost $5 million and up, there is a degree of insulation from cycles in the economy.

Realtors say selling them is taking longer, but houses in the $1 million -to-$5 million range still moving, if they are priced reasonably.

"There is still a tremendous amount of money out there in the high end and ultra high end," said John Hodnett, a broker with Lila Delman Real Estate.  "If you have a special property priced correctly, you'll have a bidding war.  If you're hitting the market with a property priced a little higher than it should be, the buyers are sitting in their easy chairs, and they're waiting.  They're waiting for the motivated sellers."

Hodnett said there were four bidders in the recent sale of a lot off Bellevue Avenue in Newport where the land was priced at $1.6 million.  Had the price been set at more than $2 million, Hodnett said, it may have languished on the market for months, and then ultimately been sold at the lower price.

"The seller said, 'I want to be realistic and reasonable,' and boom, it sold in a week," Hodnett said.  "And it works all around for everyone."

According to the Rhode Island Association of Realtors...The most expensive home for sale in Rhode Island is at 75 Gray Craig Road in Middletown, and the asking price is $19 million.  Delman has the listing, which Hodnett described as "museum quality."  Built in 1924, the mansion has 33 rooms and 24,664 square feet of living space, including 12 bedrooms, 9 full baths and 3 half baths, on 6 acres near Second Beach...Hodnett acknowledged the pricing on ultra-high-end properties can seem arbitrary to the casual observer.

"At the ultra high end, the ultimate value is really extremely fluid," he said.  Because the properties are so unique, "it's almost impossible to comp these out to an exact dollar value."

For that reason, "the justifiable range of sale can be wide in these properties," Hodnett said, and depends on "the needs and wants of the seller at the time...There is a lot more play" in pricing and negotiations in the ultra high end, Hodnett said, although "you can't be silly."  The broker's job then, as always, is to bring about a meeting of the minds, he said.

"At $19 million, or $15 million, or $22 million, or $13 million...someone is going to come in and take a look," Hodnett said.  That someone is often not American, and is often in the market for a vacation home, he said.  For these few buyers, Hodnett said, price is not a factor, "as long as it's not ridiculous."

In the $2-million -to -$5 million price range, Hodnett said, "you're not dealing with international jetsetters."   Most of the buyers are from the Northeast, and "they're sharpening their pencils..."

The tables may have turned for sellers, but most will still make a handsome profit on their luxury properties, brokers report.  "Value doesn't mean a fire sale," Hodnett said.