Water Water Everywhere: Salt Water front in Rhode Island

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As the threshold of the 2007 hurricane season is before us, the allure of waterfront property remains unchallenged. As with diamonds, automobiles, and art, waterfront real estate comes in a variety of size, quality, and features. In the Ocean State, salt water front is the finest, most valuable waterfront. What is most intriguing is the breath of value of salt waterfront. Moreover, the least expensive salt waterfront among the states from Maine to Virginia is here in Rhode Island. The stats are fascinating and also reflect the difference in value between ocean front and bay front.

We studied MLS closed sales of single family properties from January 1, 2006 until May 28; 2007.Waterfront varies direct with the ‘quality’ of the water:

Town/City: ........# Sales...........Range.............. Median Price......... Cost/Sq ft.

Warwick.................34.......... 159.9-1500.k .......488k....................... $290
East Providence ......14........... 247.-860.k.......... 433k.................... $306
Cranston.................. 4 ..........575-875 k.............. 702k................... $357
Warren.................... 5.......... 305-2,440.k.......... 1,123k................... $437
N. Kingstown......... 34........... 430-2,200.k ........1,037k ...................$442
Barrington............. 10 ..........330-2,700k...........1,189k ...................$449
Bristol .....................9..........275-3,275k.............1,051k ..................$470
Tiverton................ 11...........408-4,400k ............1,331k.................. $495
Portsmouth............21............280-5,800k........... 1,254k .................$533
Newport.................. 3...........1,295-17,150k........ 7,115k .................$540
Little Compton......... 1............. 2,800k..................2,800k................$636
South Kingstown.....12..............622-1,145k ..........1,734k.................$659
Narragansett ..........16 .............465-2,415k ..........1,117k..................$681
Jamestown............... 8...........1,460-2,975k.......... 2,182k.................$812
Charlestown............15............. 625-4,350k............1,952k...............$1016
Westerly ................10............ 600-6,800k............3,408k...............$1255

Information is from the STATEWIDE MLS and is deemed reliable but not guaranteed.

Numbers are numbers and statistics are statistics. The question is what do they tell us?

First waterfront is limited with a high demand.
Second, ocean front waterfront is more valuable than bay front.
Third the range of sales price is from $159,900 in Warwick to $17,500,000 in Newport.
What is fascinating is the range of value on a cost per square foot basis from $290 in Warwick to $1,255 in Westerly. The sample may in fact be somewhat small for absolute conclusions, but generally, Rhode Island is the best value for Salt Waterfront in the Northeast and Warwick is the best value in Rhode Island. So if you are looking for waterfront for less than a million dollars, Rhode Island is THE option. Sometimes the best opportunities are right in your own neighborhood. Celebrate the gift of waterfront in the State. And if so inclined, purchase waterfront.

If you do purchase waterfront, complete your due diligence. Obviously, with all real estate you need to have contingencies for building inspection, financing and clear title.
With waterfront you should also check on the availability/cost of insurance, particularly flood insurance, any building violations, particularly with the Coastal Resources Council, and waterfront features, particularly the seawall. If you are buying waterfront, make sure to look at comparable sales. While list prices are informative, closed sales are true comparables. Make certain to look at the closed sales and acknowledge the difference from one community to another. As with all real estate purchases, having representation is not a luxury, it is a necessity. If you are looking to sell, price reasonably. Price is the single most influential element in this market.

Celebrate the Ocean State and enjoy owning waterfront!

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Do sellers need to rein in expectations?

Claudette Farrell, a visiting nurse who lives in Garden Hills in Cranston, has been a buyer and seller in Rhode Island’s real estate market in recent months. So far, neither experience has been a lot of fun — but buying has been easier than selling.
In November, Farrell bought a two-family house in Pawtuxet Village for $319,000. She plans to live in one unit, and her daughter, Kelly, an interior designer, will live in the other. But she won’t move in until her Cranston house, now on the market for $297,000, is sold. Farrell has been trying to sell on her own since November, and only now is considering hiring a real estate agent if she doesn’t have a purchase-and-sales agreement by July. She has tenants in the Pawtuxet house, so she isn’t financially pinched, but she’s starting to get “antsy” about the Cranston sale.
“You can’t just willy nilly set a price wherever you want,” Farrell said. “I feel like I’m in the ballpark. Although prices have come down a little bit, I think they’re leveling out.”
Farrell said she paid the asking price for the Pawtuxet two-family, but only after her first offer, for $305,000, was accepted in a verbal agreement. The seller, who was also working without an agent, delayed signing a purchase-and-sales agreement, and then, on the day an agreement was to be signed, told Farrell that she had a better offer — $311,000. After taking some time to think, Farrell and her daughter decided they liked the house enough to offer full price. “I was so upset. … It wasn’t right,” Farrell said. “[But] my daughter and I already had our heart set on this little house. … I was not happy, but I was OK.”
That kind of scenario was more common back in 2004 and 2005, at the height of the seller’s market and a five-year price boom. But last year brought a 14-percent decrease in the number of existing single-family house sales in Rhode Island, and a slight [0.14 percent] dip in the median sales price.
Today, the real estate market in Rhode Island is showing signs of stabilization: the first-quarter 2007 median sales price for existing single-family houses dropped 2.86 percent, but the number of sales, compared to last year, was up 1.25 percent.
Real estate agents report that most buyers in Rhode Island are educated about the market, and are quick to walk away from deals if sellers are not realistic about price and other terms.
“The Internet really plays a huge part in all this,” said Allen B. Gammons Jr., president of Prudential Gammons Realty Inc. in East Greenwich. Gammons said that more than 77 percent of people who make an appointment to see a house have already seen it online — along with many other houses in the same price range. This gives buyers a sense of the market, Gammons said, and they are not shy about communicating their opinions if they believe a property is overpriced.
And “there are still a lot of houses that are overpriced,” Gammons said. “Properties that are priced to the market are moving.”
Gammons said that ever since the market changed last year, “it’s really been a challenge” to “rein in” the price expectations of sellers. It doesn’t help the situation that “houses are overassessed across the board in several towns,” which supports sellers’ unrealistic expectations, he said.
Gammons said some fault also lies with “real estate professionals who are buying listings by telling people their houses are worth more than they are.”
Ron Phipps, president of Phipps Realty, of Warwick, said he continues to refuse listings if he believes the sellers are stubbornly refusing to acknowledge market realities. “I can’t tell you how many more listings I’ve said ‘No, thank you,’ to this first quarter,” he said.
Phipps said in these cases, when “the seller is inordinately exuberant about their price,” he’d rather let the seller list with another agent, learn through experience that their price is too high, and then get the relisting, “and be the one who sells the house.”
To the degree the market is recovering, Phipps said, it is because “finally, the sellers are acknowledging what the buyers know.”
“Throughout much of the winter, many sellers were still under the nostalgic impression that we were still in 2004 and 2005,” Phipps added. Not only were deals hard to put together — they were hard to keep together, Phipps said. Inspection issues often ended agreements, because both sides already believed they had yielded too much during the initial negotiations. Many buyers “just walked away” if sellers refused to deal with problems that surfaced during an inspection. In a cooled market, “buyer’s remorse tends to be a more virulent strain,” he said.
Christine Dunn, Providence Journal

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