Condo Market Remains Sluggish Compared to Single Family Homes

The condominium market in Newport remains sluggish as the low six figure single-family home market here continues to rebound.

Newport area real estate experts said the condo market has been slower to rebound in recent weeks with the amenities offered in a condo complex being one of the things that sways potential buyers. The experts said the slower recovery for the market remains part of the general real estate trend on the island.

"That always picks up after single family," said Vincent Marcello of Bellevue Realty.

Marcello cited figures from the Rhode Island Multiple Listing Service, which show that there have been 86 condos sold to date this year with the average sale price of $361,000. This compares to 88 condos sold during the same time in 2007 with the average sale price of $360,000.

Connor Dowd, a broker with Keller Williams in Newport, said the slowness of the island's condo market is attributed to several factors. He said a boom of condo building is partially to blame, along with a slower turnover of condo owners in recent years. In addition, he said there are less short sales within the condo market as compared to the single-family market, which has helped fuel the growth in the low six-figure market.

Dowd said that while there has been demand for condos in the market, it is within a segment of the buying population.

Many of the condos are being sold primarily as vacation homes, along with some as permanent residences. Real estate experts on the island said the buyers for vacation condos are typically looking for an entry into the Newport area market with less maintenance issues than single-family homes.

Unlike certain resort locales, Newport area condos do not serve primarily as investment properties with the option to rent them out. Melanie Delman, a broker with Lila Delman Real Estate on the island, said the Newport city ordinance prohibiting rentals from being shorter than 30 days makes it tough to rent out condos.

She said while buyers look at items like gyms and pools, the top amenity for condo buyers includes a private dock space for a yacht. This is in addition to a primarily turn-key condo with minimal work needed.

Delman said many of the condos located in smaller mansion-type homes remain in demand.

"A lot of these condos are in historic houses that make it more attractive to someone who can't have a whole estate," she said.