By Michael Pare

Name: Sharon D. Steele

Age: 52

Position: President, Rhode Island Association of Realtors

Background: Steele is the principal of The Sharon Steele Group on Chestnut Street in Providence. Her term as president of the RIAR concludes this coming October.

Education: Lake Erie College and Case Western Reserve University, Cleveland, Ohio. Babson College, Wellesley, Mass.

Residence: Providence

PBN: Your tenure as president of the Rhode Island Association of Realtors has coincided with record-breaking home sales. The economy has been down. Why are home sales so strong?

STEELE: The housing market has really been the stability in everybody's lives. After the September 11 tragedy, people really turned back to what they know and what they trust...what basically feels good to them. And that was housing. People's priorities changed enormously after September 11. People realized that there are very few things you can count on in life. But family and home and friends are really the things that count. The whole focus in people's lives I think changed tremendously.

I have heard of homes being put on the market and bidding wars ensuing, with the seller getting more than the asking price. How common is this these days?

It is still fairly common. There continues to be pent-up demand in the housing market, where the demand continues to outstrip the supply. Particularly in what we call the entry-level housing prices in certain municipalities. In Providence, for instance, it continues to deal with the spillover effect from Massachusetts. The median housing prices in Massachusetts are easily $100,000 more than they are in Rhode Island. With commuting being a whole lot easier than it used to be and more cost-effective...that is having an enormous impact. As long as demand continues to outstrip supply, we're going to be in these bidding war situations.

The climate seems great for an older couple that can sell their home for top dollar, and then go into a much smaller home or condominium. But what about the couple that has just gotten married. Is there such a thing as a starter home anymore?

There are a number of things that we are recommending today for people that are starting out. And that includes condominiums. They are a wonderful alternative to rental stock. You get the same benefit of a mortgage deduction and it allows you to transition from rental housing into the ownership model. That's one alternative. The other one is multi-family housing. You can buy a two or three-family house and live in the second floor or the second and third floor. That's a great way to get started, with a tenant really subsidizing your monthly mortgage.

So you still see property as a viable investment vehicle?

More so than ever, with stock prices really down and out. With all of the problems with the corporate accounting, the Enron and WorldCom scandals...I think people are looking to a more conservative means of investment. Housing is a way to do that. It has been the only bright spot in a rather lackluster economy.

With homes selling so well, people may be tempted to sell on their own and retain the commission that would normally go to the Realtor. Why have a Realtor in the equation?

People - though very few in Rhode Island, I'm happy to say - start off trying to sell a home themselves. And they find that there are some real pitfalls. First, a home is very personal to most people. It is very difficult to take something that is that highly personable and look at it as a business transaction. People end up tripping themselves up. They do a number of things badly. They don't price it well. Either they price it too low or too high. When they price it too low, they jump on the first person who walks through the door. Sometimes they get lucky. But more often than not, that is a person who has not been pre-qualified or pre-approved. They don't have a snowball's chance of figuring out what their finances are. So they get into a transaction, and before you know they are trying to get out of the transaction because the deal simply isn't going to go forward. The other problem today is that most sales are what I call 'environmentally challenged.' Between underground oil tanks, asbestos, and lead paint to name a few. And the new carbon monoxide detector requirement. It really takes a professional to literally walk you through the transaction so that you do not end up in one of those pitfalls. The other thing is that if you have a price that is the wrong price, you are marketing your house to the wrong market. Whether you are pricing it too low or too high, you are doing yourself a disservice. Making those kinds of mistakes more than covers the commission you would be paying to a professional.

At one point can we expect home prices to stabilize? It doesn't seem as though the economy is going to right itself any time soon.

What that means for the housing market is we are going to continue to experience a robust market. David Lereah is the chief economist for our national association. His predictions are that we are going to continue to enjoy a really wonderful housing market through 2002 and probably into 2003. Many things continue to contribute to that. There are the historically low interest rates. It's not looking like Alan Greenspan is going to raise those anytime soon, with the economy being rocky at best. And the stock market continues to be in the throes of a Bear Market. That bodes extremely well for real estate, because it is playing more as an important and consistent investment tool for even average folks, not just high-end investors.

Are people buying land and putting up new homes at the same pace in which existing properties are being sold?

In certain segments of the market, there is no land. The only parts of the market where land is still in play are parts of South County. There is some left in East Greenwich and North Kingstown. But in the Providence or Barrington markets, land is not existent. That plays to the strong appreciation in communities like the East Side of Providence.

Are Barrington, Lincoln, East Greenwich and South Kingstown still the most popular destinations for management-level professionals re-locating to Rhode Island?

That's tied to school scores. Typically, you see Barrington and East Greenwich going neck to neck for school scores. Lincoln is up there, as is Cumberland. You're going to find when you look at the whole school issue that the results are not well understood by most people. In a place like Providence, we have far more non-English speaking kids. And we have far more special needs children. It would be literally impossible here, to come up with the kinds of scores that we see year in and year out in places like Barrington and East Greenwich.

Is, for example, the Providence school system a turn-off to potential buyers?

It isn't. Let's use the East Side of Providence as an example. A lot of those people have already made the decision that they are going to use private schools. They were using private schools where they came from...it is simply an extension of what they have been doing. And in Providence, we have a terrific gifted program. We have some wonderful elementary schools like the Martin Luther King School, and the Vartan Gregorian School.

There has been significant legislative action impacting the real estate community. Bring us up to date to changes in laws regarding carbon monoxide detectors and lead paint. What about the carbon monoxide detectors?

Carbon monoxide detectors are something that has been added to the equation as of January of this year. We were used to the smoke detector certificates. But there have been a couple of near-fatal situations and so the legislation was promulgated by a legislator from North Providence. It's a very good thing. It's a sneaky kind of gas and it's deadly. What is required today is that carbon monoxide detectors be installed on all levels of the house. The good news is that there are now combination-detectors, which combine smoke detectors with carbon monoxide detectors and they're available at most hardware or electrical supply stores. The certificate is given by the fire marshal in most municipalities. The certificate costs a homeowner $30, and it's required before a house can change hands.

And what is the latest on the lead paint front?

Sen. (Thomas) Izzo has prevailed after a couple of tries. One of the fallacies was that we were in fact not in favor of the legislation. Part of the concern in the Realtor organization is that it, like many other pieces of legislation, had been promulgated before there was a funding arm for that legislation. A student at Brown University did a very interesting study. She basically identified the owners of property that had been involved in the lead poisoning of children. It turns out that it is a rather small group of owners who are in fact generating most of the lead cases in the state of Rhode Island. There were a lot of pieces of legislation on the books. Our attitude was that the health department was not in fact enforcing some of the regulations that were already on the books. So we felt, 'why put another piece of legislation in place without the funding or manpower in place to enforce that legislation.' That was a big part of our reluctance to jump on board. This time, we have a number of other groups...all of which provided input to the legislation. We now feel it is as good a bill as could be put together at this time. We are still anxious to see what happens in the funding arm of the legislation. That is going to be critical to enforcement going forward.

Published 7/15/2002