An online auction for the Wrentham House, on Ocean Drive in Newport, has been halted because an offer was made and accepted.

The Providence Journal / John Freidah

As Rhode Island’s high-end real-estate market lingers in the doldrums, some sellers are considering auctions as a way to generate the buzz that could lead to a sale of their property.

The Clarmar estate, a 20-room mansion in the posh Watch Hill section of Westerly, has an upcoming date with the auction block.

Most recently listed for sale for $16.3 million, the property will be auctioned on the premises, 16 Yosemite Valley Rd., on July 31 at 11 a.m.

The Clarmar mansion, built in 1931, has been on the market since at least 2005, when it was priced at $17.7 million. In 2007, Clarmar was listed at $18.95 million.

Lila Delman Real Estate recently began offering an online auction service to clients, according to principal broker John Hodnett. Lila Delman, which has offices in Jamestown, Newport, Narragansett, and Watch Hill, specializes in the luxury market.

Wrentham House, an 1891 stone and shingle mansion designed by Richard Morris Hunt on Ocean Avenue in Newport, was the first property offered through an online auction by Lila Delman. Online bidding began July 6, and a minimum, “opening” bid of $6.5 million was established.

Wrentham House was originally listed for sale for $14 million, and like Clarmar, it has also been on the market for at least four years.

Hodnett said the online auction of Wrentham House has been suspended because an offer was made and accepted, and it is “under contract” to be sold.

According to The Warren Group of Boston, the number of residences sold in Rhode Island at prices of $1 million and above has continued to sink in 2009. Just 20 such sales occurred between January and May of this year, compared with 68 sales during the same period in 2008.

“We’ve been so busy, but nobody’s buying anything,” said Judy Chace of Residential Properties Ltd. Chace mainly sells high-end properties on Rhode Island’s southern coast.

“Our inventory here in Jamestown is just climbing daily,” said Bob Bailey, an agent with Jamestown’s Island Realty. “It’s definitely a buyer’s market.”

Hodnett said an auction “is often not the first choice of the seller,” but it can work “for select properties” owned by clients “who want properties moved [sold] within 60 days.”

“You have to create some excitement,” Hodnett said. “We’d recommend it for someone who is really on a tight deadline.”

In June 2007, a Connecticut couple, Michael and Diane McLean, were the high bidders at an auction for another Watch Hill mansion, Treasure Hill, sold by Louis A. Gencarelli Sr., the owner of the defunct Bess Eaton coffee-shop chain.

Treasure Hill had an assessed value of close to $7 million, but it had been on the market for more than three years. Although the McLeans’ high bid was $4.5 million, Westerly tax records indicate that the property was sold for $5.5 million in August 2007 to Diane McLean. The original asking price for Treasure Hill was $7.75 million.

Neither Wrentham House nor Clarmar has been offered at “absolute” auction, the term for an auction in which properties are sold on the spot to the highest bidder.

In the more common “reserve” auctions, no sale takes place unless a bidder meets a secret “reserve” price set in advance.

At the Clarmar auction, the owner will retain the option to accept or reject the highest bid, according to a spokesman for the auctioneer, the J.P. King Auction Company Inc., of Alabama.

One of the rare “absolute” auctions of high-end real estate in Rhode Island occurred in September 2006 in Jamestown. A 15.46-acre parcel on Beavertail Road was auctioned for $1,012,000. Before the auction, the listed price for the land was $1.2 million.

“It’s very rare that a seller will do an absolute,” Bailey said. But he added that a number of his clients have considered the auction option.

“If they have significant liens” on the property, he said, “it’s not a good idea.” But “if there’s not a lot of liens and the seller is willing to take a slight risk on it, the absolute auction generates a lot of interest.”

Although foreclosure auctions are rampant, optional high-end auction sales in Rhode Island seem to be limited to the state’s coastal, second-home communities.

Realtor C.C. Wall of Residential Properties Ltd., who works mainly in the East Side of Providence, said she can’t think of one instance of a high-end home in the East Side being sold voluntarily at auction, even though high-end inventory is climbing in the East Side.

“If the banks were smarter,” Bailey said, “they’d get together” and hold auctions instead of putting buyers and sellers through the often “painful” and drawn-out short-sale process.

Auctions “are a real transparent transaction,” said Craig King, president and CEO of the J.P. King Auction Company. They “bring together the most interested and qualified buyers.”

Chace said she hasn’t personally been involved in auctions, “but I’m very curious about them.”

She said her main concern would be holding an auction in such a way that it doesn’t appear to be “a fire sale.”

At the same time, Hodnett said, auction sellers, like all sellers in the current market, have to be “realistic” about the price they are willing to accept.

“Auctions don’t have pixie dust, to all of a sudden create value where value doesn’t exist,” he said.

cdunn@projo.com