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Real Estate: Finding hope for a stable market
It’s too early to say whether 2012 marked the year that local real estate prices bottomed out, but agents throughout the North Fork saw hopeful signs of an upward trend in housing sales this year, which they’re hoping will lead to more stability in prices here.
The first quarter of 2012 saw robust growth over the same quarter in 2011, though 2012’s unseasonably warm winter doubtless was more conducive to house-hunting than was the snowbound winter of 2011.
Statistics show the year continued with a strong summer season that lasted until right up to the time Hurricane Sandy hit, according to Suffolk Research Service, Inc., a Hampton Bays firm that tracks East End real estate sales. By the third quarter, the service reported sales in the five towns were up 28.8 percent over the same quarter in 2011, and the median price of homes sold also rose by 10.8 percent.
But as Long Islanders began digging out from under Sandy’s wreckage, local realtors noted that banks that had been nearly ready to close put deals on hold after Sandy and required new appraisals to ensure the houses had retained their value.
“After Sandy, every single deal in contract was on hold and it took forever,” said Prudential Douglas Elliman agent Victoria Germaise, who works out of the firm’s Mattituck office. “Most of the banks aren’t local and the people they sent out didn’t know what they were looking at as far as storm damage. A lot of those deals are finally closing, so we’ll see some sales in the first couple months that were last year’s deals. So, it was even a better year than the numbers are going to indicate.”
“It certainly felt like any deal pending on or near the water needed a full assessment,” said Joseph DeSane, senior managing director of Corcoran Group’s Southold, Shelter Island and Westhampton offices. “The banks were immediately responsive to needing to understand that the property was going to be insurable, there was no damage, and everything was intact. We did see some delays for those reasons.”
Fourth-quarter sales figures were not available by presstime, but real estate agents expect them to refl ect post-Sandy uncertainty in the market.
Town & Country Real Estate also reported strong sales in the third quarter, the most recent period with available data. The company recorded a 100 percent leap in the number of homes sold in Jamesport, a 39 percent rise in Mattituck and a 39 percent jump in Orient. Southold sales volume slumped slightly, from 24 homes sold in the third quarter of 2011 to 21 sold for the same period in 2012.
Ms. Germaise said last year’s heavy sales volume led to a depletion of market inventory, and with fewer houses available for prospective buyers, prices will likely begin to rise. But that might depend on the price range.
She said North Fork buyers in the $300,000 to $400,000 range will likely have difficulty talking down the price.
“Sellers have already seen their asking price diminished 30 percent since they put [their property] on the market,” she said. “Houses in the threes and fours have come down as low as they’re going to come down, and we might see an uptick in price in this range as the season gets into swing.”
Mr. DeSane agreed that the reduced inventory is good for prices.
“There are fewer houses on the market. As supply and demand change, properties go for closer to their asking prices,” he said. “Buyers are still well positioned. It’s a good time to be a buyer. We’re finally starting to see sellers understand where they’re fitting into the market. Before, it was a guessing game.”
Ms. Germaise said many houses in the $500,000 to $700,000 range, particularly those in new housing developments surrounding golf courses, may still be due for price reductions, as the houses were initially marketed to retirees who are now choosing instead to move south.
“Those developments got crushed because of the downturn,” she said. “A lot are just struggling to break ground on new homes, whereas some resales are just sitting there forever. They have to reinvent themselves for younger families.”
This past year also saw a marked improvement in revenue for the Community Preservation Fund, a land preservation program administered by each of the five East End towns and fi nanced by the 2 percent real estate transfer tax. In Southold and Riverhead towns, the first $150,000 of a sale is exempt from the tax, while on the South Fork the fi rst $250,000 is exempt.
As of the beginning of November, Riverhead’s CPF program had brought in $2.03 million, up from $1.62 million in the first 10 months of 2011, a 25.3 percent increase.
Southold Town had taken in $3.44 million, up from $2.9 million in the same period, an 18.6 percent rise.
Shelter Island received $1.05 million, up from $740,000 in the fi rst 10 months of 2011, a whopping 41.9 percent increase.
“CPF revenues are trending higher than last year. Only Southampton Town has collected less money in 2012 than 2011,” said State Assemblyman Fred Thiele, who drafted the state law that created the CPF, in a press release announcing the statistics.
CPF gains are also sometimes an indicator of a strengthening market at the higher end, since the tax is only assessed on the portion of the sales price above the threshold. Since the 2008 economic meltdown, much of the sales activity has been at the low end of the market.
Overall, though, the picture painted of last year by market statistics suggests the market has bottomed out, leaving agents to speculate when and how quickly home values might begin to rise.
“It looks really, really healthy. I would say we’ve definitely seen the bottom,” said Ms. Germaise. “Things are stabilizing. Hopefully that middle ground will come back.”
Mr. DeSane said the offices he manages have been busy so far in January, with strong interest in both sales and the summer rental market.
“We are starting to see prices stabilize and inch up. Nationally, across the board, home values seem to be on the incline. That’s a good sign for us. We’ll have to see how stable home prices are going forward.”