Real Estate: A peek at the Shelter Island market

10/20/2014 10:00 AM |
Real estate agents say that while Community Preservation Fund revenues indicate the market has slowed on Shelter Island in 2014, they believe a number of pending transactions will show an improved market in the fourth quarter. (Credit: Grant Parpan)

Real estate agents say that while Community Preservation Fund revenues indicate the market has slowed on Shelter Island in 2014, they believe a number of pending transactions will show an improved market in the fourth quarter. (Credit: Grant Parpan)

Real estate sales continue to lag despite the appearance of market recoveries on both the North and South forks, but Shelter Island may still be the hidden jewel in the East End’s crown for some house hunters.

There are, however, finally signs that this year’s property sales could, by the end of 2014, surpass last year’s numbers on the island. Community Preservation Funds — a 2 percent fee buyers pay to acquire property on Shelter Island — still lag behind 2013 revenue. But there has been significant movement in the past two months. 

Just-released numbers on Community Preservation Fund revenues for East End towns show Shelter Island continues to be the only municipality where contributions are lagging behind last year’s figures, according to Assemblyman Fred Thiele Jr. (I-Sag Harbor).

On the plus side, Shelter Island’s numbers are creeping up. The numbers Mr. Thiele released for the first six months of 2014 had Shelter Island down by 5.2 percent from the CPF revenues it garnered last year. New numbers show it’s down by 0.7 percent from CPF receipts for the first eight months of 2013.

The Town of Shelter Island took in $1.48 million in the first eight months of 2014 compared to $1.49 million in 2013.

Overall on the East End, CPF revenues are up by 9.6 percent for the first eight months of this year compared to 2013.

As it entering this year’s fourth quarter, many Shelter Island real estate professionals say deals are in the pipeline and expected to close by year’s end.

But Melina Wein of M. Wein Realty Inc. is more cautious.

“I don’t see a big flurry” of potential closings in the final three months of the year, she said. There have been sales of inland properties, Ms. Wein said, but those aren’t the multi-million dollar sales that quickly lift statistics.

And September, a month when the real estate market is often brimming with sales, “quieted down more than usual,” she said.

On the bright side, Ms. Wein said, she’s waiting to see if the stock market’s recovery will result in an increased number of investors beginning to diversify their portfolios and putting money into real estate, among other things.

“This is a very, very special place,” Ms. Wein said of Shelter Island, predicting that as the market’s recovery continues into 2015, it should be reflected in the local real estate market.

“The fourth quarter looks terrific,” said Georgiana Ketcham of Ketcham Real Estate. She comfortably predicted that when all the numbers are in for the year, Shelter Island sales and the money they generate in Community Preservation Funds will far surpass 2013’s figures.

If there is slowness to closings these days, she attributes a lot of it to buyers being more careful than ever about checking everything out before they’re ready to put down their money.

Surveyors and water quality experts are very busy these days checking out details for buyers, Ms. Ketchum said.

And while a lot of potential buyers are pre-qualified for mortgages, “Cash is king,” she said.

And many buyers are prepared to do a straight cash deal, she added.

As a Shelter Island resident, one concern Ms. Ketchum has is that further development could result in the installation of more septic systems and wells. While she’s pleased the Town of Shelter Island recently used CPF funds to purchase property on both sides of the Ram Island Causeway, she would like to see the focus switch from the purchase of land unlikely to be able to be developed to buying an increased number of smaller lots to keep them from being developed.

Further development would mean more wells and septic systems, she said. Instead, she’d prefer to see people buy and knock down existing structures to build what they want with attention to upgrading septic systems where needed — to ensure they don’t threaten island water resources.

But Penelope Moore at Saunders is seeing more buyers purchase open lots and build their dream homes rather than purchase existing houses.

She saw a very active September and acknowledged that August, a typically busy month, saw more people at the beach and less people house-hunting than usual.

Ms. Ketchum noted that the busiest times for Shelter Island real estate agents are rainy days when potential buyers can be lured from the beach to look at properties.

Among factors contributing to delays in closings, according to Ms. Moore, are tax benefits that have slowed some sales and settling some individual estate matters. Although most potential buyers secure financing in advance, other considerations typically present themselves once lawyers become involved as properties move toward closings, Ms. Moore said.

Buyers are very diligent about looking at all aspects of potential purchases, sometimes resulting in delays in bringing properties to contract, she said.

“I believe we’re in a rising market,” Ms. Moore said. “I think the fourth quarter is going to be good.”

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