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We are seeing more “positive” real estate reports published these days. As a matter of fact, the most positive reports since the crash of 2008.
The last quarter of 2012 was a big quarter for property owners who were tax averse or had a great sum of wealth tied up in their property or both. The looming threat of the 2103 increase in capital gains, was too much to bear for some. A number of sellers dropped their asking price by millions to avoid paying additional taxes (perhaps in the thousands) to the government. The reality is, many of those sellers were finally motivated to price their homes at market value after years of wishing, wanting, hoping for the price they would’ve, could’ve, should’ve taken in 2007.
Buyers have been waiting patiently on the sidelines for sellers to get real with offering prices. It seems that the threat of increased taxes, only trumped by death, was just the elixir that brought motivation home to roost for many. Quite clever, that Uncle Sam.
So, while Manhattan and The Hamptons are seeing record sales, many other parts of the nation are seeing increased sales as well. California, Arizona and Florida have seen increased values and numbers of sales, but coming back from a 50%, 60% or even 70% drop in value was inevitable. Even as my friend, Alison Rogers, writes in Time Business about Home Prices “Jumping”, it’s not happening in every market.
Jonathan Miller posts about the Pre-Covery (a term shouted out by my other friend Phil Faranda, one of the sharpest tools in the shed ). Read the Jonathan Miller post and the Robert Schiller NYTimes piece for more insight.
The way I see it, business has maintained a pretty healthy level of activity as we have arrived into 2013 and I believe it is going to be a good year for many in the market, but for different reasons. We are still left with three basic groups in today’s real estate economy; The Good or the “Haves”, The Bad or the “Holder-On-ers” and the Ugly – the “Have-Not’s”.
The Good (Haves) may have lost some of their net worth during the last 5 years, but still have plenty of assets at their disposal. They know that many property values are down to 2004/2005 levels and the cost of borrowing money at historic low levels. The Good know now is a good time to invest. While many sellers have been resilient, holding on to their 2007 asking prices, the Good have been even more resilient. They walk through homes, take notes, ask about length of time on the market and price history (or more often tell the agent about them based upon their online research). If the price is out of line, they don’t bother to make an offer, unless its a one-of-a-kind, gotta-have property that has particular appeal to them. They don’t need a recovery.
The other sub-set of Haves are the young, responsible up-and-comers who were too busy either finishing school or getting their career started during the fat-and-happy days. They didn’t get caught up in the Irrational Exuberance. They watched home prices escalate rapidly in the ’00’s thinking they may never be able to buy a home and are now delighted to buy their first home from a bank or a motivated seller at prices they saw 8 years ago.
The Bad (Holder-On-Ers) are just holding on for dear life. They were either able to move laterally in their career or are still there, watching company blogs and listening for the next round of layoffs…kind of like my older buddies waited for their number to be called in the ’69-’72 draft. Many of them resisted using their homes as an ATM during The Roaring ’00’s and are able to pay their bills and get by. Some were hoping for retirement or an easier pace of life by now, but the depletion of their investment accounts and loss of value in their homes has made that unattainable. Maybe they would like to move, but can’t afford to sell their house, buy a new one and the jobs that were once plentiful are now scarce. Left wondering why the stock market is back up to 2007 highs and their investment accounts and property values are not, they feel stuck, waiting for something to get either better or worse. They are hoping for a recovery.
The Ugly (Have Nots) have lost the life they once new, only a few short years ago. They not only over refinanced on their home (or homes) at the peak of the market, but they lost their ability to pay for it when the job market crashed or their company went out of business. Some of them were making $200k a year as a sales rep for just showing up and now can’t get hired for $75k, even though they learned to tap dance to Yankee Doodle Dandy. Many of them saw their credit lines shut down, their credit card interest rates double or triple and they are drowning in a sea of lack. Not a fun place to be. Others are making decisions for them right now. Maybe they were granted a loan modification and since then, have failed to keep up with new payments. They’re either just waiting for the bank to take their home or it already has and now they are renting. Dazed and confused about how the last 4-5 years could have happened. They are praying for a recovery (and filling out their Peace Corps application).
One thing is for sure: the economy is getting better – incrementally - for SOME , but not for all. Fortunately for us, the Hamptons has more of the Good…and Wall Street bonuses are unfolding….and spring rental and sales season is here…and the snow is melting…and life could be much worse.
The recent Superstorm Sandy caused much damage in it’s path; both physical and psychological.
We, on Eastern Long Island, while losing some homes in Wainscott and Quogue, along with some of our most beloved dunes in Sagaponack and Bridgehampton, were fortunate to not be in Sandy’s direct path. Seeing the heart-wrenching interviews with families to the south and west of us who lost everything was sobering and made me embarrassed to have spent one minute belly-aching about the tree that fell on my car and broke off the passenger-side mirror and the few days that I spent without electricity.
( Mario Tama / Getty Images / October 30, 2012 )
The impact to New York City, which includes Manhattan, Brooklyn Queens and oft-forgotten Staten Island was too close to what those mega-disatster movies on NatGeo have been showing for the last several years…how did they know? Why didn’t we do anything to defend ourselves against this? Should we re-build?
( Andrew Burton / Getty Images / October 29, 2012 )
With schools, businesses, public transportation and electricity for hundreds of thousands shut down for a week, the economic impact is tremendous…and will be tallied for some time to come.
And if Sandy wasn’t enough, while recovery is underway, the current gas shortage in the Northeast and the approaching Nor’easter set to arrive this week are like a 1-2-3 punch. No wonder so many are walking around like zombies and much non-essential business and travel are on hold.
(AP Photo/Seth Wenig)
Aside from making some tough choices about rebuilding for individuals, politicians in cities, states and the Fed will need to make tough choices about infrastructure spending (ala Holland) in the days ahead. From what I hear, some Europeans are looking at what happened as unnecessary and a result of our short sighted political myopia that leaves us reacting to the disasters we know will happen, rather than planning to prevent them.
Building safety codes will be strengthened, making home and building construction more expensive and insurance companies will react to this event with no mercy, cancelling policies and raising premiums to pay for the outlay they will have from this storm and to mitigate future losses. Global warming advocates will say “I told you so” and will push their agenda to limit the burning of fossil fuels use of chemicals harmful to our environment even more vigorously.
What will be interesting will be to see the shift in the real estate market. After 9/11/01, there was a large migration to the suburbs from Manhattan. Shaken and terrorized, thousands moved to what they considered to be less vulnerable areas. What are considered safer areas after Sandy? Higher ground? Interior homes? Newer construction? Will generators become as common place as the flat-screen TV?
Time will tell, but the draw of the sea is powerful and our memories are short. For every homeowner that leaves their waterfront home, there are several willing to take their place, which is why oceanfront, bay front and harbor front homes sell at such a premium. Let’s all agree to take steps to make them safer and to use good judgement during serious storms. They’re not worth losing our lives for.
Michael Daly photo
And while, it is typically difficult for “out of area” folks to do our local delicacies justice, Steven has done a pretty good job describing our beaches. Just the same, it is a fairly comprehensive list, so check it out:
While the western Long Island beaches are great, world-class, even, the beaches on the South Fork stretching from West Hampton Dunes to Montauk are a rare breed, marked by rolling waves and soft sand set in front of some of the most dramatic real estate in the United States. Since the region has dozens of beaches, each unique, please click through to each expanded directory listing for more details. Fees and permits vary depending what village and town or village manages the beach. In many cases, parking permits are only available to locals, but taxi options and walk-ons give visitors the opportunity to enjoy the beaches.
Westhampton – Hampton Bays
Beaches in this stretch are part of the Westhampton Island, a barrier island like Fire Island to the West. In this case, Dune Road runs the length of it, from the quiet of West Hampton Dunes, the party-heavy Westhampton Beach and ending at Ponquogue Beach in Hampton Bays at the gateway to the Hamptons.
Quogue Village Beach – One of the quietest beaches on Dune Road west of the Shinnecock Canal, Quogue Village beach is low-key, with a playground and a concession stand to go with the perfect sand.
Cupsogue Beach – This Suffolk County park is a local paradise, with long sandy beaches, a cabana, hiking trails, four-wheel access, free Wi-Fi and the chance to spot local seals sunning on sandbars.
Lashley Beach – Managed by the Village of Westhampton, Lashley is offers a local hideaway and surfing spot that far less rowdy than the shores at the Dune Deck Beach Resort nearby.
Ponquogue Beach – This beach, run by the Town of Southampton, is another local gem, stretching to the end of the barrier island. Beach, surf, concessions and showers are available, but the family atmosphere is what attracts most. It’s a gorgeous spot.
Tiana Beach – Another county-run beach, but this ones has a few different faces. By day it’s lazy and family oriented, but with the nearby clubs Tiana can become a lot more spirited as the day rolls on.
Meschutt Beach County Park – Being on the interior of the Shinnecock Bay brings still water to this county beach. Camping, boating and bathing are great here, and so is the seafood served at the Meschutt Beach Hut.
Southampton’s beaches are pristine, with heavyweights Cooper’s and Sagg Main Beach often scoring top ranks in national polls. Permits and fees can depend on which municipality is running the beach and a few offer daily passes, often only on weekdays. Either way, the scenery is like no other, with perfect dunes and picturesque estates stretching for miles.
Shinnecock East County Park – The only Suffolk county beach in Southampton, Shinnecock East is actually the westernmost beach on The Hamptons coast. A major fishing spot, Shinnecock highlights its undeveloped scenery. Southampton
Sagg Main Beach – This might be perfect Hamptons beach setting, with few features to get in the way of the scenery. Perhaps that’s why droves of seasonal visitors tend to choose this beach. Every other Monday evening during the summer, Sagg Main Beach is the site of a large drum circle, with other spectacles like the occasional visit from fire dancers. No weekend passes for non-residents.
Mecox Beach – This Bridgehampton beach offers endless sand, and limited amenities. The setting is enough. Offers weekend non-resident passes.
Flying Point Beach – If you aren’t local, be sure to make arrangements to get to this Water Mill Beach since no daily passes are available. Incredibly scenic, with the dramatic Channel Pond behind the beach and the Water Mill beach Club nearby. No weekend non-resident passes.
Long Beach Park (Foster Memorial Town Beach) – Located in the hamlet of Noyac, Long Beach Park brings the expected calm of a bay beach, with still waters that are great for boating and fishing. On a narrow strip of land popular with sunbathers, it is a safe and scenic route for cyclists. Offers non-resident passes.
Coopers Beach – Selected by “Dr. Beach” in 2010 as America’s best beach and, more recently, by National Geographic Traveler as the No. 2 family beach, Coopers is definitely a local champion. The only village beach with lifeguards, Cooper’s also gives visitors the option to rent chairs and umbrellas and has a complete concession stand to keep visitors well fed and hydrated. Grassy dunes, soft sand, and stately mansions dot the horizon at Coopers. And if the parking fee is too steep, the bike ride from Southampton Village isn’t so bad. The newly launched SpotRide will take you there for free.
The rest of Southampton Village beaches each offer their own slice of the coast, and in many cases give locals and returning seasonal guests serene getaways from the often crowded “scenes” at some of the more notable beaches in Southampton. Summer-long permits are required at Fowler Beach,Cryder Beach, Road G Beach, Halsey Neck Beach, Wyandanch Beach, Gin Beach, Little Plains Beach and Old Town Beach while no permit is required at Road D Beach.
Sag Harbor Village
Havens Beach – For fans of North Fork Beaches, Sag Harbor’s Havens Beach is your typical scenic Peconic Bay treasure, with views of sailboats on the smooth bay waters and Shelter Island’s coast in the distance. Typical Sag Harbor resident only pass required on weekends in season.
East Hampton – Montauk
The riches of Hamptons beaches continues into East Hampton, where the sands, waves and the mansions tend to swell as you move East. But cross into Montauk and the surf clubs and swank scenes start to change until you at last hit Camp Hero with its miles of wilderness, bluffs and the Montauk Lighthouse at The End. For East Hampton and Montauk beaches, fees and accessibility depend on who runs them, but services such as Hamptons Free Ride can help visitors without permits get on the beaches.
Camp Hero State Park – The end of Long Island, Camp Hero is a wilderness like no other, with interior trails frequented by hikers, bikers and horseback riders, a museum, the historic Montauk Point Lighthouse and steep, dramatic bluffs that fall into the rough Atlantic Ocean. State park fees apply on the weekends, but the park is open for free during the week. A very popular spot for surf casting, too.
East Hampton Village
Main Beach – Easily the most visited beach in East Hampton, Main Beach offers a full pavilion with food and drinks, piping plover nests and grassy dunes along a stretch of beach that yearly attracts droves for its perfect vantage point to watch the Labor Day fireworks. It can definitely get crowded, though. Village Parking passes required between Memorial Day and Labor Day…** Parking tickets will be given out for no pass!
Georgica Beach – Normally a peaceful beach for visitors who want less hub-bub, devastating erosion from Hurricane Irene has left this beach closed while officials work to replenish the sand and fix the damage. Village Parking Permit required.
Wiborg Beach – Located right near the Maidstone Club, the tucked-away and very scenic Wiborg has long been a favorite of surfers. However, there are no bathrooms or lifeguards here, though approvals for lifeguards are in the works. Village
Parking Permit required.
Egypt Beach – On the other side of the Maidstone Club, Egypt is a bit more rugged than its neighbor Wiborg, but locals know it as one of the best places to catch the sunset. No lifeguards, though.
Two Mile Hollow Beach – A large parking lot with a daily rate makes this beautiful beach another often visited attraction. Not much by way of amenities, but very relaxing.
East Hampton Town
Indian Wells Beach – While the sand and surf are big draws here, as well as the family friendly atmosphere and volleyball courts, the row of food trucks that park there give this beach a unique draw. Surfers love it, too.
Ditch Plains – Another beach loved by locals and visitors alike, Ditch Plains is a huge favorite of surfers. Only two miles from the heart of Montauk, the beach also has beautiful cliffs that stand out in a region where sand dunes are more common to find on the beach.
Like Ditch Plains and Indian Wells, lifeguards can also be found at ocean beaches such as Atlantic Beach in Amagansett, Kirk Park Beach in Montauk and Edison Beach in Montauk while unprotected and still incredibly scenic beaches include Little Albert’s Landing in Amagansett Lazy Point in Amagansett, South Lake in Montauk, Beach Lane in Wainscott and Townline Road Beachin Wainscott. Kirk Park offers a daily rate on weekdays.
The town also has a few bay beaches that offer calmer waters for young swimmers and spectacular boating and fishing. Those are Albert’s Landing in Amagansett, Gin Beach in Montauk andMaidstone Park in Springs.
I am so proud and pleased to have joined Sotheby’s International Realty in Sag Harbor, New York.
Sotheby’s is a world class brand and brokerage, whom every brokerage compares themselves to, but none actually do.
Michael F Daly
22 Spring Street
Sag Harbor, New York 11963
Tel 631 525 6000
“Guys on Wall Street would sell the Hamptons house and their art collection before they would take their kids out of a top school,” says one Morgan Stanley banker. “Education is an essential.” The top end of the art market has recovered quickly from the recession, so selling now might not be a bad move.
Funny thing is, I see business picking up in the Hamptons ( albeit, from a horrendous Q4 2011) and am hearing about an uptick in NYC sales too.
So what’s the truth here? Unfortunately, with no dependable date sharing and tracking system in The Hamptons, we can’t know…stay tuned!
A while back, Doug Heddings posted about the
Among his points was the point that some agents still, in this new reality, win listing by giving “flattering” prices to the sellers, just to get the listing.
When you know someone else will do it, then why not? After all “Hamptons L:ightening” could strike and someone just might pay more than it worth.
And it will bring buyers who are looking in that price range that you can show other homes to, so the practice is hard to resist for many.
But this is an extreme:
I know these agents and they are all good at what they do…must’ve been a very obstinate seller ;-)
It’s not unusual for homeowners to add or rent out a room from time to time, but there are rules about this sort of thing, you know…
Southampton Town Code Enforcement chief says the estate was operating as a transitional rental without a permit.
- By Brendan J. O’Reilly
- February 6, 2012
Southampton Town Code Enforcement executed a search warrant Sunday at a Water Mill estate advertised as “The Ultimate Luxury Rental in the Hamptons.”
The owner and builder, Michael D’Alessio, and two others, Matthew Ardley and Megan Kemper, were issued appearance tickets for alleged code violations, including change of use, construction without a permit, operating a transitional rental and not having a rental permit, according to Chief Investigator David Betts. see more here
**Thanks to Jonathan Miller for bringing this to the HREB’s attention.
“We were actually shocked they did this,” says Scott Simon, who as the head of the giant bond fund PIMCO’s mortgage-backed securities team is one of the world’s biggest mortgage bond traders. “It seemed so out of line with their mission.”
The trades “put them squarely against the homeowner,” he says.
Gregg Saunders, vice president of retail real estate development at Philips International, had been in no rush to sell a house north of Route 27 in Sagaponack that was built for him and his wife in 1998. The four-bedroom property with a tennis court and pool had been on the market for two years at $2.9 million.
Then last year, he bought a historic home on an acre of land closer to the beach in the same town for $2.45 million.
Saunders said he “didn’t want to be stuck with two homes,” so he cut the price on the first house “dramatically.” It sold in December for $1.75 million.
as told to Bloomberg News, Jan26, 2012
The reality is, the realty market in Manhattan has held significantly better than The Hamptons. We have typically said that “as goes New York, so goes the East End”, however it does not appear to be holding true this time around.
January 27, 2012, 8:14 AM EST, Bloomberg
Why would that be? Could it be:
1- Manhattan has more permanent residences and The Hamptons are more discretionary homes?
2- There are more foreign buyers in Manhattan than The Hamptons because the investment quality of Manhattan real estate is more stable?
3- The Bankers who have fueled both buying here as well as the business of others who end up buying here are being more conservative? ( have you heard the stories about the senior management at Goldman, Chase, etc telling their ranks to “keep a low profile”)
4- Is it that The Hamptons don’t have professional property management companies that can manage real estate investments adequately for investors?
5- When enough properties sell for 60% (or less) of asking price, does that spook big buyers to downsize and play it safe?
6- Could the lack of dependable Market Data make today’s more educated buyers uneasy?