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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

Southampton Town Code regarding Rental Properties

Southampton Town Shuts Down Harbor Rental

Behave….

 

Water Mill Estate Busted on Code Violations

Southampton Town Code Enforcement chief says the estate was operating as a transitional rental without a permit.

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.

Freddie Mac Bets Against American Homeowners

by Jesse Eisinger, ProPublica and Chris Arnold, NPR News Jan. 30, 2012, 5 a.m.

 

The Hamptons are one of the last hold-outs in the US for instituting a marketwide Multiple Listing Service (MLS) for the purpose of sharing and marketing listings.

In recent years, MLS systems nationwide have not only been used for sharing listings among brokers, but the real estate industry itself, through Realtor.com and many outside vendors, such as Streeteasy, Trulia and others, have built marketing systems around the MLS data feeds that give MLS listings wide exposure to many potential buyers.

You’ll note that Realtor.com, the countries top visited real estate website, only has 122 listings for Southampton because so few Hamptons brokers are members.

Trulia has 1126 Listings for Southampton and Streeteasy has 614. So, who’s to know exactly how many listings there really are? This has maintained the status-quo that keeps buyers on a tight leash and competition out.

Also, through  what is called an Internet Data Exchange (IDX), brokers in MLS’s are permitted to put each others listings on their own sites, making it easier for buyers to look for listings using the agent or agency they wish to work with.

Then to top it all off, there are Virtual Office Websites (VOW’s). On May 27, 2008, NAR and the U.S. Department of Justice reached a favorable settlement, concluding a two-year DOJ investigation (followed by two and a half years of litigation) regarding NAR’s multiple listing policy as it pertained to the display of listings from the MLS on brokers’ virtual office Web sites, or VOWs.

With no MLS, there is no IDX and there is no public data sharing, so here, each brokerage is limited to haing their own listings on their sites. This encourages buyers to go to their websites and get locked in to getting information from that brokerage, increasing the chance that they will sell their own listings and get both sides of the commission. It also favors the big brokerages, some of whom have gotten there by simply buying up other smaller brokerages, because they have the most listings on their sites. Even Manhattan has a listings sharing service through the Real Estate Board of New York that has resulted in VOW’s

If this sounds complicated, it really is. You see, real estate brokers,  like most business owners, like to have control of their inventory. And even while setting up rules and systems to promote their listings widely, they still hope to protect the goose and keep as much of the potential earnings on each sale for themselves.  That’s human nature, but it may not be legal.

see the NYPost piece below…

Justice Department probes top-end Hamptons real estate brokers – NYPOST.com

The US Justice Department has launched a preliminary probe into the business practices of top Hamptons real-estate brokerage houses, including their use of an expensive listing system that may block smaller companies’ access to high-end properties, The Post has learned.

Also see:

Feds probe Hamptons real estate business – Bloomberg

and

List Service for Properties in the Hamptons Is Scrutinized
New York Times
By CHRISTINE HAUGHNEY Several Hamptons real estate executives said Tuesday that they had been contacted by Justice Department officials seeking information

It seems that one of the challenges brought to bear by using the  Market Value Tax Assessment system, instead of those complex numbers and formulas that only the assessor can understand, is that when you need to increase taxes and you can’t increase the tax rate, then what do you do?  Of course, you increase your estimates of the market values of the homes in your taxable area. Everyone understands that number and few ever agree on it, whether it be buyers, sellers or TAXPAYERS.  But doing that in the midst of an approximately 33% drop in market values might make some homeowners (taxpayers) a little cranky, don’t you think?

Southampton News – Property values increase by $2 billion in

The 10-percent average decline in Hampton Bays’ assessment values is being blamed by Overall, Southampton Town’s total assessed value climbed from an initial even amid the sluggish real estate market in areas like Sag Harbor,

Assessments drop in west, climb in east, and skyrocket in Sagaponack

Last Updated May 12, 10 12:07 PM

Being that there were so few real estate transactions last year, due to the worldwide financial crisis, the Southampton Town assessor’s office had little data to go on when it calculated assessments for 2010-11

The result has been some assessment fluctuations that some say are inaccurate and unfair.

The sales statistics for this particular week, from the last three years are below.

These sales represent “deals” that took place in the last quarter of the preceding year..

Notice that, for 2010,  the number of sales and median price are both recovering slowly and the average sales price is back up to hey-day levels of over $1.7M,  thanks to a couple of over $10M sales this week, namely Dennis Suskind’s sale of 9 Morgan Hill Way, Bridgehampton for $11,149,900. The original listing price for this home was $24M back in 2007.   Also, one of my favorite Hamptons houses, 16 Windmill Lane sold for $12,500,000. The brainchild of real estate developer and broker Antonella Bertello, famed architect Francis Fleetwood and one of the Hamptons finest builders, Stanley Dalene of SDC Construction is a stunning manse with three master suites and several gathering rooms with large fireplaces. I dare say that $12.5M was a nice price for that property.

Without these two sales, average would have been around $1M.



East End Sales Statistics
Week Ending 03/19/10
Number of Sales                34
Total Dollar Amount          $57,883,054
Median Price                    $       660,000
Average Price                  $   1,702,443


Week Ending 03/20/09
Number of Sales                29
Total Dollar Amount         $40,781,459
Median Price                   $       475,000
Average Price                 $    1,406,257


Week Ending 03/21/08
Number of Sales                40
Total Dollar Amount         $48,940,292
Median Price                   $      685,000
Average Price                 $   1,223,507

Regarding lis pendens, the first step towards foreclosure, these figures are steadily rising.

Not only are sub-prime loans ending up here, but the thousands of prime, interest -only 5/1 ARM’s that were taken, banking on steady appreciation are now coming in for a reset. These loans were used for homes up to $10M and many of the buyers, with the economy having tanked, don’t have the income to either make the new payments or to refinance the loans, especially since there really is virtually no market for jumbo refi’s today. Looks like this number may continue to grow, with “strategic default” becoming an option for more and more of these properties.  This should make for some good buys out there this and next year, since some owners have the stomach for waiting out the bank and others don’t…

                    East End Lis Pendens Statistics
Week Ending 03/19/10
Number of Filings                        22
Total Mortgage Amount                $13,307,188
Median Mortgage                          $    489,000
Average Mortgage                        $    604,872
Week Ending 03/20/09
Number of Filings                        18
Total Mortgage Amount               $10,682,361
Median Mortgage                         $    453,500
Average Mortgage                        $    593,465


Week Ending 03/21/08
Number of Filings                        12
Total Mortgage Amount               $4,313,300
Median Mortgage                        $    321,500
Average Mortgage                        $   359,442

The sales reported during this period in  Jan ’09 were directly impacted by Black September ’08 when Lehman Bro’s died and the financial markets went into their second tailspin in two years, so apply that rock salt to the sales numbers below.  Also keep in mind that,  here in Suffolk County, it usually takes a month or two for closed sales transactions to make its way through the County recording office and to be publicly reported. so the majority of these reported sales closed in November and most of the deals actually actually came together two to three months earlier than that (August/September).  Simply put, today’s reported sales reflect business activity that took place last summer.  Nothing like “fresh” data, eh?

                                    East End Sales Statistics ’09 vs ’10

Week Ending                              01/09/09                                      01/08/10
Number of Sales                           30                                                47
Total Dollar Amount              $51,852,223                                $39,234,870
Median Price                         $     642,500                                $     540,000
Average Price                       $   1,728,407                               $      834,784

- 10 of the 30 sales were for over $1million in 2009  (33%)

- 7 of the 47 sales were for over $1million in 2010  (15%)

It’s clear that the high-end is quieter and the low end is busier, with those who see price/value reductions of around 30% in two years finally jumping in under $1million.

***************************************************************

The lis pendens figures are astounding, compared to last year – over 10 times as many initial filings by lenders on defaulting mortgages. Keep in mind the following:

One- the mortgage companies had a moritorium on new foreclosures last year at this time as they and the government looked for answers on what to do about the crisis and,

Two- “strategic default” was not as fashionable as it is today.

                    East End Lis Pendens Statistics  ’09 vs ’10

Week Ending                            01/09/09                                        01/08/10
Number of Filings                        3                                                  32
Total Mortgage Amount           $1,565,700                             $18,270,479
Median Mortgage                    $    500,000                            $     419,100
Average Mortgage                  $    521,900                            $      570,952

That’s the numbers!   What do you think?

**data from https://www.lirealestatereport.com

EHNY_565State audit chastises East Hampton Town for no-bid contracts
27east.com
By Beth Young The widespread belief that East Hampton’s large budget gap was caused by fiscal mismanagement was confirmed by New York State Comptroller

see also: › East Hampton Town budget is up 4.6 percent; taxes up 10 percent

Former de Menil property on Further Lane, East Hampton

Former de Menil property on Further Lane, East Hampton

East Hampton – When a portion of the Atlantic double dunes was allegedly flattened during the construction of a retaining wall on the former de Menil property on Further Lane, the media pounced on the story of a billionaire investor’s development on the biggest residential real estate sale in U.S. history. Now, with the restoration of dune vegetation in the effected area and variances before the Zoning Board of Appeals (ZBA) to maintain the eastern-most part of the wall, much of the controversy surrounding the Baron property has ended, though the development of the property should still be interesting to watch over the next several years. see the story here

http://moneywatch.bnet.com/

Bernie Madoff’s Beach Home Sells For More lg_iglink_130x100Than List Price

By Ilyce Glink | Sep 17, 2009 |

Guess the home sale pundits were wrong: Bernie Madoff’s beach house location is worth more – not less.

A spokeswoman for Corcoran, the listing agent, confirmed today that Bernie Madoff’s Montauk, NY beach house went under contract for more than its $8.75 million list price. She didn’t have information on when the property would close or how much more than the list price the buyer or buyers were paying.

The sale is bound to raise some eyebrows and heighten suggestions that the housing crisis has turned the corner. Over the past year, sales in the Hamptons, some of the most expensive and exclusive property east of Aspen, Colorado, have slumped. The few properties that have sold have taken a big beating on price.

But as Wall Street goes, so do home values in the Hamptons, not to mention Manhattan. While Madoff’s 3,000 square foot beach house was spectacularly located (the house was built closer to the water than current building codes allow), the truth is that Wall Street now has a quarter or two of immense profits under its belt.

Profits = bigger salaries and bonuses. And bigger salaries and bonuses often translates into real estate purchases. If the money men (and women) of Wall Street believe that New York (or Hamptons) real estate is undervalued, and they have bonus cash in their pockets, you can expect them to pounce.

Does the Madoff beach house sale signal a true end to the housing crisis? Maybe. Let’s wait and see what his and Ruth’s co-op sells for.

smileFor the week ending 9/11/09 vs 9/12/08 the number of sales reported by http://www.lirealestatereport.com was up 85% from 27 to 50 and the dollar volume in sales was up 61% to over $68M.

Median sales for the Five East End Towns (Southold, Riverhead, Shelter Island, Southampton and Esat Hampton) were down a whopping 58% to below $600,000 and average sales were down 13%.

While it is easy for single week reported figures to have anomalies that could be misleading, there have been similar figures posted in recent weeks, showing that buyer demand for lower priced homes picked up in May, June and July of this year, since it takes an average of 60 days to close a contract and many of these reported sales have recording dates in late July and August.

                        East End Sales Statistics
Week Ending                                09/12/08
Number of Sales                                 27
Total Dollar Amount                $42,346,174
Median Price                               $       969,000
Average Price                             $   1,568,377

                        East End Sales Statistics
Week Ending                                 09/11/09
Number of Sales                                 50
Total Dollar Amount                $68,572,145
Median Price                               $       562,500
Average Price                             $    1,371,443

sadEqually notable, the lis pendens filings (the first step a bank takes towards foreclosure) for the same week were up 6 times from 4 in 2008 to 26 in 2009. Dollar volume was up 5 times and the median and average mortgage amount was down nearly 20%.   Hard to find a silver lining in this cloud, except to say that these foreclosures might be working their way through the system, but considering the facts that it appears that less than 15% of lis pendens actually go to foreclosure in these parts, and it can take up to two years for the process to take place, there will be some of these foreclosures popping up for quite some time.

                   East End Lis Pendens Statistics
Week Ending                                    09/12/08
Number of Filings                                    4
Total Mortgage Amount          $2,031,500
Median Mortgage                        $   456,500
Average Mortgage                      $   507,875

                    East End Lis Pendens Statistics
Week Ending                                   09/11/09
Number of Filings                                  26
Total Mortgage Amount           $10,801,622
Median Mortgage                        $      380,000
Average Mortgage                       $      415,447

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