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2010 reported Sales Figures for the first week in May are up from 2009 and down from 2008 and still way down from 2007.
Looks like this next 3-6 months, with values down 25-35% and interest rates still low, will be the time that buyers look back on and say either:
“I’m glad I bought when I did”, or ” I wish I bought in 2010″.
I’m not saying we are going to see a “v” shaped recovery by any means, but take a look at a mortgage table and see what a one point increase in interest rates does to your monthly payments. One point could offset another 10-15% or greater drop in values, and do you think that both values will continue to drop AND interest rates will stay this low? Sure, the Greece debacle and the fat fingered Wall Street trader dinged rates this week, but it’s conventional wisdom that rates can only go up. For may people, it makes quite a difference in affordability. If you are a cash buyer, it looks like values are stabilizing.
If you’ve read this blog in the past, you know that I am a reformed bull. I didn’t believe that what happened here ever could or would. I also believed that Manhattan and the fabulous Humptons were immune to the events that took place in more ordinary and mundane places. Well that was nothing that a gigantic kick in the ass and a swift 4×4 across the bridge of the nose, courtesy of the 2008 real estate market, couldn’t cure.
Much of the posts here the last two plus years have been reporting what was happening in the East End real estate market and about news that might impact our market. No gossip, no unsubstantiated claims of “the market is back”. Some colleagues have accused us of “spreading bad news”. Well, the news is the news and there hasn’t been much good news to spread. Even today, when the headlines read “Sales up over 100%!”, the fact of the matter is that sales are still down nearly that same amount from 2006 and 2007 and all the denial and attempts at hiding the facts won’t change that. Through the relationships I have developed in the industry as well as my time working with Redfin on Long Island, even this Hamptons broker has come to understand and appreciate the difference between transparency – showing all the facts- versus marketing – showing only the good stuff that you hope will compel people to do what you want them to do.
Property Shark, Zillow, Trulia, Street Easy, as imperfect as they are, still provide much of the information that brokers have, for generations, tried to keep private in hopes of keeping the buyers in the dark. The curtain has been pulled back, and agents need to stop stammering around like the befuddled little man who has just been exposed.
Buyers and even sellers are calling for the implementation of an MLS on the South Fork. More and more sellers are choosing real estate brokers who are Long Island MLS members to sell their homes because they realize that they will expose their listings to many more potential buyers, increasing the likelihood that it will be sold. I hear that a group of South Fork agents at one of the most established brokerages are putting together a petition to have their broker, who happens to be a member of MSL “west of the canal and on the North Fork” join the MLS in their “east of the canal offices” – Blasphemy!!! But what happens if those gum chewers with big hair from “up-island” come to sell our properties?!? Heaven forbid!
I guess you’ll just have to sell the property and fulfill your fiduciary responsibility to your seller.
So, glass half full? – or – glass half empty? Neither – just half a glass.
East End Sales Statistics
Week Ending 05/09/08
Number of Sales 66
Total Dollar Amount $97,638,609
Median Price $ 617,450
Average Price $ 1,479,373
Week Ending 05/08/09
Number of Sales 28
Total Dollar Amount $19,396,914
Median Price $ 489,050
Average Price $ 692,747
Week Ending 05/07/10
Number of Sales 41
Total Dollar Amount $44,854,933
Median Price $ 740,000
Average Price $ 1,094,023
Things are quiet, here in The Fabulous Hamptons and the news is that, aside from the ‘advertorials’ being run by local papers and websites, hoping to keep favor with their largest source of advertising spenders (the Real Estate Brokers), there is very little news going on here…
Take a look at this mornings Google Alert on “Hamptons Real Estate”
Google News Alert for: hamptons real estate
| TowneBank Continues Expansion Into Insurance
CNNMoney.com (press release)
It currently employs 36 insurance, employee benefits, and risk management professionals and serves a distinguished client list throughout Hampton Roads and …
See all stories on this topic
| Kidnapped men freed from scorching shed in St Albans
The house where the two hostages were held had recently been sold by a local real estate agent. A board on the fence described it as a three-bedroom home, …
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| Local inn owners embrace homework
admitted Linda, a former real estate banker. The kids stopped needing rides everywhere, and the sounds of nature were unfamiliar. “It was like, ‘Those birds …
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Flying Lotus Annouces New Album
| Full speed ahead on outlets
Commercial real estate agents with expertise in national store leasing have indicated the drawing power of Bass Pro Shops with more than 2 million customers …
See all stories on this topic
| Two (Out of Ten) Preferred Stocks Yielding Over 10%
Seeking Alpha (blog)
This preferred of the Supertel real estate investment trust pays 6.7 cents every month, generating a yield of 10.5%. The company operates limited service …
See all stories on this topic
Aside form a few writers putting “Hamptons” in their article to generate seo hits,
…and while Manhattan sales reports are coming out now for Q42009, it will be
another month before East End Q42009 sales report arrive due to the lack of a
centralized system to report sales…time for a nap?
NO! Because prices are continuing to drop here and there will be new inventory
coming on now that the holidays are over and there are deals to be had!
The news that comes out in July will be about all the great deals that closed in
Q22010 that were made during the next 3 months that close in April, May and
Keep your eyes peeled for price drops on Streeteasy.com
Thanks to Valerie Kellogg, from Newsday for this…
“The asking price for this Mattituck house is being reduced by $5,000 every Wednesday until a deal is struck, reports New York magazine. Now at $1.52 million, the 5,200-square-foot, six-bedroom, 4.5-bath house on nearly five acres, which is owned by a builder, started at $2.85 million.”
Check out the article here
“I want people to have more than a house, I want them to have a life, too,” Mr. Birkofer said. “The application of the 28/36 rule can be an eye opener and a ‘go slow’ or ‘reform now’ sign.” The original maxim of a week’s pay for a month’s rent was also based on take-home pay, given that it predates the federal income tax system, which formally started in 1913, said Danilo Pelletiere, research director at the National Low Income Housing Coalition.
see complete story here
thanks to Glenn Kelman for bringing this story to our attention
This is an indication of the gap between buyers and sellers in the Hamptons market today – 45% off asking (at least at these 16 houses) that were put on this “internet auction”.
Several of the houses that didn’t sell had offers of more than 50% off asking price and the sellers were not willing to accept that. It would have been interesting to see the results if this had been a true “absolute” auction, where the houses would be sold to the highest bidder, regardless of price. I imagine some of the bids would have been higher…but I guess we really don’t know, do we?
Lucky buyers were able to purchase two luxury Hamptons homes for almost 50 percent off at an Internet auction of 16 properties in the tony East End.
see complete NYPost article here
Also, see the UrbanDigs.com post below
I was interviewed for this article on Buyers Brokerage by Marcelle Fischler.
It was also in August that Michael Daly gave up being a traditional broker, and working both sides of the fence, to run the North Haven-based True North Realty Associates, a brokerage exclusively for buyers. He said he found the switch had eliminated the “smoke and mirrors” and “dual-agency conflict that has caused so much mistrust among consumers and real estate agents.”
See complete article here
…and he lives in Westhampton Beach, where several of the major firms use MLS, while they choose not to “East of the Canal” on the South Fork (code for The Fabulous Humptons). BTW, it appears that this practice of “cherry picking” (where to use and not use MLS) is against Long Island Board of Realtor rules, NYS Association of Realtor and National Association of Realtor rules and ethical standards, however somehow they are not being enforced. Anyone know why?
Another note; all the major firms in the Hamptons that have offices throughout the rest of the country, use MLS for all of their other markets. ie; Palm Beach, Malibu, Beverly Hills, Chicago, San Francisco, etc, but choose not to in Manhattan and the (eastern) Hamptons. Anyone know why?
Having watched and even worked, managed and owned a brokerage or two in this charade for years – it’s clearly come to a time for change. Pull back the curtain and employ the tools, such as MLS, IDX, VOW that are readily available to the real estate industry that will result in more transparency and greater exposure for listings. Truth be told, this market (Hamptons and North Fork) is frozen solid and I’m not sure that even transparency would make a difference today, but it certainly will going forward when the market starts to thaw.
I see three options for moving forward:
1- Convert RealNet/OREX to an MLS compliant format. Currently this private system provides most of the listing data to Hamptons firms. The public portal for realNet is HREO.com
2- Join the Hamptons and North Fork Realtors Association‘s MLS provided by Rappatoni
3- Join and consistently employ Stratus, the MLS system provided by the Long Island Board of Realtors
There’s a saying in this business: “I ‘d rather have 50% of something than 100% of nothing”. It’s time to start acting like it.
Check out Tom D’s rant on Laurie Mindnich’s Options Realty‘s post:
Tom D Says:
February 26th, 2009 at 4:33 pm
At least there are a few people like Laurie and the folks at Options Realty and George Simpson that are attempting to bring the Hamptons into the real world of real estate. I have been here about a year, having moved from CA. From day one, it seemed that Hamptons RE is some big secret fraternity to which you are only allowed entry if you say the magic words. And I guess a few of those magic words are “I have 44K per year to pay for OREX.” Realtors tell me they they share or co broke or whatever dumb term you wish to use. Yeah, right. They even tell me that the sellers want it this way. Now let’s see, my listing has been exclusively with you for over a year, you haven’t gotten me one offer (good or bad)and I as a seller want it this way? I have bought and sold several houses in the last 10 years in CA and they always sold because of marketing on the part of my agent that used a real MLS and gave not only other brokers but also potential buyers the opportunity to see that my property was available. Don’t you guys know that realtor.com and other websites are the first place that a majority of buyers start their search? How many of your listings would I find there? And even if I find them , I really don’t know where they are because just as with HREO, you typically leave out the address. God forbid that anyone should be able to know where a listing is actually located.
My conclusion to this rant (and believe me I could go on much longer) is that the secret society benefits only you the realtor. You want to keep both sides of the commission for yourself, or at least keep it in your office. Oh, I forgot, a lot of you don’t even share listings within the office.So as with every other crooked enterprise, all one has to do is to follow the money to understand why you do what you do. Well, guys, all I can say is that the money trail is coming to and end. I see from one of the few somewhat buyer friendly realtors I know that there is “only” about a 60 month supply of houses in the WHB area based on 7 being sold last month. Maybe if a few more people knew what was really available you just might sell more. But then you just might have to split that commission. Put your properties on MLSLI like the rest of Long Island does. You just might find a few more buyers now that your Wall Street money is disappearing!