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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

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 search here piece here

Plug holes in your home

A home energy audit that uses an infrared camera can help cut your heating bills and make your home greener.

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?

27 Fair Hills Lane On market for: $3.895 million Highest bid: $1.8 million 5 beds, 6.5-baths, 5,500 sq. ft., ocean view, marble baths, pool

27 Fair Hills Lane On market for: $3.895 million Highest bid: $1.8 million 5 beds, 6.5-baths, 5,500 sq. ft., ocean view, marble baths, pool

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 post below

2 out of 16: Hamptons Auction Deemed ‘Success’

Seems like the biggest problem that many of us are having is that a number of our beliefs in “the way things work” have melted before our eyes.  I remember believing, a few short moths ago, that things would be fine, because Bernanke and Paulson are really smart guys and they know how to handle things like this.

While history may prove me correct, many of the “things” that have happened in recent times were beyond our experience or realm of possibility.

kiplinger_170x33 Kiplinger has put together a list of 10 Financial Myths that we have held tight and that have been de-myth-ified in this current financial turmoil.  One things for sure…we’ll be smarter after this is all over ( albeit less monied).

Here’s #2 – Real Estate

MYTH 2: Real estate behaves differently from other investments. Call it a bubble instead of a boom if you like, but it was supposed to be “proof” that real estate returns don’t strongly correlate with the returns of stocks and other financial investments. The message: Rental properties or real estate investment trusts can make money despite drops in Standard & Poor’s 500-stock index or the Nasdaq. Wrong. REITs lost 38% in 2008 because the credit crunch and overly aggressive expansion plans hammered profits and dividends. REIT returns used to have little correlation with the stock market. Now they closely track it.

Truth: Real estate won’t overcome other risks when credit problems are harming all investments.

see complete list here


It’s often a question, even here, in the Hamptons, where seasonal rentals play a role in that question.

Even homeowners who don’t need to sell in today’s market are asking whether they should sell now, avoiding further loss of value in their homes, and rent until the market stabilizes.  While I think that might be a good idea in theory, unless you have a unique or extraordinary home or are willing are to sell  for a price reflective of the market in 2005, you may just be wasting your time and effort at this point.

But for traditional markets, David Leonhardt, writer for the New York Times suggests a formula for deciding whether to rent or buy.

Over the last several years, I’ve come to like a simple, back-of-the-envelope way to compare the costs of renting and owning. You find two similar houses, one for sale and the other for rent, and divide the sale price by the annual rent. You can call the result the rent ratio.

Click the link for the whole story.

As Home Prices Drop Low Enough, a Committed Renter Decides to Buy


The North Fork, which begins about 80 miles east of Manhattan, is surrounded by the waters of Peconic Bay and Long Island Sound, and encompasses about a dozen hamlets, more than 40 wineries, many farm stands and nurseries and a great number of beaches, many with lighthouse views.

High & Low | North Fork, Long Island

Less Buzz, More Tranquility

Published: January 15, 2009


Here’s a post that makes some good points about the Hamptons Market


The Hamptons – A Buyers Market
Cliffeton Green and Drew Green


“Obviously, the current world financial atmosphere has everyone very concerned about their financial well-being. We now know that it is the sub-prime mortgage crisis that was a primary cause for the current economic uncertainty. Subsequently, Wall Street has seen a meltdown with the loss of some of the industries oldest and most respected names. In turn, Main Street has been affected. It sounds like the sky is falling – yes? Not necessarily, the answer is that for “some” these are indeed hard times, but for others the current economic atmosphere presents opportunity!

As of Friday, Oct. 10 the Dow Industrial dropped below 8,000 (roughly 40 percent lower than its all time high, which was slightly above 14,000 a year ago). Of course, unlike Wall Street, a minute by minute measuring of the real estate market is not possible. However, we do know that on average prices are down roughly 20 percent in the Hamptons from their all time highs of a year or two ago.

Many experts are suggesting that we are at or near the bottom of the market on Wall Street and that there are now good buys to be made. The same can be said for real estate. Frankly speaking, Wall Street influences the Hamptons real estate market more than any other outside influence, and if Wall Street is indeed at its bottom, the Hamptons real estate market cannot be far behind. Simply put, we are now in a “buyers market” and the time is now for those of you who have been looking for the opportunity to get “a deal” (how many of you have uttered those words to us over the past 15 years). If there was a home that intrigued you recently, “make an offer” even if it might be perceived as being a low offer. This is even more relevant today. Some owners are more anxious than their asking price would suggest.


If you are a seller in this market, you need to seriously evaluate your reasons for wanting to sell. The current atmosphere is obviously not conducive to garnering the same return it might have a year or two ago and you must be prepared to accept that. Experts suggest that home sellers need to assess the prices of similar properties on the market and then price their home 10 percent to 15 percent below the competition (if you “really want to sell”).

If you are a buyer and in need of financing, completing a savvy real estate purchase is difficult, but not impossible. In speaking with many mortgage brokers over the past few weeks, each has suggested mortgage applicants need three things currently – an “excellent” credit rating, proof of income over the past several years, and, probably most important, the ability to make a large down payment on the purchase (25 percent to 30 percent). If you are in this position and have been considering a Hamptons real estate purchase, “NOW” is the time you have been waiting for! Currently, “cash is king” and if you have it, you are in the driver’s seat.

A trend that we are now seeing more of is “owner financing.” This is advantageous for both buyers and sellers alike. It is advantageous for the buyer who is having difficulty getting a mortgage through the traditional sources. The current advantages for a seller are numerous:

  • Owner Financing expands the seller’s pool of potential buyers (many “want-to-be buyers” simply can’t get any financing right now).
  • Owner Financing allows the seller to collect interest from the buyer.
  • Owner Financing has capital gains tax benefits for the seller.
  • Owner Financing allows the seller to keep the buyer’s initial down payment, subsequent payments, and the property if the buyer defaults (unfortunate for the buyer but a win-win for the seller).


    If you are in a strong financial position and are interested in buying Hamptons real estate, don’t wait for someone or something to tell you the bottom has been reached. If you are waiting for that moment, you will miss it. The fact remains that in the long run, real estate always proves to be an excellent long-term investment, especially in the Hamptons. When compared to other investment opportunities, real estate makes sense in uncertain times for the following reasons:

  • Real Estate always has a value as opposed to a stock which can potentially be worthless.
  • Real Estate always has revenue producing potential through a rental.
  • Real Estate is in limited supply (especially in the Hamptons). Unlike fuel it cannot be replaced with other alternatives. Unlike food, it cannot be regenerated.
  • Real Estate can be enjoyed like precious metals, gems, or art. However, Real Estate also offers the practical function of giving shelter.In closing, we are without question in uncertain financial times and any redistribution of wealth is currently intimidating to say the least, but real estate’s track record speaks for itself.”

    True North Realty Associates – A Buyers Brokerage

    Thanks to Beth Young and to The Southampton Press for covering this current and important real estate topic…md

    Publication: The Southampton Press

    Acting on homebuyers’ behalf

    By Beth Young


    Most real estate transactions in the United States are conducted with someone representing the buyer in the transaction. On the East End, however, most buyers have gone into transactions without anyone acting on their behalf. That is changing rapidly as the market sours here.

    Michael Daly, who owned the RE/MAX Beach Properties franchise that closed its doors in Southampton due to the credit crunch this past summer, is hoping to fill the void in buyer’s brokerages on the East End by opening his own buyer’s agency, True North Associates, out of his North Haven home.

    “In the last 10 years, listing brokers have had control of the business. All you had to do was list a property, and it would sell,” he said. “The market’s changed, and appreciation for the buyer’s broker has grown exponentially.”

    He’s not alone in his belief that the current real estate climate makes it an important time for real estate agents on the East End to become familiar with watching out for a buyer’s fiduciary interest in transactions, rather than the seller’s interest.

    Rick Hoffman, a regional vice president at the Corcoran Group, said that agents at Corcoran are taking seminars in how to act as a buyer’s broker, and often partake of continuing education classes in the subject. Vice President of Operations Marty Gleason is also available to agents to discuss the nitty-gritty details of acting as a buyer’s agent.

    While Mr. Hoffman said that a “nominal” percentage of Corcoran Group agents work as buyer’s brokers, he added that the company is very receptive to the concept. “It’s always good when we offer clients more options,” he said.

    There is no extra certification required to become a buyer’s broker—a standard real estate license covers buyer’s brokers as well—but John Viteritti, who teaches continuing education courses in the subject at New York University and at Long Island University’s continuing education program offered on the Stony Brook Southampton campus, said that he’s seen “a tremendous increase” in classes on the topic.

    Mr. Viteritti said that as many as 62 percent of the real estate agents in the country represent buyers, but in New York agents are just starting to represent buyers.

    “I think it’s just a matter of, it’s the way it was always done,” he said. “Now a lot of New York purchasers come from other states that have buyer agencies.”

    The concept of a buyer’s broker is a very simple one. Traditionally on the East End, while real estate agents spend most of their time with potential buyers, they are acting in the seller’s interest. Mr. Daly said that such a relationship breeds mistrust, perhaps rightly so.

    “Part of the reason the public doesn’t trust real estate agents is that you would think my job was to help you find the house you wanted at the price you wanted,” he said. “In modern-day real estate, the public is starting to understand that it’s ‘buyer beware.’”

    The financial arrangement with a buyer’s broker is no different than the one between listing brokers and sub-brokers who are seller’s brokers, meaning the commission is still split between the brokers and there is no additional cost to either the seller or the buyer.

    Mr. Daly said that it is a buyer’s broker’s responsibility to do due diligence on the market on the behalf of the buyers, including helping to arrange inspections, and researching comparable sales and market prices.

    As prices begin to sag, the number of houses sold here plummets, and buyers, wondering if this is the bottom of the market, begin seriously looking for properties. Mr. Daly said that another factor right now makes it important for buyers to have someone advocating on their behalf and asking questions about what they are buying. “We’ve become hyper-focused on the quality of homes,” he said. “Buyers are smarter about finishes, granite, hardware, fixtures. People know the difference between Waterworks and Home Depot.”

    Though Mr. Daly, who said he is currently working with seven clients, said that he initially encountered some resistance from traditional real estate agents when he approached them as a buyer’s agent, said that brokers here are beginning to see the advantage of buyer’s agencies.

    “Some agents say, ‘Let me talk to my manager,’ and the manager over-thinks it. It’s not adversarial. It’s about teamwork, like any negotiation should happen,” he said. “The buyer’s agent has with him a motivated buyer who has the objective to make a purchase.”

    Mr. Viteritti said seller’s brokers are prohibited from refusing to work with buyer’s brokers by New York State law, and many of them are beginning to realize that buyers who are working with their own broker are far more likely to be serious—a big boon at a time when properties aren’t moving.

    “He’s already dealt with the tire-kickers,” said Mr. Viteritti of the buyer’s agent. “Chances are, they’re statistically more likely to be real buyers. That vetting had already been done.”

    Mr. Daly did caution that listing agents need to understand that if they share confidential information about a listing with a buyer’s broker, it’s the buyer’s broker’s responsibility to share that information with his or her client.

    “People should be open and should be honest about transactions of this nature,” he said, adding that the culture of dishonesty in business transactions that led to the stock market meltdown has led the term “moral hazard” to become one of the buzzwords of 2008.

    “I’m not saying that people have been dishonest, but locks are put on doors to keep honest people honest,” he said. “Buying a house is the largest purchase people make in a lifetime. To do that without representation, that’s not being responsible to yourself.”

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