The buyer’s real estate market of the past five years is beginning to look like a thing of the past, and sellers are having better luck standing their ground on their asking prices than they have since the beginning of the Great Recession in 2008.
Three major real estate firms on the East End released their second quarter reports this week, and all three reports tell a similar tale of a market where houses are sitting around for less time, where sellers are able to hold more firmly to their asking prices, and where the inventory of houses on the market has waned, leading to higher demand.
All three indicators are signs that the market has become more favorable for sellers.
“With the combination of rising sales and falling inventory, the Long Island housing market had the fastest market pace we’ve seen since 2005,” said Douglas Elliman President and CEO Dottie Herman as her firm released their quarterly Elliman Report. “As housing prices have begun to rise, we are now seeing signs of new supply entering the market, a relief for buyers.”
Douglas Elliman reported there were 160 sales on the North Fork in the second quarter, up from 137 in the same quarter a year ago, a 16.8 percent increase. They reported that houses stayed on the market an average of 163 days, down 14.7 percent from 191 days in the same quarter a year ago. The mean selling price on the North Fork also increased 10.8 percent quarter over quarter, from $415,000 to $459,750.
“There were more sales this quarter along with less inventory and prices are beginning to rise,” said Ms. Herman. “An improving economy and concerns about rising interest rates brought a lot of buyers into the market even though credit remained tight. Overall, it was an encouraging spring and we look forward to a stronger market for the remainder of the year.”
Douglas Elliman reported the number of sales on the South Fork jumped even higher. They reported 675 sales this quarter, up from 539 this quarter last year, a 25.2 percent increase. The average length of time on the market only dipped slightly, from 193 days to 183 days, a 5.2 percent decrease. The median price increased 8.2 percent, from $850,000 to $920,000.
“The Hamptons housing market had the most active spring since 2006,” said Ms. Herman. “There were a lot more sales and inventory continued to fall, keeping the upward pressure on the housing prices. With fewer choices for buyers, we saw properties sell slightly faster with less negotiation between buyers and sellers. We expect more of the same tight conditions over the next several quarters.”
Douglas Elliman reported both the North and South forks had fewer houses on the market this quarter than they did this quarter last year. On the South Fork, there were 1,573 houses on the market, down from 1,798 this quarter last year. On the North Fork there were 593 houses on the market, down from 654.
The Corcoran Group’s Corcoran Report showed similar market trends. Broken down by price range, Corcoran Group reported strength in two areas that had been hit hard in the recession: The $5 million-plus range on the South Fork, which took a hit when the mess on Wall Street trickled down to the potato fields of Water Mill, and the $350,000 to $500,000 range on the North Fork, many of which are houses in farm field subdivisions. That range on the North Fork had been a favorite for young families trading up and retirees looking for homes out east; both of these groups also felt the heat from the mess on Wall Street, due to the tightening job market and a hit to investments in retirement accounts.
Corcoran reported the number of sales in the $5 million-plus range on the South Fork doubled quarter over quarter, while on the North Fork, the $350,000 to $500,000 range expanded to 41 percent of total sales, up from 29 percent this quarter last year.
Town & Country Real Estate breaks down its sales figures by hamlet, and they reported this week that the areas of Jamesport, Aquebogue, Baiting Hollow and South Jamesport did the best on the North Fork this quarter, “with a solid increase of 26 percent in total home sales volume and 22 percent in median home sales price, which improved from $362,500 in the second quarter 2012 to $443,483 for the same quarter in 2013,” said Town & Country CEO Judi Desiderio. Town & Country reported higher prices, but double digit percentage decreases in the number of sales in Mattituck, Southold and Orient.
“The soggy spring was a slow take off for the North Fork, but, keep in mind, while the Hamptons sizzles in summer, the North Fork flies in fall,” said Ms. Desiderio.
Ms. Desiderio reported the “white hot market” of Montauk saw a 35 percent increase in the number of home sales, which may come as little consolation to longtime Montauk residents who barely recognize their hometown since it was discovered a couple years back.
Town & Country also reported that East Hampton Village saw a whopping 207 percent increase in median sale price, to $4.3 million, while Southampton Village’s median price is now just above $3 million.
“For the past 20 years of reporting on home sales activity, I’ve referred to East Hampton Village and Southampton Village as our crown jewels,” said Ms. Desiderio. “now…they firmly secure their position.”
If all this stuff is too rich for your blood, there are still a few fixer-uppers and sweet deals available out there.
This three bedroom, one bath ranch, listed at $140,000, is in a subdivision off of Roanoke Avenue just north of Middle Road in Riverhead. Live bidding is active on this listing here. The website says the listing is “hot,” which likely means you’ll be all hot and bothered once you start fixing it up. The property is sold “as is,” real estate code for: “good luck getting a mortgage. Bring cash.” On the upside, if you buy this house, you’ll be doing the neighborhood a favor.
This three bedroom raised ranch on Grove Road in Southold is listed by Re/Max for $294,900. It’s near Hashamomuck Pond and it has a neat-o two-car garage underneath it, as well as retro wood paneling.
This cute two bedroom cape in Orient by the Sea is listed at $365,000 by Albertson Realty. It has really low taxes due to the tiny number of kids in Orient schools (yay?). There’s also a beach down the lane, which is one of the great benefits of living on Long Island: There’s water everywhere. And Orient is, well, if you haven’t been to Orient, you should go there and see if you like it. It’s a magical place.
There are no listings the Beacon deemed affordable on the South Fork, and of course, none of this stuff is really affordable if you work at McDonalds. If you do work at McDonalds, here’s your sample budget planning guide, in which McDonalds walks you through the process of earning $1,105 per month from your day job, $955 per month from your night job, and paying your bills, including your $600 per month rent. If you follow their plan, you’ll somehow have $750 worth of monthly spending money, which you can put toward your dream house in the Hamptons. If you save every penny of that spending money, you will have enough for a 20 percent down payment and closing costs on a $300,000 house in about nine years, assuming there will be any houses on the East End selling for $300,000 nine years from now.
Best of luck to all the house hunters out there. It’s time to buy now or get off of Long Island.
Town & Country’s reports are available here.
Corcoran Group’s report is available here.
Douglas Elliman’s reports are available here.