Are the storm clouds clearing?
BARBARAELLEN KOCH PHOTO
After a long dry spell, there is movement in the real estate market. With the help of Southold broker Thomas McCarthy, who represents the buyer, the owners of this Aquebogue house have a contract for sale.
So how is the North Fork housing market doing as we head into summer 2010?
And the more specific question on everyone’s mind is whether the market can sustain the promise of the first quarter of the year, in which price indicators, sales and listing inventory all rose, according to Prudential Douglas Elliman/Miller Samuel’s market overview.
Joan Bischoff van Heemskerck, managing director of Town and Country Real Estate’s North Fork operations, thinks it can.
“I’m very optimistic,” he said. “We had record months in March and April. True, there was a bit of a spike towards the end of the home buyer tax credit stimulus, but even taking that into account sales were pretty good.”
Tom McCarthy, co-owner of Thomas J. McCarthy Real Estate in Southold, confirms an increase in activity in our area.
“And we’re looking forward to sustainable activity,” he said. “Three more good years and agencies will be back on an even keel, considering the hit we all took.”
Century21’s Jerry Cibulski says he, too, is starting to see signs of life spreading through all segments of the market.
“I took a look at the stats and compared January to June 2009 with the same period this year,” he said. “There were 98 properties in contract last year and this year we had 147. That’s good news.”
Good news bolstered further by a National Association of Realtors survey of the vacation home market, which found vacation home sales nationwide began to recover strength in 2009, rising 7.9% over 2008. And although listing inventory has increased, an indicator that North Fork sellers are no longer holding back, Mr. Bischoff does not see an excess of inventory.
“I monitor a specific area very closely and the inventory seems normal,” he said. On the pricing front, things seem to have stabilized, according to Mr. Cibulski.
“There was a little dip last year, but I attribute that to the numbers of people buying the $300,000 level homes,” he said. “That skewed the price levels.”
Mr. Bischoff agrees. “The market is no longer dropping and it may even have gone up a bit,” he said. He believes that the nature of the second-home market has kept prices from dropping precipitously.
“We largely escaped the plunges you saw in places like Florida and California, he said. “And I think the reason is that, because we’re very much a second home market, we haven’t seen a lot of distressed properties out here. Foreclosures did put a lot of downward pressure on prices in some parts of the country but here prices stayed relatively buoyant.” Mr. Cibulski seconds that, saying that since many local residents weren’t forced to sell they didn’t have to take a hit on price.
But optimism needs to be tempered with common sense, says Mr. Bischoff. He cautions that, even though the market seems to be on the uptick, overpricing property is not a smart move. According to Riverhead-based Options Realty’s recent blog post, the discount from listed price to closed price dipped from around 10 percent in 2009 to 7.6 percent in the first quarter of 2010, which it interprets to mean that most sellers are now pricing correctly.
If priced appropriately, North Fork homes are also not lingering on the market. Average days on market fell to 150 from 280 in the prior year’s quarter, “a recent high water mark,” according to the Prudential report.
“Anything that’s priced well within its range is moving,” said Mr. Cibulski. “There’s a lot of activity every weekend and together with mortgage rates holding up well, people are now saying they know what they want to purchase.”
Was there a bit of wishful thinking going on that scuttled some home sales in the last couple of years? “Definitely,” Mr. McCarthy said. “Sellers had an unrealistic figure in their heads. This year, they’re listening to their agents. I think appropriate pricing definitely has something to do with the movement in the market.”
He also believes there’s something a bit more psychological at work. “We have buyers out there because people are feeling less frugal this year,” Mr. McCarthy observed. “Buying a house last year would have been a bit like splurging on a Hummer.”