Real Estate: North Fork home market holds its own in third quarter

KATHARINE SCHROEDER PHOTO | A home that recently sold in Southold.

The North Fork real estate market held its own in the third quarter of 2011, with average prices declining only slightly and the number of houses sold increasing compared to the third quarter of last year, according to reports issued by several major real estate agencies in late October.

Prudential Douglas Elliman, which hires independent appraiser Miller Samuel Inc. to prepare its quarterlies, reported 140 sales in the North Fork market during the third quarter, up from 115 in the same quarter last year.

Discounts from listing prices decreased substantially, with homes selling, on average, for 8 percent less than their listing price. In the third quarter last year, homes were selling for 15.5 percent below the asking price.

That is likely the result of sellers pricing homes more realistically, North Fork real estate agents said this week.

Suzette Reiss, an agent with Prudential Douglas Elliman’s Mattituck office, said sellers understand they’re in a buyer’s market and are pricing their houses accordingly.

“There doesn’t seem to be as much of a tug of war as when the market started to change,” Ms. Reiss said. “Homes were being priced too high and they were just sitting on the market. A lot of it really has to do with how it’s priced.

It’s really important, if sellers want to sell in this market, that they listen to advice on pricing properly.”

“People are pricing their houses more realistically to compete and get the buyer that is out there,” said Paul Loeb of Lloyd’s Realty in Greenport. “It’s an active market. We’re dealing with new people every day. They’re there. I’ve been in dead markets where you sit quietly and wait for people to call. It’s not like that. People are coming and shopping.”

“The prices are so attractive that people are moving around. The second-home market is very strong and people are enticed by the new pricing, and there’s a lot of very good, strong first home buying activity,” said Valerie Goode, owner of Colony Realty in Jamesport.

The Corcoran Group, another regional real estate firm, also released its third-quarter report recently, with data compiled from the independent Long Island Real Estate Report. Corcoran reported 130 houses sold on the North Fork this quarter, up from 125 in the third quarter of 2010. Corcoran’s report does not include Riverhead, but it does break down North Fork sales by hamlet.

Corcoran’s report shows a big uptick in home sales in Southold, with 33 homes sold compared to 25 in the same quarter a year ago. All other areas seemed to be keeping up last year’s pace. Thirty-one houses were sold in Aquebogue and Jamesport, down from 32 in the same quarter last year. There were 16 sales in Cutchogue, the same as last year. Greenport saw 16 sales, up from 14. Mattituck and Laurel had 22 sales, down from 25; East Marion and Orient had 11 sales, up from 10; and Peconic had one sale, down from three.

According to the Prudential report, the median selling price declined from $489,000 to $450,000. The Corcoran Group also reported a slight decline in median sale price, from $430,000 to $425,000.

According to a Newsday article last week, Moody’s Analytics has just released a report stating that the Long Island real estate market will hit rock bottom late next year, after a large “shadow inventory” of bank-owned homes is put on the market. There is widespread belief in the industry that banks have been holding back on listing properties they own because it could further depress prices in an already weak market.

Mr. Loeb and Ms. Reiss said it seems the North Fork, by virtue of its location as a vacation destination, is inoculated against the wider crisis.

“The market has been holding its own,” Ms. Reiss said. “There are definitely lower prices and we’re seeing more short sales. We never really saw them before. But this is a second-home area and it’s very protected out here.”

She added that homeowners who bought toward the end of the real estate bubble that popped in 2008 and now need to sell are faring the worst in this market.

“For people who have long-term investments, it’s not so bad,” she said. “It’s not that bad east of Riverhead. It seems that Riverhead got hit a lot harder.”

Mr. Loeb said a handful of foreclosures hit the North Fork market a little more than a year ago.

“They sold fast,” he said. “I do see a couple of short sales, but the foreclosure market is very slim. There might be one in Flanders or Riverhead, but we don’t have any in Southold Town. Whether there’s shadow foreclosures hanging over market, if the past is any indication, I’m not seeing that will have a significant impact on the market.”

Mr. Loeb said he’s been getting a lot of inquiries lately from buyers who think they can “buy up the North Fork at wholesale prices,” when he believes sellers are currently offering their houses at very realistic prices.

“They think everyone is just desperate to get their money. That’s just not the case,” he said. “Its almost like a cultural difference in the negotiating process. Games you would play in other areas, sellers won’t entertain here. If you’re earnest and you have the money, the sellers will entertain you. If you give them a ridiculously low offer, it will turn sellers off.”

Mr. Loeb said the market has been very strong in the $250,000 to $400,000 range. Ms. Goode agreed there’s a lot for buyers in that price range to consider, but short sales have put some sellers in a bind.

“Foreclosures and short sales are hurting the $300,000 down,“ she said. “Their value just keeps getting knocked. It’s pretty unfair for the folks who are paying their bills. I know of one house where the people have outgrown it and want to trade up, but across the street is a house twice the size for less money because it’s a short sale. They’re going to have a hard time selling.”

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