Buying Property Abroad: CNNMoney

Gerri Willis had a great spot on CNN Money :

http://money.cnn.com/2006/03/23/real_estate/tips/willis_tips/index.htm

This doesn't look like Kansas (and we don't keep records like they do)

Today I recieved an email:

To: Michael F Daly, True North Realty Associates
From: Stephen Schramke, Instant Home Valuations.com
Subject: Exclusive Introductions to Active Sag Harbor Sellers and Buyers!

And Mr. Schramke promises:

Get qualified Sag Harbor sellers and buyers delivered exclusively to your email box.
The Instant Home Valuations Report Sponsorship Program GUARANTEES targeted introductions to Sag Harbor sellers and buyers who are using the Internet to purchase automated online home valuation reports.

So, I went on their website as a consumer wanting to see what they offered consumers... http://www.instanthomevaluations.com/home.php

ONLINE HOME VALUATIONS!
BUY OR SELL WITH CONFIDENCE AND KNOWLEDGE!
FREE SALES HISTORY REPORT!
Enter Your Address Below:

...and looked up my own property...

Most Recent Sales Date: 09-june-1989

...sorry, I bought this home in August 2004. Next!

In this market (South Fork of the East End) the problem that many home evaluation websites have is that they rely on data from the local municipalities and the area MLS to form their "valuations" or "(z)estimates" as you may have seen on www.Zillow.com .

Most "traditional" markets (like in the heartland) use MLS and keep good records, but Suffolk County along with Southampton and East Hampton townships are all far behind and have incomplete in property data. Adding the fact that only approximately 10% of the east end listings are on MLS, these digitally dynamic websites can't possibly have good data. So, what do we do?

The web is sure getting "stickey"

While the www is certainly helping us to conduct our business more efficiently and communicate with clients and customers, there are tons of websites out there fishing (or is that phishing)to get customers contact info just so they can sell them back to us.

Recently while clicking around on the Realty Times Market Conditions (TM) by "Local Real Estate Experts", it connected me to an agent who is in Florida but paid to be listed as the "Hampton" agent. I sent her an email asking her why she was listed as a Hamptons agent and she replyed "what's it to you? I get plenty of referrals from that site!" Well, isn't that special?

In a Yahoo search of "Hamptons Real Estate", one of the Sponsor Results was EscapeHomes.com. I was led down this long path and after requesting assistance with Sag Harbor real estate, I recieved an email stating that a Westhampton agent will be contacting me. No thanks. I'm sure he will refer me to another agent.

Another "Sponsor" took me to a website with palm trees and stucco - no Hamptons here, either.

Harry at Sagg Main Beach this summer?

According to Branden Keil of The New York Post, J.K. Rowling (pictured right), author of the Harry Potter books will be renting on Hedges Lane in Sagaponack this August. see http://www.nypost.com/realestate/61154.htm
The author has reportedly become a billionaire since her first Potter book was signed to be published by Bloomsbury just 10 years ago, in August of 1996.

Little Evidence of MLS Here on the East End

There are a few brokerages (Prudential, C21 and a handful of smaller offices) that are members of the Long Island Board MLS however, probably less than 10% of East End exclusives are listed there. The main objection from local brokers against MLS is that they don't want "up-island" brokers having access to East End listings.

Brokers who are not members of MLS don't have their listings on Realtor.com, the largest and most frequently viewed website in the US for buyers looking for real estate. That's because Realtor.com does not recognize listings that don't meet industry-wide protocol standards of an MLS. It also means that other brokerages need to find out about new listings through the archaic system of broadcast faxes that Hamptons brokerages use to share listings and announce Broker Open Houses. Often, faxes don't come through, multiple offices fax the same information to multiple other offices and ... So, whose interest do exclusive brokers who are not on MLS have in mind?

Last Large Southampton Village Lot Bought for Development

Robert Gianos (Bobby G) has formed East End Properties, Inc and has finally bought the 50 acre parcel of land at the corner of Wickapogue & Old Town Roads in Southampton Village from the 'Queens lady'. He has been lusting after that parcel for almost 5 years.Gianos says plans to build up to 10 homes on larger 4-8 acre lots, like they used to do in the "old days".

Want to be "in" by summer?

Here on the East End, those who want to "be in by summer" are starting to put a little 'spring' in their step. The high-end rental market has been quite healthy since the first of the year and now sales, which did see quite an ebb in January and February, are coming back. Buyers know it will typically take 60- 90 days to close on a property once contracts are signed so, let's see.... today is March 15. 60 days from now is May 15 and 90 days is June 15. Memorial Day falls on Mon May 29 this year.

The state of the hamptons

The talking heads on CNBC’s Power Lunch are discussing how interest rates are up to their highest level since 2003. There has been so much babble about “the bubble” that all of a sudden, real estate people are looking for other things to talk about, afraid that if someone else confirms that “business is slow” they will have to face the fact that perhaps the “irrationally exuberant” days of the real estate market, where every bartender, hairdresser and “retired” stockbroker got their real estate license and made money just for passing the mirror test, may be winding down. Winding down? Well, at least quieting down a bit. Nationally? Everywhere? Even in the Hamptons? It seems that there is a feeding frenzy on bad news about real estate. During a recent real estate convention in New York, one of the senior managing directors of a top firm theorized that all this talk about ‘the bubble’ is a conspiracy by the media to reduce prices because reporters don’t get paid enough and most of them couldn’t afford to buy homes. Pretty far-fetched, but I must admit, the thought crossed my mind.

Here are a few facts, according to Long Island Profiles Publishing Company, publisher of real estate sales information in Nassau and Suffolk Counties.

The yearly number of properties sold (both homes and land purchases) in East Hampton and Southampton Townships which many consider to comprise “The Hamptons”:

Year -- # Sales - Total $ Volume - Avg $ Price -- Median (est.)
2002 -- 3641 -- $2,406,044,590 -- $ 660,820 -- $ 415,000
2003 -- 3384 -- $2,727,082,500 -- $ 805,875 -- $ 505,000
2004 -- 3942 -- $4,002,921,884 -- $1,015,454 -- $ 635,000
2005 -- 3408 -- $4,447,505,182 -- $1,305,019 -- $ 750,000

So, while the actual number of properties sold in 2005 was down nearly 16% from 2004, total dollar volume increased 11%. The average sales price was up 28% and median price increased approximately 18% (the median is the point at which half the prices are higher and half are lower). For a little perspective, the median price for real estate transactions on Long Island is $445,000 and for the US it is approximately $235,000.

Southampton and East Hampton Township quarterly results for the end of 2005 show reported number of sales during the last quarter were down nearly 25% from 2004, a fairly significant drop, considering that during the same period of time there has been an increase of about 25% in the number of licensed real estate sales associates. It’s getting to the point that if we don’t have any friends “in the business”, we probably don’t have too many friends.

So far for 2006, reports are sketchy and incomplete at best, but it appears that total number of sales reported for January and February are down slightly from a year earlier. Keep in mind that these reported figures often reflect business that took place at least 3 months earlier. Remember how long it took to close on your last property purchase or sale? My last closing happened five months after the seller and I agreed to the sales price. The property needed to be re-surveyed, then scheduled for an inspection by the building department for an update C of O (certificate of occupancy) and then one of the attorneys went on vacation. After the closing, the title company lost the paperwork and it took nearly a year to have the documents re-signed by all parties because the seller lives in Sweden. All that had to happen in order for the deed to be recorded by Suffolk County and the sale to be reported. So…this is not a perfect science.

Also keep in mind that the Hamptons is a very unique place where demand is not driven by corporate relocations and other traditional reasons for real estate purchases. This market is driven much more by emotion. How else could you explain the fact that we recorded 30 sales in 2005 over $10 million? And believe it or not, that super-premium market still remains the hottest segment on the East End. I just completed a search on HREO.com and it appears that there are nearly 100 properties listed for $10 million and above.