For investors who buy and sell properties they don't live in:
REALTOR Magazine Online -Daily News- Tax 101 for Home Flippers
Saturday, April 29, 2006
How Much Home $1 Million Buys
Check out this $1.1MM listing in the Hamptons, then check out the Forbes Article:
VILLAGE CAPE; MOVE-IN CONDITION
Looking for an affordable, renovated home with privacy and walking distance to Sag Harbor Village? This new-to-market Cape Style home offers just that with 4 bedrooms, 2 baths, a 20x40 heated pool, wide plank flooring, central air, a formal living room, eat-in kitchen. Bright and spacious rooms with a large backyard and porch area. Landscaping to be completed soon. Partially finished basement as a Bonus! Home is also for rent for the Summer season. $1,100,000.
How Much Home $1 Million Buys - Forbes.com
VILLAGE CAPE; MOVE-IN CONDITION
Looking for an affordable, renovated home with privacy and walking distance to Sag Harbor Village? This new-to-market Cape Style home offers just that with 4 bedrooms, 2 baths, a 20x40 heated pool, wide plank flooring, central air, a formal living room, eat-in kitchen. Bright and spacious rooms with a large backyard and porch area. Landscaping to be completed soon. Partially finished basement as a Bonus! Home is also for rent for the Summer season. $1,100,000.
How Much Home $1 Million Buys - Forbes.com
Wednesday, April 26, 2006
Good News/Bad News?
Depends on your client base. If they are mortgage interest rate-sensitive...
New York Times
Key Economic Measures Jumped in March
By VIKAS BAJAJPublished: April 26, 2006
Two key measures of housing and manufacturing activity jumped sharply in March, the Commerce Department reported today, indicating that the economy ended the first three months of the year with a roar.
A 13.8 percent increase in sales of new homes and a 6.1 percent jump in orders for durable goods signal that the economy, which had built up momentum in the first two months of the year, picked up even more speed last month. The reports indicate that, at least as of last month, the economy had shrugged off the burden of higher energy prices and interest rates, which many economists believe could significantly slow the economy later this year.
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Estimates on economic growth will play a critical role in shaping the actions of Federal Reserve policy makers, who have signaled that they will raise their benchmark short-term interest rates at least once more, to 5 percent from 4.75 percent, on May 10. The Fed has indicated further increases will be determined based on economic data.
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New home sales rose to an annual pace of 1.21 million in March, up from 1.07 million the month before and 1.2 million in January. Sales were strongest in the West, where they jumped 35.7 percent, and weakest in the Northeast, where they rose 4.7 percent.
But compared with last year the housing market has already weakened noticeably — sales were running at a pace of 1.31 million in March 2005 — and there are signs that sales and prices could lag further later this year. The median price — half the homes sold for more and half for less — slipped 2.2 percent from a year ago, to $224,200. And the number of homes on the market increased by 24.4 percent over the last 12 months, to 555,000; at the current sales pace it would take five and a half months to sell those properties.
The increase in inventories is the biggest in 33 years, and the drop in prices is the worst since January 2003, noted Ian Shepherdson, chief United States economist at High Frequency Economics. Sales "are going to drop in the next couple of months," he said, noting that mortgage applications, an early indicator for the housing market, were falling.
Mortgage applications fell 3.7 percent last week and were down 22.4 percent compared with the corresponding week a year earlier, the Mortgage Bankers Association of America reported today.
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New York Times
Key Economic Measures Jumped in March
By VIKAS BAJAJPublished: April 26, 2006
Two key measures of housing and manufacturing activity jumped sharply in March, the Commerce Department reported today, indicating that the economy ended the first three months of the year with a roar.
A 13.8 percent increase in sales of new homes and a 6.1 percent jump in orders for durable goods signal that the economy, which had built up momentum in the first two months of the year, picked up even more speed last month. The reports indicate that, at least as of last month, the economy had shrugged off the burden of higher energy prices and interest rates, which many economists believe could significantly slow the economy later this year.
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Estimates on economic growth will play a critical role in shaping the actions of Federal Reserve policy makers, who have signaled that they will raise their benchmark short-term interest rates at least once more, to 5 percent from 4.75 percent, on May 10. The Fed has indicated further increases will be determined based on economic data.
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New home sales rose to an annual pace of 1.21 million in March, up from 1.07 million the month before and 1.2 million in January. Sales were strongest in the West, where they jumped 35.7 percent, and weakest in the Northeast, where they rose 4.7 percent.
But compared with last year the housing market has already weakened noticeably — sales were running at a pace of 1.31 million in March 2005 — and there are signs that sales and prices could lag further later this year. The median price — half the homes sold for more and half for less — slipped 2.2 percent from a year ago, to $224,200. And the number of homes on the market increased by 24.4 percent over the last 12 months, to 555,000; at the current sales pace it would take five and a half months to sell those properties.
The increase in inventories is the biggest in 33 years, and the drop in prices is the worst since January 2003, noted Ian Shepherdson, chief United States economist at High Frequency Economics. Sales "are going to drop in the next couple of months," he said, noting that mortgage applications, an early indicator for the housing market, were falling.
Mortgage applications fell 3.7 percent last week and were down 22.4 percent compared with the corresponding week a year earlier, the Mortgage Bankers Association of America reported today.
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Golden Pear Cafe Opening in Sag Harbor
Keith Davis, owner of the three existing Golden Pear Cafes here in The Hamptons, is adding Main Street in Sag Harbor to his Southampton, East Hampton and Bridgehampton locations. The GPC is moving into the former deli location between Sylvester & Co and Latham House Clothiers.
Believe it or not, some locals have expressed their dismay about a "chain" coming to the village. I consider that taking NIMBYism to the extreme. Keith has been operating his cafes here in The Hamptons since 1987: http://www.goldenpearcafe.com/gpcabout.html
Look for a May 20th opening.
Has Hamptons Real Estate Become a Data-Dependent Business?
It's getting to the point where one can anticipate with relative certainty the day-to-day ebbs and flows in Hamptons real estate activity based upon what data comes out of the hundreds and hundreds of market reports (if you know what to look for).
The number of residential sales is down slightly from last year, but rental numbers are up. The rise in interest rates is taking a bite out of the buy-vs-rent advantage, and since rentals have been down in recent years, rental prices have not appreciated nearly as much as sales prices have (that is, of course, with the exception of the super-premium high-end rentals which have appreciated exponentially). Ten years ago, the rule of thumb for summer rental prices was 10% of value. With that formula, a $1MM home would rent for $100K for Memorial Day to Labor Day, a $500K would rent for $50K, and so on. Today, that percentage has gone to as little as 4%-5%, even lower in some cases. With an average sales price in 2005 of over $1MM, the average rental price has not kept pace. In addition, a good percentage of buyers during the last few years used to be renters, so not only were they taking themselves out of the rental population, but many of them were also buying with the intent of renting their new purchase for part of the year to cover their "nut". It's worth noting that many of them took out 3/1 or 5/1 interest-only ARMs and are now cringing with every interest rate increase.
So, back to the day-to-day data. If the DOW, NASDAQ, and S&P are up today, business will be a little off tomorrow; this is because for many, Hamptons real estate purchases are competing with their investment dollars. Conversely, if oil/gas prices are up today, then Hamptons real estate will be busy tomorrow, because we are close to one of the most highly-populated markets in the US. Besides, if worse comes to worst, they can leave the gas guzzler at the summer house and take the Jitney back and forth (or, God forbid, the LIRR).
The DOW just hit a six-year high, and some will celebrate this weekend by buying that house they've wanted in The Hamptons (maybe they won't even wait for the weekend). Stay close to your Blackberries! Additionally, March's National Housing Sales report was up - that should give sellers a little more bravado. Buyers will be out this weekend and maybe even take Friday off to hit the market early.
The dollar has weakened today! Let's call our foreign customers and tell them the good news! The house they want is now another 2% discounted with their Euro.
The dollar strengthens tomorrow! Let's call our foreign clients and tell them we have a buyer for their house!
I've got to remember to send in that donation to RPAC today, because if the Democrats get control of the House and Senate, causing the next capital gains reduction vote to fail in 2008, then what?!?
Tuesday, April 25, 2006
Monday, April 24, 2006
Affordable Housing on the East End
Real Estate is the talk of the town here in The Hamptons. We love to talk about how much homes have appreciated and who bought what and who sold where. There is, however, an underlying issue that must be addressed:
The Southampton Press
Thursday, April 20, 2006
League To Screen Housing Documentary
A family on the South Fork of Long Island earning the current median annual income of $88,850 can afford to purchase a home for $280,000, according to the League of Women Voters of the Hamptons. But the current median home price on the South Fork is $600,000—and rising. The impact of that “affordability gap” is the topic of a new documentary produced by the League called “Trouble in Paradise: The Affordability Housing Crisis on the South Fork.” Special screenings of the documentary will take place later this month—April 29 at 10 a.m. in the auditorium of Southampton High School, and May 6 at 10 a.m. in the auditorium of East Hampton High School. The showings will be free of charge. The film features testimonials from town officials and department heads, business leaders, and medical professionals, as well as local citizens in need of affordable housing, according to a press release issued by the League. Creator and executive producer Barbara Jordan of East Hampton is a past co-president of the League, and she headed the group’s five-year study of the affordable housing issue. Ms. Jordan is serving a five-year term on the town’s Housing Advisory Board, which advises the Town Board on the use of affordability housing funds, and Housing Authority Board, which manages the town’s affordable housing apartments. The film was made with funds provided by the towns of East Hampton and Southampton, the Donald and Barbara Zucker Foundation, Bridgehampton National Bank, and individual benefactors. All who attend the showings will receive a free pamphlet with further information on the issue. For more information, visit the League’s website at www.lwv-suffolkcounty.org/ Hamptons.htm.
Also see NEW YORK TIMES NEW YORK REGION / NEW YORK/REGION SPECIAL April 23, 2006 Long Island Journal: East End Blues: Working Hard and Unable to Buy a Home By MARCELLE S. FISCHLER BY day, Shawn Beyer teaches English as a second language at Sag Harbor Elementary School. By night, she teaches adults. Her fiancé, Dan Mitchell, works as a chef. Between them, they earn $70,000 a year.
The Southampton Press
Thursday, April 20, 2006
League To Screen Housing Documentary
A family on the South Fork of Long Island earning the current median annual income of $88,850 can afford to purchase a home for $280,000, according to the League of Women Voters of the Hamptons. But the current median home price on the South Fork is $600,000—and rising. The impact of that “affordability gap” is the topic of a new documentary produced by the League called “Trouble in Paradise: The Affordability Housing Crisis on the South Fork.” Special screenings of the documentary will take place later this month—April 29 at 10 a.m. in the auditorium of Southampton High School, and May 6 at 10 a.m. in the auditorium of East Hampton High School. The showings will be free of charge. The film features testimonials from town officials and department heads, business leaders, and medical professionals, as well as local citizens in need of affordable housing, according to a press release issued by the League. Creator and executive producer Barbara Jordan of East Hampton is a past co-president of the League, and she headed the group’s five-year study of the affordable housing issue. Ms. Jordan is serving a five-year term on the town’s Housing Advisory Board, which advises the Town Board on the use of affordability housing funds, and Housing Authority Board, which manages the town’s affordable housing apartments. The film was made with funds provided by the towns of East Hampton and Southampton, the Donald and Barbara Zucker Foundation, Bridgehampton National Bank, and individual benefactors. All who attend the showings will receive a free pamphlet with further information on the issue. For more information, visit the League’s website at www.lwv-suffolkcounty.org/ Hamptons.htm.
Also see NEW YORK TIMES NEW YORK REGION / NEW YORK/REGION SPECIAL April 23, 2006 Long Island Journal: East End Blues: Working Hard and Unable to Buy a Home By MARCELLE S. FISCHLER BY day, Shawn Beyer teaches English as a second language at Sag Harbor Elementary School. By night, she teaches adults. Her fiancé, Dan Mitchell, works as a chef. Between them, they earn $70,000 a year.
Sag Harbor Update - Bulova Watchcase Factory Re-Development
Finally, the largest building in Sag Harbor, which sits in the center of the village business district and has stood vacant and deteriorating for years, will get some much-needed attention. It just may turn into the Crown Jewel of Sag Harbor, perhaps the entire East End. See Sag Harbor Express Top Story of the week:
http://www.sagharboronline.com/20060420/news.htm
Sunday, April 23, 2006
Cook/Brinkley Bridgehampton Home Offering Repackaged & Reduced
CEO's Whale of a Deal in Nantucket
By TROY MCMULLENApril 21, 2006; Page W10
...Former model Christie Brinkley and her husband, architect Peter Cook, cut the size and asking price on a Bridgehampton, N.Y., listing, to 18.5 acres for $26.5 million, says their broker. The property was listed last summer at 20 acres for $30 million. (The couple combined the other 1.5 acres with an adjacent parcel and is selling those 3.5 acres for $2.5 million, the broker adds.)
The larger property includes a restored 1898 mansion, a five-bedroom guest house, a 75-foot heated pool, a tennis court and a greenhouse. The couple bought the property in 1998, public records show. Mr. Cook, a residential architect, restored the wood-shingle, 8,000-square-foot main house to include a two-story family room and stone terraces with ocean views. A 50-foot tower attached to the main house, dating from the 17th century, is said to have been erected by English settler John Gardiner.
Ms. Brinkley and her husband own several properties in the Hamptons and recently listed one in the nearby town of Watermill for $8.7 million. That renovated 1940s cottage sits on the ocean with four bedrooms, two baths and a fireplace. Lori Barbaria, of Prudential Douglas Elliman in Bridgehampton, has both listings...
Saturday, April 22, 2006
News From Other Waterfront Communities (Apr17'06)
Where the Buyers Aren't:Prices Ebb in Some Waterfront Locations
By June Fletcher From The Wall Street Journal Online
As real-estate prices surged across most of America, some of the biggest gains swept coastal resorts. Now there are signs the tide has finally turned.
http://homes.wsj.com/buysell/markettrends/20060417-fletcher.html
Friday, April 21, 2006
OK, OK! You Have Our Attention.
When is using the word "Bubble" exploitive? Check out a story in April 6, 2006 issue of The Southampton Press: http://72.32.16.161/Repository/ml.asp?Ref=U1BFLzIwMDYvMDQvMjAjQXIwMzkwMA==&Mode=Gif&Locale=english
Sag Harbor Follow Up (BBB)
As reported in the Sag Harbor Express, work began in earnest this week to start demolishing the big blue gas ball (Hortonsphere) that has stood at the corner of Long Island Avenue and Bridge Street for more than seven decades. It was 75 years ago this week, in fact, that the sphere was being built. Looks like a King Kong-sized hard-boiled egg, eh?
Unfortunately, due to ground contamination caused years ago under the BBB (Big Blue Bawl), neighboring businesses have been told that they will need to vacate their shop space soon to allow for clean-up. That has put several proprietors in a tough spot to find new locations. In particular, Harbor Pets is scrambling to find retail space in the Harbor.
Braden Knows Best
For any of you who don't read the NY Post regularly, Real Estate reporter Braden Keil again demonstrates that he knows more about what's going on in Hamptons Real Estate than anyone in the Hamptons does. Braden has always been plugged in to Hamptons goings-on, but fact is more NYC brokers than he knows are conducting business on the East End. It's inevitable that the best NYC brokers will eventually be the best East End brokers as well. Hello Dolly! Check it out at:http://www.nypost.com/realestate/62640.htm
Thursday, April 20, 2006
Spring Has Sprung...And So Have Sales
Spring selling season is upon us and activity has picked up. "March turned out to be a very good month", said Gioia DiPaolo from Corcoran Sag Harbor. "My listings are selling," she said. "And new listings are coming in!"
Robert Burke from Capstar Funding in Melville reports "I haven't been able to get out of the office before midnight this last week because we're so busy!" Capstar primarily lends on new home sales, and mortgage applications for new sales are exactly what they've got coming in.
Jeff Hunter, Par East Mortgage in East Hampton, has two "nice-sized" deals on his plate.
From New York, Richard Ferrari from PDE reports that "business hasn’t stopped in NYC! So far it’s a great year."
Wednesday, April 19, 2006
$185 Million Sounds About Right For Rennert Estate
Alberto Domingues, an Actuary from Atlanta states in his blog that the PBGC (Pension Benefit Guaranty Corporation - and yes, I had to look that up) is planning to put a lien on the Rennert oceanfront property on Daniel's Lane in Sagaponack. They value the estate at $185M. It's a tough comp, but I can't argue with that number. Check out Alberto's entry: http://pensionactuary.blogspot.com/2006/02/pbgc-may-take-rennert-hamptons-estate.html
Tuesday, April 18, 2006
Market up, market down...
...market, market all around. I'd like to think that I can usually predict what major moves in the financial markets will have on Hamptons Real Estate. After all, many clients and customers are movers, shakers and rainmakers on Wall Street. But numbers are coming out so fast and furiously, my head is spinning.
I like what Jonathan Miller on his blog MATRIX had to say about this subject:
http://matrix.millersamuel.com/index.php?p=562
Monday, April 17, 2006
Will This Weeks Housing Numbers Have Any Impact?
At the moment, the Dow is down 90 points. Homebuilder numbers are down. What will the housing report numbers coming out this week mean to us?
BUSINESS / YOUR MONEY April 16, 2006 Market Week: All Eyes on Housing Numbers By CONRAD DE AENLLE Investors will be examining retail and wholesale prices for signs of rising inflation, but they may scrutinize reports on the housing market even more closely.
Will Buyers Brokers Become More Common In This Market?
Buyers Brokers (designation for the NAR is Accredited Buyers Representative) are not very common here on the East End. But who knows what a more even market will bring?
REAL ESTATE April 16, 2006 In the Region Long Island: Brokers Who Represent Buyers By VALERIE COTSALAS A changing real estate market and savvier buyers have led some Long Island brokers to switch their allegiance to buyers.
A Healthy Riverhead Will Benefit Everyone
The town of Riverhead, at the end of the Long Island Expressway and the beginning of both the North and South Forks, has become the retail center for the East End of LI. Nearly every big box store, from BJ's Wholesale Club to Tanger Factory Outlet has opened outside the village there in the last 10 years. Unfortunately Main Street in the village has gentrified and many of the stores have closed. Several times over the last 10 years, local groups have had to rally to keep the Suffolk Theatre from destruction. Hey, Westhampton Beach successfully transformed their UA Theatre into a now-thriving Performing Arts Center. It would be great to see Riverhead do the same.
There are a couple of interesting proposals below:
REAL ESTATE March 5, 2006 In the Region Long Island: A Plan to Revive Downtown Riverhead By VALERIE COTSALAS Three private investment proposals could once again make Riverhead, N.Y., a Long Island entertainment and shopping destination.
Sunday, April 16, 2006
Saturday, April 15, 2006
Think Globally...Act Globally! Wake Up and Smell the Cappuccino!
Realty Times Article --Global RE
Real Estate Now Truly Global
Real estate is no longer a local or even national pursuit. It's now an international marketplace where investors from outside a country's borders are just as likely to own property as those living and working inside.
What are you doing to keep up with the changes?
Lew Sichelman has the details.Read the Full Story At: http://realtytimes.com/rtcpages/20060329_global.htm
Friday, April 14, 2006
Thursday, April 13, 2006
What's a few million?
So far, 2006 has been the year of the web-based home valuation uber-sites. Trulia.com, redfin.com and zillow.com are three getting a lot of press, both national and in the real estate trade pubs. Granted, Zillow is still a "beta" sight, meaning that they are constantly tweaking and changing things based upon user feedback. I sent them some feedback suggesting they hold off their "zestimator" for the East End until they figure out how to value this non-traditional market. This is not a suburb where home values can easily be determined by neighboring sales. For instance, the Mediterranean stucco house bought by former DougEl Chairman Alan Rogers on Main St in Sag Harbor is "zestimated" at $1.98M even though, after a terrific reno by Bob Tortora, it is now in contract for reportedly close to its $3.2M asking price. A waterfront property in North Haven currently on the market for $3.495M comes up at $1.5M on Zillow. Check your own house and see what you get.
Wednesday, April 12, 2006
Real Estate now has some competition for investors dollar...
Jonathan Miller's blog MATRIX captures the issue of how the financial markets are now getting some of the investment dollars that real estate has been enjoying the last few years.
goto: http://matrix.millersamuel.com/index.php?p=548
goto: http://matrix.millersamuel.com/index.php?p=548
RealNet Could Serve All East End Brokers, Agents and Clients and Customers
Nicholas Khuri and his wife Theresa, founders of HREO.com, have launched their RealNet Listing System, a customizable back-office database tool for realtors that interfaces with the public HREO.com site. HREO has served as the main portal for Hamptons Real Estate since 1995 and is the most widely used search site for real estate on the East End. In the last year, RealNet Solutions has signed up most of the major brokerages on the East End to its client list. Joining Allan Schneider Associates, which has been a long-term client, Brown Harris Stevens, Sotheby's and The Corcoran Group have all contracted for the program. And he's working with several other brokers at the moment. Agents almost universally think the program is great, and anyone who's worked out here knows it's a miracle to please agents with listing systems.
The neat thing about Real Net is that it could serve as an MLS-like tool for East End brokers. Khuri has the ability to allow brokers to share co-broke as well as broker open house info with each other electronically, which is a great improvement from the current fax-blast and email spamming techniques used by brokers for years (and outdated for years, too.) Changing the info on RealNet also instantly updates HREO.com and feeds can be set up with broker stand-alone websites to update their info as well.
This technology is currently available and Principals of the client companies have been told of its availability, but no one can seem to get the group to agree on how to share the info. There is no forum for this conversation. HANFRA (Hamptons and North Fork Realtors Association) is an organization that is trying to find its legs again after falling apart in recent years (I am a member) and many of the RealNet clients are not members. LIBOR (Long Island Board of Realtors- I'm a member here, too) has very little representation and even if they did, they would want to push the Long Island MLS System and not RealNet. So, where does this discussion take place? Or do we continue to sit here in the dark ages?
Remember the question: What is best for our clients and customers?
Saturday, April 01, 2006
The truth can "sting" a little, eh?
Straight shooter Barbara Corcoran - www.barbaracorcoran.com/ - founder and former Chairwoman of The Corcoran Group, which she sold to NRT, a division of Cendant in 2001, regularly appears on ABC, NBC, CNN and other national programs offering advice on Real Estate. Most recently, Barbara appeared on a segment called "What Your Broker Might Not Tell You" on ABC's Good Morning America on Friday, March 24, 2006. see transcript at http://abcnews.go.com/GMA/story?id=1759949
Her frankness has ruffled some feathers, including those of the National Association of Realtors who fired off a rebuttal. Fact is current Agency Law is so outdated and convoluted (at least in NY), that many clients, customers and even some agents don't understand it. There have been times during negotiations that I have found myself reminding the other agent where our "fiduciary responsibility" belongs. Perhaps it's time for more agents to become certified as "Buyers Brokers" in this market.
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