Much like other areas of the region, the East End of Long Island showed a dramatic uptick in real estate sales activity in the second quarter of 2009, but was still far weaker than last year, according to a market report released today by Prudential Douglas Elliman.
Median sales prices on the East End fell 16.8 percent to $680,000 in the second quarter of 2009, from $817,500 in the same period last year, according to the report, while average sales prices fell 11.3 percent to $1,284,486 from $1,447,923 in the prior-year quarter.
The number of sales dropped 43.3 percent to 307 from 541 in the second quarter of 2008, the report said. In an encouraging sign, however, that represents a 52.7 percent leap from 201 sales in the first quarter of this year.
Andrew Saunders, the president of Hamptons real estate firm Saunders & Associates, said his firm started to see “a real turn of the market” in the beginning of March.
“The first quarter of the year was frightening, very tepid,” he said. “More importantly, we really lacked clarity about the future.”
The outlook has improved somewhat since then, with the stock market rallying and consumer confidence growing. The real estate market, in turn, started to see more sales.
“We really started to see conviction return to the market among those people who had been on the sidelines for the past year and a half, expressing an interest in seriously moving forward on acquisitions,” he said. Since then, the company has executed a number of contract signings and closings, he said.
Jonathan Miller, the president and CEO of appraisal firm Miller Samuel and the preparer of the report, said low interest rates and some elements of the stimulus package are helping to bump up home sales throughout the New York region.
For example, Elliman’s Long Island second-quarter market report, also released today, showed that the number of sales jumped 37.7 percent to 3,956 from 2,872 in the prior quarter, though sales volume declined 32.7 percent to 3,956 from 5,874 last year. Sales increased 28.2 percent from the previous quarter in Manhattan, 20.5 percent in Brooklyn and 6.9 percent in Queens.
“Every market saw an increase from the prior quarter, and that’s because the impact [from external factors] was universal,” Miller said.
Low interest rates, first-time homebuyer tax credits, and an increase in conforming loan limits for Fannie Mae and Freddie Mac all helped stimulate home sales in the second quarter, he said.
“From September, there’s been lots of activity on the federal level to drive the consumer’s trust toward making purchases again,” he said.
Still, statistics show that the recovery has a long way to go, with dramatic drops in sales volume and prices from last year at this time.
In the Hamptons, the median sales price in the second quarter fell 20.6 percent to $770,000, from $970,000 in the same period last year, while the number of sales declined 34.4 percent to 231 sales from 352 in the same period of 2008. On the North Fork, median sales prices fell 25.6 percent to $450,000 from $605,000 in the same quarter of last year. Sales volume there sank 59.8 percent to 76 sales in the prior-year quarter.
Experts agree that despite recent improvements, the real estate industry is hobbled by the continued credit crunch, which makes home mortgages difficult to come by.
“Securing financing continues to be difficult,” Saunders, whose firm recently formed a partnership with Manhattan firm Warburg Realty, said. “That is the critical issue that has got to get resolved right now to really make this market continue in a positive direction.”
Miller said while the stimulus package is “getting the wheels turning,” recovering from the damage caused by this fall’s Wall Street meltdown will be a slow process.
“We’re nowhere near where we were a year or two ago,” he said, adding that the current uptick is “a step in the right direction, but it doesn’t suggest a turnaround in the immediate future.”