Island real estate market looking up

The Shelter Island real estate market experienced declinesacross the board in 2009 compared with 2008. But despite anextremely rocky start, sales started to bounce back in the secondhalf of the year. And that momentum may build as the 2010 salesseason warms up.

The Corcoran Real Estate group’s annual sales report stated thatthe firm sold 14 percent fewer residences on Shelter Islandcompared with last year, from 51 in 2008 to 44 in 2009. The averageprice of the houses sold was reduced too, from $1,473,000 in 2008to $978,000 in 2009, which is a 34 percent drop. The median priceof home sales fell 22 percent, from $976,000 in 2008 to $760,000 in2009. The total dollar volume of the homes Corcoran sold dropped by43 percent, from $75,140,000 to $43,027,000.

These trends were hardly unique to Shelter Island. Corcoran sold25 percent fewer residences in total in 2009 than in 2008 on theEast End of Long Island (defined as the area between Remsenburg andMontauk). Drops in the three other categories were not as severe asthe Island’s: the average price of homes sold dropped 6 percent,from $1.429 million in 2008 to $1.34 million in 2009; the medianprice fell 8 percent, from $733,000 to $678,000; and total dollarvolume dropped 29 percent, from $2.823 billion to $1.992billion.

Melina Wein of M. Wein Realty noted that a large percentage ofIsland homes that her brokerage sold were below assessed value. In2009, well over half of inland and waterfront homes sold at undertheir assessed values. Barely any of either type sold for underassessed value in 2008. “Maybe everything’s been put more intoperspective, she said, adding “we have seen owners who want to sellbe more flexible – more realistic.

There’s no doubt that real estate sales in 2009 started offslow. Penelope Moore of the Corcoran Group described last winter’sShelter Island sales as “virtually non-existent.

Things started to pick up into the spring and summer, eventhough a great deal of Corcoran’s house sales also had to be pricedbelow assessed value in order to sell. Ms. Moore noted that betweenMemorial Day and July 4, Corcoran sold many Island waterfront homeswith “relatively strong selling prices, although a lot of theseproperties still sold for 25 percent less than homes did in 2007.Brokers John Quigley and Janalyn Travis-Messer of Griffing andCollins Real Estate also identified waterfront homes as a strongsector of the 2009 market.

Ms. Travis-Messer, Mr. Quigley and Ms. Moore all observed thatthe higher and lower ends of the housing spectrum sold well on theIsland. Ms. Moore cited homes priced below $600,000 as having hadgood activity, including several homes that closed in the $300,000range. “Properties in [the $300,000] category two to three yearsago were very hard to come by, wrote Ms. Moore.

Mr. Quigley and Ms. Travis-Messer noted that sales in the thirdand fourth quarters of 2009 were much stronger than the first halfof the year, and that “properties priced correctly moved.

Shelter Island’s rental market was still active in 2009, but wascharacterized by more short-term rentals than summer-long rentals.Ms. Wein said that “people who have traditionally been renting forthe entire summer or for two months went down to only a month. Wehad a lot more calls from people saying, Ë”I’d like twoweeks or three weeks’ as opposed to a full season. Ms.Travis-Messer and Mr. Quigley also noted a demand in 2009 forweekly or half-month rentals.

Ms. Wein mentioned that renters have come to expect homeownersto be more flexible. Ms. Moore wrote that since it was a renter’smarket this season, there were more instances of rentersnegotiating for perks. One such perk, in the cases of rental homesthat were also on the market to be sold, were “no-show agreementsthat prohibited a broker from showing the home to potential buyersduring the period the house is rented.

Foreclosures in Suffolk County increased dramatically. Thenumber of lis pendens (foreclosure) filings in 2009 reached 11,662,up from 8,473 in 2008, a 27 percent increase.

How will the market perform in the future? The Corcoran reportnoted that “significantly increased sales volume in the fourthquarter shows encouraging signs of an improving market as we enter2010.

Ms. Wein commented, “I believe last year turned out better thanI would have guessed, but I think we have a ways to go until we seewhat we did [before the downturn]. And Ms. Moore concluded, “Andthere are still those homeowners who are waiting for the market toreturn to the heady days of the boom two-plus years ago. They maybe waiting a long time.