Does a very slight uptick in numbers for Shelter Island sales and rentals spell an economic turnaround? Yes and no, according to some of those who deal with the market daily.
The Real Estate Report, Inc. shows a slight increase in the number of sales in the fourth quarter of 2011 — 20 compared to 17 for the same period in 2010 and a tiny increase in sales for the year from 64 in 2010 to 65 in 2011.
“We’re not really in ‘05, ‘06 or ‘07,” Melina Wein said of the healthy real estate market before the 2008 Wall Street crash. “The recovery is going to take time.”
Because bonuses that enabled a lot of Wall Streeters to rent on Shelter Island and other East End towns have shrunk, the summer market is still tough.
“We are going to be okay,” Ms. Wein said. “But can you stomach the negotiation” that is going to ensue with potential renters? “It’s work — it’s good work,” she said about her job in this economy. “You plow through it, but everybody has to be willing to give.”
Many summer renters eventually seek to buy but “now it’s a longer conversion,” Ms. Wein added. In the past, renters often bought property after a summer or two here. Now many may rent for longer periods before deciding to buy.
Sellers need to be realistic about what their properties will fetch today, said Penelope Moore, senior vice president of the Corcoran Group. Citing the uptick reported by The Real Estate Report, Inc., she said that it was “still a buyers’ market” because sale prices are down. In 2010, the average sale price was $1.19 million on Shelter Island compared to $923,000 in 2011.
But there is a reason for optimism. “As the economic news show more positive indicators of recovery, more customers have come back to the marketplace,” Ms. Moore said. “Mortgage rates are still at an all-time low. The numbers bear that out on the Island. The lower end, under $1 million, have been most active in 2011.”
She released individual sales prices provided by The Real Estate Report Inc. for Corcoran sales showing that less than a third of properties sold in 2011 on the Island were priced at more than $1 million. Those that were priced below $1 million ranged from $410,000 to $999,000. As for the selling prices of properties above $1 million, they ranged from $1.03 million to $2.225 million.
Ms. Moore believes the market has bottomed out, noting that properties that were going for under $1 million last year are now just above $1 million. “If I were looking to buy, I would buy now.”
Another reason for optimism about a more active market ahead is that sellers are pricing properties more realistically today than they did soon after the stock market crash, according to Susan Cincotta at Daniel Gale/Sotheby’s.
“You have to list where the buyer sees value.” She said the same thing Ms. Moore did: “Now is a great time to buy.”
At the same time, she noted that people “think hard about living on an island.” While waterfront properties can often be had on Shelter Island for better prices than are found in the Hamptons, Island purchasers must make the decision they want what’s special about living here, she said.
Most East End real estate markets reflect a jagged line as sales go up and down, Ms. Cincotta said, but that hasn’t been so much the case on Shelter Island. She attributed the lesser market fluctuation on the Island to the fact that owners tend to hold on to their properties longer than they do in many other East End second-home communities. Houses often have been in the same family for generations.