What a number of Island real estate professionals called “shocking” was news that the Community Preservation Fund (CPF) numbers — a good indicator of sales — for the first five months of 2018 were down by 41.3 percent from the same time last year, while numbers for the CPF on most of the East End are increasing.
That means that Shelter Island, which brought in $800,000 from CPF revenues for the first five months of 2017, netted only $470,000 for those months this year.
The correlation between the CPF and the real estate market is that first-time buyers of property pay a 2 percent tax on their purchases, which is used to buy open space to preserve and fund some water quality improvement projects here.
Southampton joined the Island as the only East End town to see a decrease in its CPF funds and its drop was by only 4.4 percent from last year, bringing in $22 million so far this year.
The other three towns saw increases with Southold up 15 percent; East Hampton up by 21.5 percent; and Riverhead up a whopping 54.7 percent.
Most Island real estate professionals agreed that it has been a slow start in 2018 and don’t see signs of a quick turnaround.
“It’s the unknown,” said Melina Wein of M. Wein Realty. Between changes occurring locally and those in the wider world, potential buyers are cautious, Ms. Wein said. “The proof that things are not moving is the 2 percent money not coming in,” she said, referring to the CPF revenues.
Even through CPF revenues tend to lag the market by a few months, this year it’s reflecting what Ms. Wein is seeing currently.
“Money — they don’t want to part with it,” said Susan Cincotta of Daniel Gale/Sotheby’s International Realty. “Buyers are looking a little harder and a little longer” because there’s less disposable income around.
Nonetheless, Ms. Cincotta expects to see an uptick by the end of the year.
One trend she’s seeing this year is buyers looking at properties on the North and South forks as well as on the Island. In the past, most of her buyers were focused on being able to purchase property here.
The changing tax laws also have people hesitant about major purchases, Ms. Cincotta said.
She and others have seen a strong rental market but not enough inventory to satisfy demand.
“It does look like it’s been a quiet year,” Saunders’ Penelope Moore said, attributing part of it to the foul weather that persisted through the spring. She has had to work harder dealing with houses in the upper price range where it’s tough to bring buyers and sellers together on price.
“Sellers want to hold their number and buyers want to get a deal,” Ms. Moore said.
The generally optimistic Ms. Moore said it would take just a few high-end property sales to turn CPF numbers around. But what she’s seeing is more inland, moderately-priced houses selling.
With mortgage rates rising, albeit slowly, she tries to tell potential buyers that rates aren’t likely to drop.
“To those who want to wait it out, you may have to wait for another recession,” Ms. Moore said.
“I don’t see anything coming down the pike,” Georgiana Ketcham of Georgiana B. Ketcham said. “People are holding their cards close to the vest,” she added, noting that there are many people looking for rentals and many “tire kickers” looking to buy, but not ready to put down their money.
Some potential buyers have expressed concerns to her about costs associated with changeovers to nitrogen-reducing septic systems. Even with Suffolk County and Shelter Island offering grant money for new or upgraded systems, there are still worries about how much homeowners have to lay out and how it will affect their taxes.
And there has been talk about mandates for improved septic systems of any turnover of a property to a new owner.
But Ms. Cincotta sees the push for improved septics as a plus because one factor that attracts buyers here is the concern for protecting the environment.
“Crappy,” is how Janalyn Travis-Messer summed up the market so far. People are “scared” about the economy holding steady, increasing mortgage rates and some sellers are pricing their properties too high, she said.
She, too, is seeing many renters in the market and said the new prefabricated house on North Ferry Road constructed by her DJTM Enterprises is already rented, as are other rental properties she has had.
As for purchases turning around? “Not right away,” Ms. Travis-Messer said.