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t has often been said that the East End lags a recession and leads a recovery, but 2009 was nonetheless a more tumultuous year for local real estate than many bargained for.
One of the positives that most of the top agents and brokers in the local real estate trenches agreed upon was that with tough times come valuable lessons, and even more so in an economy so dependent on the buying and selling of property. So what else do the East End’s real estate movers and shakers have to say about the state of the market today?
Without all of the facts and insider knowledge, divining a clear answer in a murky market might be tough, so Residence decided to go straight to the experts, posing the same five questions to each to discover what they had to say about this past year and to find out their predictions for the time to come.
A: It was a lot like running through molasses while a crowd of people yelled varying messages regarding the real estate market. That’s the best way I can describe it. It took longer to get anything accomplished and quality information was difficult to obtain as you had to sort through the tons of information being thrown at you from buyers, sellers, the media and actual hard data. Synthesizing that into something workable in which to guide buyers and sellers was challenging to say the least. I think we all learned a lot, but I can’t say I am sad it is 2010.
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: The recession certainly shook things up for everyone. It has forced me to go outside the box in many facets of my business. You can’t be a warm body in this market. If you are waiting for your phone to ring, you might as well take a trip to the tropics and enjoy yourself.
In this market you have to work to keep yourself constantly informed on what is happening today. The market changes by the day now, so information is key. If you are using data on homes that just closed in order to price a home or guide a buyer, you are already too far behind. In a way it has been great because it has forced agents to sharpen their skills.
A: At the end of the day this is the Hamptons and people will always want to be here regardless of what is happening in the world’s economy. There is nowhere else this close to New York City, with its concentration of wealth and talent, that is this unique and beautiful.
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: Be realistic and educate yourself. If you are selling you need to know today’s value of your home. Learn your direct competition and how you look against them to a buyer. Selling a home is an emotional undertaking, but this isn’t an emotional market. Buyers need to see the value or they simply won’t buy.
If you are buying a home, you need to educate yourself so you understand the true value of each home. An asking price is not a good barometer for making an offer. Some homes are priced below today’s market value whereas some in the same price range are priced well above it. If you come in thinking that because the market has declined by a certain percentage that you are going to make an offer based on that general percentage, you aren’t making an educated offer. There is a window of time for buyers to secure their deal in the Hamptons. If you play games with completely unrealistic offers, you will lose that window.
A: I am busier than I have ever been in my career. That doesn’t mean the market is back to where it was before the recession but activity is high.
My prediction: Prices will continue to stay steady for a while until the world has a chance to catch its breath. Interest rates are still at an all-time low. As a result, buyers will continue to come out in force hoping to take advantage of a market where home prices are rational and sellers are realistic. There is a real window of opportunity here and I don’t know how long it will last. You can’t live in your stock holdings or walk to the beach from your mutual funds.
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: Although 2009 certainly wasn’t one of the strongest years in real estate on the East End, it showed that well-priced properties still sold. Especially toward the end of the third quarter, we saw that a more realistic view on the part of both buyers and sellers led to many closings.
A: In an uncertain market both buyers and sellers look toward the broker for reassurance and advice. The buyer needs to be assured that he is making a sound investment and needs a knowledgeable broker to guide him through the financing. The seller depends on a good broker to determine the right price for his home and to provide him with the most effective marketing strategy.
A: One of the most important lessons learned from the volatility of recent markets is that there are opportunities at either end. The trick is to remain levelheaded in a hot real estate market and to make sound real estate investments so that there is enough liquidity to either sit out a downturn or to take advantage of good deals. People with short-term memory end up losing money.
A: Buyers need a knowledgeable broker to find the home that is right for them. Brokers with a sound understanding of the market, knowledge of the local environment and careful listening skills are essential for a successful relationship. Sellers should engage a broker who can most effectively market their homes.
A: 2010 will see an improvement over the last year, although we should not expect sales to get back to pre-recession levels soon.
A: 2009 for me was an exciting time in real estate. There were some unfortunate events forcing some sellers to take losses on their homes, or even forced individuals to list their summer homes for sale when previously they would never sell. There were bargains in the marketplace both south of the highway and north that will never be seen again.
2009 started in turmoil, however as the year progressed it became my best year in real estate, both financially and in recognition. Buyers predicted the fall and were waiting in the sidelines for the deals to hit the street. However I am sure some who were waiting for the deals also were hit with the downturn and will probably rent again for another summer.
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: It has made me a little more conservative on my building projects. I now look for better deals and am more patient on making a transaction.
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: I have learned that I need cash on hand for deals that may arise. I have also learned that the premium locations always hold their value in a downturn.
A: My advice is to be realistic in both pricing and buying a home. It is a new era for real estate. I feel strongly that the market has rebounded but there is still a disconnect between buyers and sellers. The sellers feel the market is weaker and want to wait for it to come back, the buyers are still looking for deals. Somewhere in the middle makes the trade.
A: Unfortunately, I believe it will remain steady at current levels. I do not see bidding wars or overpriced offers being made.
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: Pleasantly surprised! At this time last year the pundits were predicting lots of gloom and doom eliciting a huge fear factor for everyone in the industry. Fortunately, the year turned out to be very strong for Prudential Douglas Elliman as a company.
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: The recession has brought a new skill set into the marketplace for successful brokers: Listening to your clients and customers. Oftentimes understanding what is not being said is more important than what is being said.
A: The ups and downs of the market are inevitable and you have to adjust to where the market is not where it was or you want it to be!
A: For the seller: Price your property correctly and be willing to negotiate an offer with patience and flexibility. For the buyer: If you see something that is priced right don’t over negotiate the deal. The market conditions are the best they will be for years to come.
A: If I had a crystal ball I think it would say that is should be a good rental season with mediocre first and second quarters in sales and good sales in the third and fourth quarters. That’s if I had a crystal ball!
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: It was a tough year.
A: I have to be much more diligent and hardworking than ever before. It’s extraordinary, the questions we get from buyers and owners—everything is more fact-based, less emotion. Sellers are seeking a reasonable sale and buyers are seeking a discount.
Trying to close a deal today can be frustrating. One has to be very patient and creative.
A: To stay focused, knowing that we live and work in cycles. And if one is patient, we know the market will turn around.
A: If one wants to sell, one has to price point the house correctly. That is most important. It’s all about price. For buyers, I recommend looking for the good deal. For the broker who takes a buyer out, take them to their desired location. Also know the discounted properties and identify those properties where the owners are keen to move on.
A: Favorable. I think the outlook from all venues is positive, but conservative. People are making somewhat more money, but since it’s harder earned, it’s harder to spend. Everyone wants to know that they are getting value for their money.
A: From the abyss to a healthy market. The first quarter was the abyss and the fourth quarter was the healthy market.
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: It has opened opportunities which otherwise may not have arisen.
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: After nearly 30 years in this business on the East End, and having spent some of that time as a partner at Cook Pony Farm, I feel I was prepared for inevitable ups and downs. Though every market change is different and this correction was deep, there were some similarities to the market following the ’87 crash.
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: To a seller: If the time is right for you to sell now, then hire a knowledgeable broker with experience in good and bad markets who will substantiate their advice with tangible comparables and demonstrate an optimum marketing plan. To the buyer: Pull the trigger now or you will be one of the many who will be kicking themselves later.
A: Tons better than 2009. But a long way from the top.
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: Mr. Toad’s Wild Ride! Scary along the way, but there was light at the end of the tunnel.
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: I have been selling real estate in the Hamptons for 30 years and each recession has taught me tough business lessons. I decided to join Saunders & Associates in early 2009 because I feel it is more important than ever to be aligned with a forward-thinking brokerage and to be supported by highly talented marketing and administrative professionals. I believe it was a very wise move, since I have had a highly productive year.
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: That we are truly lucky to live in an area that once again has proven itself to be resilient enough to rise above the national curve and recover from recession expediently. We are not recession-proof, but have a real estate market where the demand is a constant and always evident.
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: This past year has created an amazing opportunity for savvy buyers and investors. Many have been in the wings, waiting for a market correction to be able to purchase fantastic properties. Sellers need to be realistic in their pricing, as it is all about value in this volatile market. Representation and marketing is even more important than ever.
A: 2010, I believe will be a time to exhale! Step back, reevaluate and enjoy a steady, smooth climb back to a favorable market for all!
Dawn Watson on Feb 8, 2010