Real estate wrap-up 2009

It’s no surprise to anyone that the year 2009 was a tough one for real estate, both nationally and locally. But the big question remains: What will happen in 2010?

From most indicators, the East End market is in the final stages of self-correcting from the “bubble” of the mid-2000s, and slowly turning upward. Though the boom days are still most likely in the past, and perhaps the distant future, the overall number of single-family units sold in all five East End towns—Southampton, East Hampton, Riverhead, Southold and Shelter Island—continued to climb every quarter in 2009. According to information provided by Hampton Bays-based Suffolk Research Service Inc., the first quarter of 2009 saw 256 homes sold; there were 344 homes sold in the second quarter; 477 homes were sold in the third quarter; and 618 homes were sold in the final quarter of 2009.

Perhaps one of the best indicators that the economic slump is waning: comparing the numbers for the fourth quarter of 2009 to the numbers for the same quarter in 2008. In 2009, the 618 single-family residential units sold was significantly higher than during the same quarter of 2008, when 423 units were sold.

Local median sale prices are still low, compared to the 2007 heyday, just before the national housing market took a nosedive. The median home price in the last quarter of 2008 ($665,000) was still higher than any of the median home prices for 2009—$576,800 for the first quarter, $590,000 for the second quarter, $612,000 for the third quarter, and $630,700 for the fourth quarter.

However, due to the increased number of unit sales, the final quarter of 2009 showed the largest dollar sales of the last year—$790 million, to be exact. That compares to the fourth quarter of 2008, when there were $511 million in overall sales. The final quarter of last year was the culmination of a growing market throughout the year: the first quarter of 2009 saw $298 million in sales; the second quarter, $396 million; and the third quarter, $572 million.

The statistics are quite a bit bleaker, though, when taking a broader look at the history of real estate over the last five years. That’s when the downward trend becomes apparent for the five towns over the last two years.

In 2005, the median home price was $615,000; there were 4,144 units sold, resulting in $4.3 billion in total sales for the year. In 2006, the median home price rose to $660,000, but the unit sales were down by nearly 1,000 homes from the previous year, to 3,148, resulting in $3.9 billion in total sales. The year 2007 saw the top of the pricing bubble, with a median home price of $740,000, but there were fewer homes sold than the previous year, 2,867, so the total sales results for 2007 were $4.2 billion.

In 2008, the median home price dropped considerably, to $650,000, and there were 1,973 homes sold, resulting in $2.7 billion in total sales. In 2009, the median home price was at a five-year low, $605,000, and unit sales were also lower than ever before in that same span, 1,695, resulting in $2.1 billion in total sales.

The national foreclosure crisis also landed hard here on the East End, with the number of lis pendens, or pre-foreclosure, filings increasing 84 percent from 2008 to 2009, according to information provided by real estate market watch website propertyshark.com. In 2009, there was a total of 566 first-time residential lis pendens on the East End, from Remsenburg to Montauk, compared to 307 filings in 2008.

The lis pendens breakdown for 2009 included 135 lis pendens in East Hampton, with the average lien amount of $542,870; 108 lis pendens in Southampton, with an average lien amount of $503,867; 97 lis pendens in Hampton Bays, with an average lien amount of $398,005; 46 lis pendens in Sag Harbor, with an average lien amount of $584,101; 35 lis pendens in East Quogue, with an average lien amount of $382,872; 24 lis pendens in Westhampton Beach, with an average lien amount of $570,796; 20 lis pendens in Westhampton, with an average lien amount of $444,534; 19 lis pendens in Bridgehampton, with an average lien amount of $482,182; 19 lis pendens in Montauk, with an average lien amount of $478,920; and 18 lis pendens in Remsenburg, with an average lien amount of $663,671.

But it wasn’t all bad for the East End this past year. According a study published by BusinessWeek magazine in January, a number of East End villages made “The 50 Most Expensive Small Towns in America 2010,” list, including Sagaponack, which was listed as the priciest address in the United States.

Also making the cut of the top 10 most luxurious towns of less than 10,000 inhabitants were Water Mill, which was ranked number six, and Bridgehampton, which came in at number eight. Slightly further down the list, but still notable, were Wainscott, which came in at number 13, and Fishers Island, which was named number 24. Rounding out the list were Quogue, coming in at number 30; Northwest Harbor, close behind at number 32; East Hampton, number 42; and North Haven, number 48.