Grim Forecast, Low Sales in Real Estate
(7/31/2008) Reports indicate that second quarter house sales and prices dropped significantly on the East End since the same time last year, reflecting a tougher economy and a trend that brokers have become all to familiar with. Since early in the decade, when the market peaked, the business has seen a steady decline.
George Simpson, who tracks real estate data on the East End through his business, Suffolk Research Service, on July 13 released a dreary series of charts and graphs detailing the slowdown. They can be seen online at www.suffolkresearch.com.
According to Mr. Simpson, sales volume in East Hampton Town dropped 41 percent since last year’s second quarter, and median prices dropped by 11 percent.
While it appears that median prices on the East End are stabilizing and dropping nearer to where they were in 2006, overall sales have taken a hard hit, offering brokers a grim forecast. More than $1.2 billion in real estate transactions went through in the second quarter of 2007. This year, the number slumped to $860 million. The number of unit sales dropped from 815 to 576.
There has been a steady decrease in unit sales since 2004, and East Hampton Town appears to have been hit the hardest, followed by Southampton Town. In 2004, 311 sales closed during the second quarter in East Hampton. This year, there were only 120, a 61-percent drop. Southampton sales dropped by 56 percent.
On Shelter Island, however, the median house price has increased dramatically since last year — by almost $300,000 — and total dollar sales dropped negligibly compared to the second quarter of 2007, by 4.2 percent. Mr. Simpson suggested that the island displays “the most promising market indicators” of the five towns on the East End.
Based on Mr. Simpson’s math, if there are 2,000 licensed real estate agents on the East End, they are selling an average of “a little over one house a year.”
Judi Desiderio, the chief operating officer at Town and Country Real Estate, releases her own quarterly reports, but tends to wait until all of the closings posted in June trickle in before she crunches the numbers. The final reports came out on Tuesday afternoon.
“The charts clearly show a significant decline in the number of sales, as well as the total sales volume,” she said in a release sent to The Star on Monday.
Ms. Desiderio’s numbers show percentage changes for separate price levels in specific geographical areas, which reveal a clearer picture of how the market is changing.
For example, in the East Hampton area, including Wainscott, her preliminary figures suggest that the number of house sales has gone down nearly 42 percent since the second quarter of 2007, and that the total sales volume has decreased by 54 percent.
Sales in the $2 million to $3.49 million range suffered the most, dropping by 67 percent, or from 21 sales in the second quarter last year to only 7 as of this week.