Brokers Grit Their Teeth At Bad Buzz

Call negative real estate ‘spin’ self-defeating

By Kate Maier

(03/19/2009)    South Fork real estate professionals are bristling at national news stories about dismal market

Durell Godfrey

conditions this winter that they say have done nothing to help. 

    On Sunday, The New York Times Magazine printed “A Cold Season in the Hamptons.” The article profiled homeowners whose unrealistic expectations left their properties languishing at reduced prices, as well as a broker who goes door-to-door to peddle short sales, that is, to promote property sales for less than what the mortgage is worth.

    On Monday, Michael Daly’s Hamptons Real Estate blog pointed out that the number of pre-foreclosure filings on eastern Long Island last week was almost the same as the number of sales. Within hours, The Telegraph, a London-based newspaper, used those statistics to spin out a story titled “Hamptons Hit by Recession.” 

    And realtors are still reeling from “The Hamptons Half-Price Sale,” printed in The Wall Street Journal on Feb. 20.  After reading the story, “I wanted to rip my hair out of my head,” said Judi Desiderio, a self-described “eternal optimist” and chief operating officer at Town and Country Real Estate, which is based in East Hampton.

    “They choose the spin, and then they select the people who believe in what it is they’re trying to perpetuate,” she said.

     "The problem is this negative buzz is very self-defeating,” said Gary DePersia, who was interviewed for the Times article, which he called “unfortunate.”

    “All he took was the negative view of what was happening,” Mr. DePersia said of the magazine writer, Andrew Rice.

    “Considering how bad the real estate market is supposed to be, it’s amazing how many high-end properties are trading,” Mr. DePersia said. “There are deals that have happened, there are deals in the works. I think what you’re going to see is that in March or April there’s a fair amount of activity here.”

    Mr. DePersia, who recently sold his house in Amagansett for $4 million, said he was not at liberty to discuss the specifics of the deals “in the works.” The activity that he described has not yet been reflected in market reports. 

    The five real estate transactions listed in The Star this week occurred in or around January, except for one straggler from July. Winter is traditionally the slowest season for real estate, and agents are now reporting more phone calls, more appointments, and more activity that could mean more deals in the second quarter.

    Even so, these past few months have been “one of the slowest if not the slowest winter I think I’ve experienced in 27 years,” Ms. Desiderio said.

    Pat Ammirati is the president of the Long Island Real Estate Report, the Web service from which Mr. Daly gleaned his statistics about lis pendens, which are the first steps toward a foreclosure. “Yes, the number of lis pendens in early 2009 seemed a little high,” Mr. Ammirati said.

    The 16 properties for which lis pendens had been filed last week were scattered between Brookhaven and the North and South Forks. But a good chunk were close to home: two in East Hampton, two in Sag Harbor, two on Shelter Island, two in Southampton, and one in Bridgehampton. 

    Mr. Ammirati said, however, that it was difficult to compare the 16 lis pendens filed last week with the 21 transactions that were recorded, as transactions take about two months to be reported from the time of closing, while court filings are more immediate. Further, a new law passed in August of 2008 stipulates that lenders must wait six months before filing a lis pendens, which might account for a spike early in 2009. 

    Mr. Daly said he was not surprised that the Telegraph picked up on the story. “The fact of the matter is the numbers don’t lie,” he said. “The numbers are down tremendously.”

    “Remember that rainy day your mother told you to save for? It’s here. And how silly of everyone to believe that it would never come.”

    Mr. Daly, who recently shifted his business to a brokerage exclusively for buyers, said he has recently changed his outlook on real estate from “bull” to “realist” — he’s not quite ready to go “bear.”

    “This is how I make my living, this is the business I’m in, so I have a stake in the business getting better,” he said. 

    “Six months ago it would have been much different, now it seems like the negative mode,” said Paul Brennan, a broker for Prudential Douglas Elliman.

    “There’s an element of truth to it, there’s the other side as well. When the market was overheating you could feel that something was not quite right about that, and you can also feel there is something not quite right about this,” he said.

    Like his counterparts, Mr. Brennan said his office was already starting to move on toward a more productive spring. “I’m quite pleased with the activity in the marketplace recently,” he said. “We have contracts from $1.5 to $10 million. Why? I can’t tell you.” 

    For the time being, Joe Kazickas, a principal at Rosehip Partners in East Hampton, is throwing his energy into rentals, a plan he spent most of the winter refining. He said he spoke at length with Mr. Rice as he researched his story for The Times.

    “I thought the article was really a good thing for us,” Mr. Kazickas said, adding that “the traffic went up” considerably on his Web site, www.Hamptonsrentals.com. 

    “The general tone of the article was dark, although I think it’s pretty hard to rebut a­nything in the article,” he said. “It’s not one of those things you can just paint over with Day-Glo paint.”

    Ms. Desiderio, however, maintains that the situation is not nearly as dire as reports might indicate. Generally, she said, on the East End “the only people who might be losing money bought at the peak of the market” about three or four years ago, when prices were drastically inflated.

    She said that anyone who bought a house here 10 years ago is still poised for a profit, even if they sell now. “Real estate is not a short-term investment,” she said. “The only people who get caught with their pants down are a buy-and-flip.” 

    Like Mr. DePersia, one of Ms. Desiderio’s brokers, Beth Troy, is trying to sell her own house. “In the height of the season we could easily have asked $1.195 million,” Ms. Troy said, “and people would not blink.”

    Since putting it on the market about six months ago, however, Ms. Troy has lowered the price of the property, which is in Northwest Woods, East Hampton, and has four bedrooms, to $750,000. On the bright side, she said, the price of the house she hopes to buy after selling her old one will also be significantly reduced. 

    “It’s a great time to buy, so that’s why I’m probably more of a positive person right now,” Ms. Troy said. “I’m a very positive person and there are so many incredible opportunities.”

    The Times Magazine article mentioned a Southampton mansion that had been on the market since last summer. The price had been reduced from $7.5 million to $6.5 million. 

    “We’ve had interest in that house,” Mr. DePersia maintained. “Although I’m sure the owner wasn’t thrilled with the article, the house is gorgeous. It’s poised to sell.”