Long Island housing market shakes off winter
Related mediaA look at the spring home selling season
Water is always handy when it comes to making analogies about real estate. During the height of the housing boom eight years ago, there was a flood of market activity. Of course, that became a trickle after the subsequent bust. The trickle has turned into a stream in recent years, and now some are wondering if building pressure from those waiting to buy a house is going to lead to a dam-busting demand.
Only one thing can be said about the housing market for sure: "It ebbs and flows," says Tricia Chirco, the director of marketing and communication for the Multiple Listing Service of Long Island and the Long Island Board of Realtors.
So, what is spring going to be? A trickle, a stream or a flood?
Frank Paruolo, an agent with Century 21 Bay's Edge Realty in Sayville, threw analogies aside when it came to his assessment of the coming market. "I think it's going to be great," he says.
A look at the numbers
Recently released figures from the Multiple Listing Service indicate there is reason for optimism. Although the Long Island housing market was somewhat frozen by the harsh winter, there are signs the spring thaw could result in a significant sales flow.
For example, the median price for homes that sold in Nassau County in February was $397,500, which represents a 4.6 percent increase compared to those sold during the same time a year ago. Suffolk County also had a slight median price jump for that period -- to $303,500, or a 2.4 percent increase.
What might raise some eyebrows, however, is that pending sales in February dropped almost 21 percent in Nassau County and were down about 16 percent in Suffolk.
"When you have bad weather and less open houses and people snowed in, you're going to naturally have reduced contract sales," says Chirco. "But all of a sudden, everything is picking up, and we're hoping the bad weather is behind us."
Slowed by snow
Walter Molony, a spokesman for the National Association of Realtors, agrees that the cold spell has certainly taken its toll.
"The abnormally severe weather has dampened a lot of economic activity," he says.
But he also expects warming temperatures and warming sales, with home prices rising anywhere from 5 to 6 percent. "We're still facing headwinds of tight credit and tight inventory," he says, "but I see a strong middle part of the year, and, when it's all said and done, I think it will be pretty much the same as 2013 in terms of sales volume."
That qualified optimism corresponds with an uptick in consumer attitudes toward home ownership reflected in a December Fannie Mae survey. Those who said that now is a good time to buy a home rose from 21 to 33 percent, according to the report. It also noted that, despite tighter qualification rules, consumers who said it would be easy to get a mortgage climbed from 45 to 50 percent, the highest level in the survey's 31 / 2-year history. Overall, the report says to expect "a continued, but measured housing recovery as we move through 2014."
New York-area appraiser Jonathan Miller, president and chief executive of Miller Samuel Inc. and the author of Douglas Elliman Real Estate reports, has a slightly different take.
"I don't think 2014 is going to see the same volume of activity as last year," he says, adding that he sees home prices rising -- and perhaps more homes coming on the market.
He sees last year's bustle as an anomaly for a couple of reasons. One was that people who had been waiting to buy a home for years were encouraged enough by improving economic conditions to take the plunge. The second factor came about when worries eased after the government sailed over the so-called fiscal cliff, which increased some tax rates and decreased government spending, yet the economy didn't plummet.
"There were a lot of people in prior years who pressed the pause button," Miller says. "The ones who were on the fence made their move after the fiscal cliff passed and they realized the world wasn't going to end."
A more cautious perspective
Although the outlook for the coming year looks good, Miller sees two potential problems that could slow sales. One is that, although the housing inventory shows signs of expanding, it still is limited. The other is new mortgage lending rules that have tightened the requirements for getting a loan, as opposed to the fast and loose loans that were available during the housing boom.
"They used to say you could get a loan if you had a pulse or could fog a mirror," Miller says. "Now, you have to have at least two arms and legs."
So, what does all this translate into, as far as springtime buyers and sellers go?
Even in an improving market, buyers will have limited choices, says Cheryl Grossman, an assistant broker with Realty Executives North Shore who sells homes mostly in the Dix Hills area.
"You have to know what you're doing and buy smart," she says.
Judge a home by its location and condition rather than the cosmetics, she advises. Ask an agent for a list of comparable homes and prices in the area, and look for bargains. You might get a deal on a home, for example, located on a main road if it is set back far enough from the traffic. A home ruled out by a family with children -- property with a steep drop-off, for instance -- could be ideal for a childless couple willing to build a deck and enjoy the view.
Yes, it may be more difficult to qualify for a mortgage now, but keep things in perspective.
"Interest rates are still in the low 4s," Grossman says. "My gosh, when I started out in real estate, if you got something in the 10 percent range, you were lucky."
While the market may favor sellers, Miller says, buyers are still cautious, and he hasn't detected any desperation on their part.
"I'm not seeing any 'irrational exuberance,' " he says.
Paruolo says he sees the coming year as a bright spot for everyone. With home prices increasing, more sellers will put their homes on the market, thereby increasing inventory and generating more interest from hungry buyers.
"It's always about supply and demand," he says. "I think more and more people will think it's time to put their house back on the market again. And with buyers more confident about the economy, they're going to be coming back to the market, too. It works well for both sides."
LISTING HISTORY. Since January.
WHAT'S FOR SALE. This is a Colonial with four bedrooms and 2½ baths with a large eat-in kitchen, formal dining area, den, an office and a finished basement. There also is a two-car garage, a gas fireplace and an attic with storage space. The large backyard has a patio and a deck and provides lots of privacy.
WHAT YOU GET. "There really is pride of ownership in this house," says listing agent Lillian Tramantano. "The owners have lived there for over 20 years. It's been well maintained, with lots of character. The market is tight when it comes to finding something nice like this. By that, I mean something turnkey, where you don't have to do lots of improvements right away."
LISTING AGENT. Lillian Tramantano, Coach Realtors, 516-678-6648
LISTING HISTORY. Since early March.
WHAT'S FOR SALE. This is an updated salt box with three bedrooms and two baths. It has an eat-in kitchen, formal dining room, a living room and family room and a full finished basement with eight-foot ceilings. The home has wood floors along with a new roof, siding, windows and an attached garage with an oversized driveway.
WHAT YOU GET. The yard was professionally landscaped with in-ground sprinklers and features a multilevel deck in back. The home is centrally located with easy access to major highways and is within walking distance to shops and schools. "It's a special house," says listing agent Albert Jacabacci.
LISTING AGENT. Albert Jacabacci, Exit Links Realty at 631-569-2899.
LISTING HISTORY. Since early March.
WHAT'S FOR SALE. This Colonial, pictured at left and below, has four bedrooms and two baths. It has a formal dining room, a new eat-in kitchen, a full basement and an attic. It also has walk-in closets, wood floors, a new patio and a detached garage. The kitchen has been renovated, and the home has new windows, siding, a roof and updated electrical added in the past three years.
WHAT YOU GET. The home is in move-in condition. It is on a quiet cul-de-sac close to the Smith Haven Mall. "All the major things are done," says listing agent Matthew Kochman.
LISTING AGENT. Matthew and Margaret Kochman, Coldwell Banker Distinctive Homes, 631-736-4200.