The competition next door

The aroma of chicken and rice floats through the air. Ramon Tavarez, who speaks Spanish, says through his real estate agent that the Melito kids next door often come over to eat, and, judging from the smell, who can blame them? But it's not just the food that draws them: It's the company.

There is a good relationship between the neighboring families on Davison Street in Oceanside. Tavarez, the owner of a landscaping business, even does Lisa and Jimmy Melito's yard work for free, says Maria Carrasquillo of Coldwell Banker Beach West in Long Beach, interpreting for her client.

But both homeowners happen to have their Dutch Colonials up for sale, and each says they think their house is a better deal.

"The kitchen is not updated like ours is," says Lisa Melito, 40, a medical assistant. "And I think we've gotten a lot more traffic than them."

Tavarez says, through his agent, that the Melitos' house is not updated like his is.

Tavarez has had his house on the market for 17 months. The five-bedroom, 2 1/2-bath house had been listed for $525,000. The asking price is now $495,000, a price Lisa Melito says she believes is a mistake. The Melitos' three-bedroom, 2 1/2-bath house is listed for $399,000, down from its original price of $439,000 when they listed it 15 months ago.

Both families say the other does not pose a threat, and that they are appealing to a different type of buyer. But, being next-door neighbors, they share a lot of traffic flow and, admittedly, often are compared, nonetheless.

Prices are dropping

According to the April housing figures from the Multiple Listing Service of Long Island, in just a year the median closing price for home sales on Long Island and in Queens has dropped from $440,000 to $415,000, or 5.7 percent. (In Nassau, the median price decreased from $473,800 in April 2007 to $447,000, or 5.7 percent; in Suffolk, the price went down from $400,000 to $370,000, or 7.5 percent.)

Some agents predict prices will soon drop even lower in this flurry of foreclosures and stagflation, a combination of inflation and a sluggish economy.

There's been a 7.8 percent increase in the number of houses on the market. In April there were 36,790 houses for sale on Long Island and in Queens. In April 2007, there were 34,129. In Nassau, it would take nearly 14 months to sell all 10,486 residential properties on the market, based on the current pace of sales; in Suffolk, it would take 18 months to sell all 14,809 properties; the 11,495 listings in Queens would take almost 19 months.

"The market is a little more flooded than usual," says Chris Montalbano, a licensed sales associate with Century 21 Prevete Real Estate in Levittown. It's common, he says, to see neighboring houses for sale. "It generally helps one seller and hurts the other."

The Melitos have had five open houses and Tavarez has had more than eight, their agents say. "We try to do them every other week because every week looks desperate," says Carrasquillo, who is co-listing the Tavarez house with Leonilde Simonetti. Both families have had several offers, but no follow-through. Sometimes the offers have been too low; other times potential buyers lost interest.

The Melitos' agent, Michael Karlen with Hal Knopf Realty Inc. in Oceanside, says the situation has nothing to do with the house or its price. "It's just a matter of the right buyer coming along," says Karlen. Still, says Lisa Melito, "It's so frustrating - so frustrating. We thought it would only take a couple of months. And we were prepared not to register my son for kindergarten because we thought we'd have moved by now, which is hard on the kids."

As 3-year-old daughter Kayla squawks capriciously on her lap, Melito notes that she wants to move to New Jersey to be near family and to spare her husband the two-hour commute to his job there as an elevator mechanic.

Tavarez's sons, daughters and grandchildren watch television in his living room as one of them strums a guitar. Though at the moment the house is filled with family, Tavarez's kids no longer live with him. So Tavarez says through his agent that he wants to downsize. Carrasquillo explains, "There's no rush, but he wants the money."

In the 2 1/2 years he has lived in the house, Tavarez says he put two bedrooms and an office in the basement, did all the wood paneling, painted, refurbished the fireplace, reshingled the roof and transformed a living room closet into a half-bath.

The Melitos say they have also updated nearly everything in their home, even adding a deck - all of which they now say they expect to lose money on. "We did put a lot of work into it and made it how we like it and we would have gotten a lot more money for it if we had done this a couple of years ago," says Lisa Melito. Now, she finds it a hassle to constantly keep the house pristine for showing.

Peter Kavanaugh, a licensed broker associate with Woodbury-based Shawn Elliot Luxury Homes & Estates, has seen the race to mop and toolbox first-hand. He has two listings on the same street in Huntington, both with a house next door for sale. "It turns into a little more competitiveness between the sellers, and then you see one of the sellers cleaning up and doing a little more to get it sold," he says.

Dominick Picarello, who listed his Colonial in August, knows all about that kind of rivalry. Picarello, 39, an IT manager for New York University Medical Center, says the contract on his Mount Sinai home was all but signed when the would-be buyers decided to buy a house two doors down for the asking price on the day it was listed. Picarello says his neighbors asked a few thousand dollars less than what he had agreed on with his buyers. "They underpriced it tremendously, which is completely within their right," says Picarello. "It was too good to pass up; I almost don't blame the buyers."

Agents compete, too

Picarello says it's not just sellers competing, but agents as well. The houses were both listed with Prudential Douglas Elliman Real Estate, but with different offices.

Maddy Byer, manager for Prudential's East Setauket office, says she is unaware of the situation, but says, "If there are 20 houses for sale and a consumer chooses one, we're not in control." A representative for the other Prudential office, in Ronkonkoma, could not be reached for comment.

Picarello says he did not renew his listing with the realty company when it expired April 15. He is trying to sell the house himself and has lowered the price from $599,990 to $589,000.

Rob Schmidt, another soldier in the battle for buyers, grew up in his Westbury neighborhood. Before buying his house on Bernard Drive, Schmidt, a Local 28 Union sheet metal worker, lived eight blocks away, then two blocks away.

"It's a great place to live," says Schmidt, 47, whose kids attend W. Tresper Clark High School, the school he went to.

When he and wife, Peggy, a stay-at-home mother, decided to move the family to North Carolina for a job opportunity, he was surprised to see that his neighbor's house was still on the market, after thinking it had sold when the sign came down.

He says he and his wife "were talking about it and we know what we're going to do and then we come home and see the sign is up and we're like, 'Oh, great, now their house is for sale at the same time,'" Schmidt says. Both houses went on the market more than three months ago.

Schmidt says he has a friendly relationship with his neighbor, Catherine Nocerino. "I try to help her take out her trash, but she won't let me. She wants to do it," Schmidt says.

Nocerino's daughter, Kathy Joyce, listed the house for her. "The first thing I thought when I saw the other house go up for sale was, 'Oh, great, competition," says Joyce. "But then my Realtor said to me, 'No, maybe it will be a good thing,' because they are priced higher than me."

Schmidt's house is listed for $599,999, and Nocerino's for $549,000.

There are only four models of houses in the neighborhood, which, Schmidt says, can make standing out even more difficult. But he notes that his open floor plan, hot tub, new driveway and fourth bedroom help set his house apart from the rest.

"The house behind me is for sale, the house on the corner is for sale, so it's not like it's me and [the neighbor]," says Schmidt. He has noticed that many of his buyers also toured his neighbor's house. "I don't blame them," Schmidt says. "I did it, too, when I was visiting North Carolina."

If it happens to you . . .

Real estate agents offer this advice for homeowners who find themselves competing with their neighbors for a house sale:

Check out your neighbor's house. And compare it to yours so you can price your house competitively.

Coordinate open houses with your neighbor. Chances are, you will both add to each other's exposure.

Join forces with your neighbor. "I would suggest listing with the same office because they will probably try to show both properties at the same time," says Chris Montalbano of Century 21 Prevete Real Estate in Levittown.