Property listed with Town and Country Real Estate

A reader questions George Simpson's (Suffolk Research Service) rosy appraisal of the real estate market in the Hamptons. (See last week's column on market booming on the east end for all the details.) He asks, "Doesn't George's median price figure point to what many brokers already know - namely that the reason the median price of home sales is up is because only the very expensive houses are moving and that lower and middle tier homes, the ones the rest of us buy, are not moving?"

According to the reader's reasoning, this effect would cause the median house price to rise since you'd be eliminating the lower priced houses in the averaging. "I'm not sure," he continues, "how George comes to a conclusion that real estate is booming simply by the median number. The number could just as easily point to something much more ominous. What does George, whom I respect, say on the volume of houses sold in the Hamptons? I'm sure that number is easily in line with what the rest of the nation is seeing, possibly even worse?"

George responds, "The 'median prices' I published are computed the same way that 'Median Prices' are computed in the rest of the country - rank all single family homes by price and the middle home price is the 'Median Price'. Say there are 100 houses sold during a period. If the middle house in the list has a price of $2,000,000 then that is the Median Price. Averages aren't used in computing the Median Price."

He continues, "Median prices I published for SH Town, SH Village, EH Town, and EH Village are up by remarkable amounts. Most other parts of the country show declining median prices. The person asking you the question seems to be confused between 'average price' and 'median price'. The 'very expensive' houses don't affect the median very much, they affect the average. That's why real estate marketing people like me don't use 'average.' For instance, if the median is $2,000,000, selling a $3,000,000 house affects the median price exactly as much as selling a $20,000,000 house."

"Unit Sales Volumes (adjusted for 8 months vs. 12 months) are up from 2006 in EH Town, EH Village, the same in SH Town, and up slightly in SH Village. Sales Dollar Volume (adjusted for 8 vs. 12 months) for single family homes is up slightly to substantially from last year in all four of these markets (SHT, SHV, EHT, EHV). A market where median prices are rising as fast as in this market and sales dollars are up is 'booming' - anyway you look at," remarked Mr. Simpson.

Furthermore says Mr. Simpson, "It is a changing market where the high end is more and more important, and the larger real estate firms are dominating the smaller ones, and one where the high producing agents get richer. Maybe it's not fair, but it is what's going on."

(All market figures are updated monthly on www.suffolkresearch.com/markets.htm)

We talked about Gosman's not selling last week, but here is a new Montauk motel restaurant and nightclub on Fort Pond sent to us by Town and Country Real Estate. Stacey Barnds of their East Hampton office is the listing broker. Commercial, nothing but water on 3 sides and sunsets on 1.26 acres with 625' of water frontage, It's priced at $5,000,000 which seems reasonable doesn't it, given the last few years market?

Lastly, Broker Judi Desiderio gives her opinion on recent articles about Springs taxes. (I don't know if I am helping solve the problem that concerns her by printing it!)

"Why are they punishing the local year rounders? If I read another article on the pending tax increase in the Springs, due to school/tuition, whereby someone justifies it with 'but you knew this was coming'- I think I'll scream!"

Ms. Desiderio goes on to say, "Have they taken a look at who they are hurting by writing this stuff? Teachers, nurses, civil service personnel, contractors, lawyers, many East Hampton Town and Village employees, young families and senior citizens, that's who. This tax increase will no doubt, negatively impact property values at a time when the customer base for these homes are already being pummeled by rising mortgage rates, more stringent lending parameters, less job opportunities and those who are plain old trying to make ends meet."

"If they continue to penalize year rounders, our community will implode. We surely need infrastructure and those who are, and those who will become, our infrastructure, need to live some where. Springs residents serve our community beyond what anyone has acknowledged to date. Busing East Hampton Springs children to Bridgehampton where their extra curricular activities and support disappears along with their friends, teammates, cousins and neighbors, is not the answer," says Ms. Mesiderio.

She continued, "If there was $3M to buy an Island that would have accommodated only ONE home (and remained on the tax rolls if the purchase were not made), then why can't we find the funds to keep our East Hampton community together? With all the brilliant minds here, can't we come up with a better solution?"
Hmmm! All the great minds get together? Uh, ohh! Watch out! The last time that happened, we got nuclear fission!

East End real estate? A very strange business.