Rookie buyers crowd Long Beach housing market
By Joseph Kellard
In January, Ray Sackman closed on his first home, a one-bedroom, one-bath condo on West Broadway. The 28-year-old mortgage trader — who has an apartment in Rego Park and splits time between the two —is part of a nationwide trend that has not escaped Long Beach.
That is, a growing number of home buyers are first-timers, many of them 20- and 30-somethings capitalizing on lower prices and interest rates in the wake of the mortgage and banking crisis. According to the National Association of Realtors, 41 percent of buyers in 2008 were first-timers, up from 36 percent in 2006.
Although local real estate agents have no precise data on this trend in the city, some of them said that over the past six to nine months, first-timers have mostly snatched up condos or co-ops at prices ranging between $250,000 and $400,000 with interest rates at around 5 percent, down from the pre-crisis 6 to 6 1/4 percent rates.
“People who have something to sell must wait until they’ve freed up their cash before they do something,” said Miriam Gold, owner of Paul Gold Real Estate. “So the first-time home buyer is really in a good position.”
Sackman said that in addition to the favorable market, he wanted to buy in the community where he has been surfing for many years. “I just decided that it was time to get a place of my own and that I also get a place where I can escape,” he said. He looked at many homes on the Internet before contacting a broker, and viewed six condos in Long Beach before deciding on his new home. He took out a loan on the $340,000, 700-square-foot unit and put down 40 percent.
Joyce Coletti, a broker with Prudential Douglas Elliman, said that most new buyers are taking out loans, but banks now want to see anywhere from 20 to 40 percent down, when a few years ago the average was 10 percent or less — even zero. Coletti said that business has picked up considerably with the federal stimulus package offering home buyers an $8,000 credit.
Gold said that new buyers are moving in all around town, and Coletti said that at the Windward condos on West Broadway, where Sackman lives, 14 out of the 28 units have been sold to first-time owners at prices ranging from $199,000 to $399,000. Teachers, firefighters and police officers, she said, are buying one-bedroom, studio and Junior 4 units, the last having a separate dining area that can be converted into a second bedroom.
One New York City police officer, Lou Casto, said he didn’t need a loan, and put 23 percent down on a $220,000 oceanfront studio with a terrace at 250 Shore Road. Single, living in Bayridge and prepared to close on his new unit by next week, Casto, 39, had already rented two other places in Long Beach. After much research, he decided to buy in the city, and took the first place Coletti showed him.
“I like the beach, I like that it has the railroad with direct access to the city, and I like the gyms and movie theater,” Casto said of Long Beach. “It’s like a Bayridge on the ocean.”
Coletti noted that a comparable unit in Casto’s building sold for $260,500 in April 2006. She said the market began to fall in Long Beach around September 2007, and since then prices are down on condos and co-ops by 15 percent, and on houses by 20 percent.
According to sales data collected by the New York State Association of Realtors, the median sales price of single-family homes in Nassau County in the fourth quarter of 2006 was $480,000, and for the same quarter of 2008 it was $425,000, an 11.5 percent drop.
Josephine Lobel owns a home in Island Park that her husband, Adam, rebuilt when they bought it three years ago, but they recently bought their first home on the barrier island. The couple moved quickly to buy another fixer-upper, a split ranch with four bedrooms and two baths on Regent Drive in Lido Beach, and is still trying to sell their Island Park home. They paid $460,000, putting 20 percent down on their new home, which, Coletti said, would have sold for $500,000 just a couple of years ago.
“This house really was a no-brainer for us,” said Josephine. “It’s a big corner lot at a really good price for Lido Beach. We jumped on it because whatever condition a house is in, my husband can fix it up.”
Josephine, who grew up in the close quarters of Long Beach’s West End but wanted to raise her family in a home with more property, said she looked at many homes on the Internet before visiting about five.
Gold and Coletti said that in the recent past they would only have to show three to six homes to prospective buyers, but these days they show as many as 15 to 25 before customers make decisions. “People are being cautious and just being certain about what they want,” said Gold, adding that she has seen two buyers’ markets in her 45 years in Long Beach real estate. “A lot of people don’t know exactly if they want a home, a condo or a co-op, so it’s been a little bit of an educational process.”
Coletti, who is recognized for selling the most homes on the barrier island each year for the past decade, said today’s buyers are showing considerably more discretion, especially when it comes to price. “In 2006, if you showed them a nice apartment, they bit on it right then and there,” she said “Now they want to see 15 other one-bedrooms before they make up their mind because they need the lowest price possible.”
Coletti noted that what’s also new is that some potential buyers are bidding on two or three units at a time. “It doesn’t matter if they like a place a lot or not,” she said. “They’re all looking for the best deal first.”