Wednesday, November 18, 2009
Signs of Life in Long Beach Real Estate Market
By Joseph Kellard
Long Beach broker Joyce Coletti has had more closings since January, 45 in all, than she has had in many years in Long Beach. About 60 percent have involved first-time home buyers who have taken advantage of an $8,000 tax credit made available through the economic stimulus bill that President Obama signed in February, which he extended by signing another $24 billion stimulus package on Nov. 3.
“I’m seeing more Federal Housing Authority loans than I’ve ever seen before,” said Coletti, who works for Prudential Douglas Elliman on West Park Avenue. “They’re for people who really don’t have much money but have good credit. So they can put down three percent, which is nothing.”
But while Coletti and other Long Beach real estate agents report a slight surge in home sales due in large part to the tax credit, they acknowledge that the market has otherwise stagnated since the financial collapse last fall, and they express a mix of uncertainty and cautious optimism about an economy in which the unemployment rate continues to climb.
“I’m not finding the market is otherwise getting any better,” Coletti said. “I’m seeing it getting slower.”
Karen Adamo, a broker with Petry Realty in the West End, said that because of the slight surge from the home buyer’s credit, Long Island real estate agents had been pushing the federal government to extend it beyond its Nov. 30 deadline.
“That’s because we did see sales go up, we did see a surge, but in the lower-priced homes, in the $300,000 to $400,000 range,” Adamo explained.
According to the terms of the extension, a first-time home buyer must sign a contract on a home by April 20, 2010, and close by June 30. The extension also increases the credit’s availability to single purchasers with a maximum income of $125,000, up from $75,000, and to couples with a top income of $225,000, up from $150,000, and those who have owned a home for at least five years a $6,500 credit for a new home.
The Windward, a condominium complex at 251-255 W. Broadway, between Laurelton and Lafayette boulevards, is one building where the developer is not accepting federal loans, but its condos are selling just the same. The three-story, 29-unit building offers 400-square-foot studios and 800-square-foot one-bedroom units that sell for $229,000 to $369,000.
Coletti has sold all but five of the condos since July 2008, mostly to teachers, police officers and firefighters who took out conventional loans and put 10 percent down. “It’s carrying my salary,” Coletti said of the building, which has accounted for a majority of her closings. “I’m having a very good year from that building.”
Adamo, Coletti and Neil Sterrer, owner of Sterrer Realty on West Beech Street, all said that the lower-priced homes, $400,000 and under — particularly studios and one-bedrooms in co-op buildings — as well as homes priced at $800,000 and higher, including the most expensive waterfront homes, are selling the most, although the latter are not moving as quickly. “There is an implication that those two markets are OK,” said Sterrer, who is the co-chairman of the Long Beach-Island Park Brokers Council.
At the Aqua, an eight-story luxury condominium complex overlooking the ocean on Shore Road, 14 of 36 units have sold, with seven in contract and seven closed, according to Jan Burman, president of Engel Burman Group, a Garden City-based developer of properties from Montreal to Miami. Among the units that have sold were three of the building’s six penthouses, the most expensive condos in town.
“We’re doing good and we still have a tremendous amount of interest,” said Burman of the condos, which range in size from 1,730 to 2,400 square feet and in price from $1.3 million to $3.3 million.
In May, when the building was completed, Burman said, he started closing on units that were in contract from last year. “Having sold 14 since May we’re pretty happy,” he said.
Asked to project six months to a year down the road, Burman said, “I guess I’m cautiously optimistic. Obviously, a better economy would mean better sales across the board.”
Sterrer noted a virtual shutdown in sales of mid-priced homes in Long Beach and across Long Island, a trend that began about three years ago, when the real estate market started its downturn. “The $400,000 to $800,000 homes are taking 30 percent hits in order to sell,” he said. “The only people willing to do that are the people with no mortgages.”
Meanwhile, home prices have dipped as much as 15 percent since last year in Long Beach, and from January 2008 to January 2009, the Nassau County Department of Assessments reduced the assessed value of homes county-wide 17 percent, which will be reflected in homeowners’ school tax bills next October, according to County Assessor Ted Jankowski. “We’ll be doing a new assessment for this coming year on January 2, and we anticipate that, again, assessments will continue to go down,” Jankowski said.
One constant in Long Beach is the inventory of rental units, which remains among the highest in the county, Sterrer said. Generally, studios run from $900 to $1,000, one-bedrooms from $1,100 to $1,300, two-bedrooms from $1,300 to $1,700 and three-bedrooms from $1,600 to $2,500. “The lower end,” Sterrer said, “is selling right now — the singles and the two people getting together to save money.”
Photo by Joseph Kellard