In wait-and-see market, buyers, sellers tentative
BY RANDI F. MARSHALL
Newsday Staff Writer
April 10, 2006
Anna Rajber is willing to wait.
Rajber has been trying to sell her Jericho home since July, even knocking the price down from $769,000 to $739,000. But she's not ready to bend more to make a sale.
"I think the house is still worth the money," she said. "I don't think it's overpriced."
Mauri Chotin-Zemachson and her husband, Scott, are willing to wait, too. The Manhattan couple hopes to move to Roslyn or Jericho, but so far they think the houses aren't worth the prices.
"I'm going to look until I find it," Chotin-Zemachson said. "I don't think I'm going to lower my expectations."
And there's the problem. For home buyers and sellers, this spring is telling a very different real estate story, one the region hasn't seen in nearly a decade. It may be the heart of the selling season, but the frenzy of years past is gone, replaced by a far more tentative market.
This season's results will likely speak for the future here, too.
"It will tell us how the housing market will perform over the next year or so," said Pearl Kamer, the chief economist with the Long Island Association. "The spring tells it all."
The story is not a simple one. Far more houses are for sale now, but sellers are trying to get the prices their former neighbors got and buyers are waiting for rock-bottom prices. Nassau, Suffolk and Queens had a total of 25,156 listings in February, compared with 14,653 a year ago.
But prices are still on the rise, albeit at a far slower pace. And houses are selling -- as long as the price is right. What's more, the number of days a house is on the market has barely changed. Kate Rossi, president of Coldwell Banker Residential Brokerage, which has offices in Long Island and Queens, said the average number of days on market now is 82, compared with 80 a year ago.
"It's definitely not a seller's market but I don't want to call it a buyer's market either yet," said Dorothy Herman, the chief executive of Prudential Douglas Elliman, which has offices in Manhattan and Long Island. "It's somewhere in between."
The shift is under way. The market slowdown led the spring selling season to get off to a later start, most experts say.
And in another indication of the market, The Dallow Agency, a Weichert Realtors affiliate, had 40 to 50 houses on the Long Island Multiple Listing Service two years ago. Now, it has more than 200, according to Levittown-based broker Rich Dallow.
Sellers are listing now in an attempt to beat market declines. And buyers are being choosy, sometimes continuing to shop, even after a binder has been signed, experts say.
"You have a sense that there are two homes on nearly every block that are either for sale or coming for sale," said Judy Markowitz, broker for Re/Max Millennium in Flushing.
The market for new homes is far different. With very few new homes available, supply is still outstripped by demand.
For instance, Michael Dubb, of The Beechwood Organization in Jericho, is building 720 units at the former Roosevelt Raceway site in Westbury, and said about 100 have been sold. He said he may even raise prices and isn't worried about selling the rest.
"It's still a sellers' market in construction," said Bob Wieboldt, executive director of the Long Island Builders Institute.
Nonetheless, the new-home market appears to feel the impact of the slower resale market, said builder Alec Ornstein, a partner in Ornstein Leyton Co. in Garden City. "We haven't yet seen the pop that we normally get in the spring," said Ornstein, who is also president of the Institute. "I still think it's a very viable market, but ... there's certainly a cooling off."
In resales, that's even clearer, as buyers spread out among the for-sale signs. Dallow said open houses now have an average eight or nine attendees, compared with 15 to 18 a year ago.
The number of buyers could decline, as "fringe buyers" -- those who could only afford low mortgage rates -- will be priced out, noted Martin Cantor, chief economist with Sustainable Long Island, an advocacy group.
That's why some sellers are trying to get their deals done now. Take Don and Jeanette Tamargo. The Farmingdale residents listed their house with Dallow associate broker Larry Theodore in November at $499,000. They'll be closing on the sale for $485,000 later this month. The couple, who have three children, are spending $615,000 on a Manorville home first listed at $649,000.
"Everything said now was the time to do it," Don Tamargo said. "Who knows what's going to happen?"
No one does, of course. But most agree interest rates will continue to rise and prices will likely flatten or fall. The question: By how much?
"We're not going to have to get the paddles out to resuscitate this market," said LP Finn, director of corporate services for Coach Realtors in Northport.
Finn's point: Sellers will still sell and buyers will still buy -- just not at the pace of recent years.
"We're not buying stocks; we're not buying heads of lettuce," said Michelle N. Cohen, an associate broker for Century 21 Laffey in Greenvale, who is working with Rajber and Chotin-Zemachson. "We're buying homes. ... There's still a need. People always move."
Nonetheless, if a weaker spring is followed by an even weaker summer or fall, that may put the market on notice. And that's when the reality check will come, said appraiser Jonathan Miller, with Miller Samuel in Manhattan, because there's seasonal "static" now.
"We're not seeing the gloom and doom at this point that had been anticipated," Miller added. "But we've got rising inventory, and potentially rising mortgage rates, and when you put those things together, that is not a good thing."
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