Improved Real Estate Market Still Has Issues

This is the second part of a two-part series.  

In November 2009, local real estate brokers reported that co-ops priced at $500,000 and under were selling the most, as were homes priced at $800,000 and higher, including the most expensive waterfront homes.

At the time, home prices had dipped as much as 15 percent in Long Beach from the previous year. And from January 2008 to January 2009, the Nassau County Department of Assessment had reduced the assessed value of homes countywide 17 percent.

Today, while those similarly-priced co-ops, most of them located on East Broadway and Shore Road, are still the units selling the most in the city, sales on the more expensive homes, mainly on the Canals and Reynolds Channel, are far and few between. These waterfront homes vary considerably in price, from about $600,000 at the lower end of the Canals, at or near East Chester Street, to nearly $2 million on Reynolds Channel.

"That's kind of unusual, because most people who come here want to be on the water," Karen Adamo, a broker with Petery Realty, said about this particular downturn. "It's a little unnerving for me, because we've always done well with the homes on the Canals and bay. But they're not moving."

Adamo speculates that the increased cost of flood and home insurance, which have generally more than doubled in recent years, has impacted their sales. Before the financial crisis in 2008, home insurance on the Canals, for example, was generally about $1,200 annually, while now it is $3,000. And new Federal Emergency Management Agency regulations requires all new homeowners on Long Beach island to buy flood insurance.

Of the few houses that have sold, Adamo said, most were priced at $400,000 and under in West Holme, the area south of West Park Avenue. Meanwhile, the other units that continue to stagnate are the condominiums on West Broadway, since most are two bedrooms that start at $500,000.

Joyce Coletti, a broker with Prudential Douglas Elliman on Park Avenue, said she sold condos at the White Sands, at 26 W. Broadway, for $1.2 million, and an apartment at the Meridian, at 260 W. Broadway, for $1.5 million, this year.

Coletti, Adamo and Miriam Gold, owner of Paul Gold Realty in the West End, each cited two other factors that have left their mark on local real estate. First, mortgages are harder to obtain, as banks require buyers to have stronger credit and larger down payments; and second, buyers and sellers remain uncertain about a still unstable economy.

Gold attributes the Long Beach market's slight surge to mortgage interest rates, which are down to 4.5 percent, a rate she remembers existed only back when her father, Paul, built their house on the barrier island 56 years ago. "This is good, and for people with decent credit it's a smart time to buy," she said.

Though Gold is concerned that Federal Housing Administration policies still permit new buyers to put just 3.5 percent down on a new home.

"If they would continue to be careful about the paper work, we would not get into the bad market we were in the past two years," she said. "It was a little like a runaway train for a while. People couldn't afford what they were owning."

While there have been a few more foreclosures and short sales this year in Long Beach, compared to other areas on Long Island and certainly nationwide, these have not been a major factor in the city, brokers said.

Coletti noted that homes, on average, stay on the market longer these days, up to 12 months. "And unless a homeowner prices her home correctly, she's never selling it in this market," she said.

But Coletti finds that people have become much more self-educated about home buying, and rely less on open houses and instead deal more with real estate agents.

"Real buyers use to go to open houses, look around, make a bid — no more," Coletti said. "Now they're tire kickers at every open house, but they don't buy at the open houses anymore. When they call me up to go see a house, they're already bidding on those homes. They've done their investigating all by themselves. And when they're ready to buy, they call a real estate agent."