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How Sandy Has Affected Nassau Real Estate Market

Prospective buyers have been scared to look on the south shore, while other markets saw delays.

Story by Stephen Bronner.

Karen Szteinberg had been in contract to sell her South Merrick home and in the process of buying a co-op in Freeport — and then Hurricane Sandy hit.

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Her home had been unscathed by the superstorm, but the co-op was badly damaged. The South Merrick home eventually sold, but now Szteinberg lives in a short-term rental awaiting an update. Still, she says, the massive storm has not affected her outlook on the Long Island real estate scene.

“There can be a natural disaster or intentional act anywhere you live,” she said. “In all honesty, I have considered moving more inland, but I prefer to live in proximity of my business and friends on the south shore. Wherever I move, it would be a gamble.”

Other Nassau County residents, as well as realtors, have echoed Szteinberg’s sentiment — people want to live where they want to live, despite the havoc caused by — what they hope — is a once-in-a-lifetime storm. However, at least in the short term, many potential buyers have been scared off by properties in neighborhoods on the south shore, whether by future weather events or high insurance coverage costs.

“The impact has been uneven,” said Lawrence Levy, executive dean of Hofstra’s National Center for Suburban Studies. “Along the shore it’s created a lot of concerns and doubts among both buyers and potential sellers. There’s a lot out there about storms being more frequent and worries about getting insurance and it being enough to rebuild and rebuild it the same way.”

Up and down

The number of home sales on the south shore did in fact decline in the last quarter of 2012. In the last months of 2011,166 home sales were reported, according to a report by real estate firm Douglas Elliman and appraisal firm Miller Samuel. The number of home sales decreased to 127 in the final quarter of 2012, a 23.5 percent decline. On the north shore, homes sales went from 415 in the fourth quarter of 2011 to 530 in 2012, an increase of 27.7 percent.

It’s possible that the drop on the south shore reflects homes that have been taken off the market while their owners complete storm repairs, according to realtors.

Meanwhile, homes are still getting more expensive in Nassau County. In 2011, the average sale price of a south shore home was $402,709 and a north shore home was $858,592, according to the report. Both numbers jumped in 2012, to $453,172 and $969,769, respectively.

The water problem?

Realtors and potential sellers confirmed people’s apprehension toward some properties on the south shore.

“[Sandy] will no doubt change people’s perception of property by the water,” said Patty Murphy, a realtor at Village Plaza Realty in Malverne, who added that properties by the water had been hard to sell for at least two years, likely due to insurance costs.

Jackie Katz-Rabinoff, who had listed her Harbor Green Estates home in Massapequa for sale before Sandy hit, said that although her home had no water damage, “not one person has come to see my house since the storm.”

She added, “South of Merrick Road seems to no longer hold the appeal it used to.”

Some prospective buyers and investors are still looking at homes along the water on the south shore, but at reduced prices, said Seth Levy, of Shawn Elliott Luxury Homes.

Levy pointed to one home in Hewlett Harbor, with a 1.73 acre lot and a tennis court. The large property would have entered the market at $3.5 million had it not been damaged in the storm, Levy estimates, but it is now listed for $1 million less. The home is now in contract.

Another neighborhood in the Five Towns, North Woodmere, saw many homes with flood damage. Still, people have been grabbing the homes there for its lower taxes, according to Donna Galinsky of Pugatch Realty in Woodmere.

“I wish it were black and white, but it isn’t,” she said about Sandy’s impact on Nassau real estate. “We’re still trying to figure it out.”

Staying put?

For many Long Islanders, this storm has not changed their preference toward living near the water.

“People have a lot of pride, and when I hear them talk about what has happened, they plan on rebuilding and staying,” Lindenhurst realtor Jackie Connelly-Fornuff of Century 21 wrote in a Patch blog post. “Living on the water in Lindenhurst is a lifestyle, and these homeowners do not want to give that up.”

Another devastated area, Long Beach, has seen a surge of investors interested in buying homes at heavily-discounted rates.

In Garden City, Sandy only delayed the beginning of the 2013 real estate market due to power outages and needed repairs, according to Stephanie Cullum of Coach Realtors.

The tax threat

Weather events, in the end, may not be the biggest threat to Long Island real estate.

Levy, of Hofstra, said that people are still attracted to Long Island for its high wages, “gorgeous” beaches, park system, governmental services, proximity to New York City and “the best, in aggregate, public school system in the country.”

But Levy warned that something needs to be done to change the “trajectory of property taxes.”

Szteinberg agreed, saying, “I’m an optimist; I’ll worry about the next storm in another 40 to 50 years from now. But way before then, I will probably have already moved off of Long Island due to our high taxes.”

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Jaime Sumersille February 01, 2013 at 10:14 AM
From Jeff Alan via Facebook: the market sucks, especially for rentals. we are being forced to move out of our current place, and we're finding that rental prices are way up, and the selection is low.. we're hoping that changes cause we need a new home and were not leaving our beautiful community and way of life. i don't care how many storms come thru...
Me February 01, 2013 at 10:24 AM
There is bound to be a downturn at least in the short term. The market is flooded with low cost properties right now and yes people are scared. But I think some areas will come back bigger and better and some might not. Areas such as Belle Harbor, Long Beach, Lido Etc. where peopel live there for the water will likely come back bigger and better as all the small bungalows are rennovated or replaced. Places where the water is just an ancillary fact may see more of a long term decline but eventually people will forget and Sandy and remember why those places were desireabvle before the storm. Yes Insurance costs will be an issue as many places will require it but that too will become the norm and prices will adjust.
richard February 01, 2013 at 12:31 PM
Flood insurance will double in 4 years as will homeowners inssurance. Flood insurance doesn't cove in excess of 250k structure. As many people are finding out, it also doesnt cover backyards,pools, fences, etc. This is a game changer and will certainly influence future pricing as taxes, insurance costs increase. There will be a flood of forclosures as people walk away from little or no equity houses or don't have the money to rebuild. If one more event happens like this, no one in their right mind would by in a flood prone area. Afdditionally, if you have depleted the bulk of your liquid assets this time around, there won't be any money to rebuid next time. Remember, if you want to go to the beach a couple of times a year in the summer, just hop in your car and drive.
Jack February 01, 2013 at 12:58 PM
"the best, in aggregate, public school system in the country.” Are you kidding? The public schools on Long Island suck. There are only an few that are good. Have you nseen the horrendous schools in Freeport, Hempstead, Roosevelt, Elmont, Lawrence, Wyandanch, Brentwood etc etc etc? High taxes are killing homeowners for schools that are not accountable and lack educational success.
Elliot Zuckerman February 02, 2013 at 07:05 AM
I have to agree that the value of our homes will increase shortly mainly because most of our homes will be rebuilt to almost new, as a life long resident of 60 years and third generation here I love this place, yes the taxes are killing us, the school tax is insane and all other costs are running thru the roof but this is long beach and where better can you live and play like it. okay so maybe there are nicer areas, better schools, lower taxes and services but I am here to stay and no storm will force me out.Stay strong and wishing everyone here a speedy recovery. My real name
Jack February 02, 2013 at 08:43 AM
Yes but the issue was the "public schools" They are not the best here and on Long Island, especially when you compare the excessively high taxes paid by a smaller amount of homeowners and increasingly third world/ illegal alien shool population.
delete me February 02, 2013 at 10:25 AM
Good article and follow up comments.
Eddie February 02, 2013 at 10:39 AM
I'm betting on Long Beach too, though I'm not too optimistic in the short term of two to five years. Along with physical change, demographics have changed. Less affordable apartments, less low-income, less young and less old residents have remained here. Business has vanished. Those remaining have less trust in the local economy. This loss will have a bigger impact than the loss of buildings. Our Long Beach leadership is completely inexperienced, and they have done great economic damage to the community and its residents. All this equates to a perceived instability which, coupled with a federally-manipulated mortgage market can deter new buyers who fear soaring tax and bogus insurance levies. Long Beach is a beautiful place, and its housing supply will be in demand by some. Future values depend on that demand. If the current mismanagement and tax nightmare are not addressed, or at least appear to be addressed, only fools would choose to put their money here.
Eddie February 02, 2013 at 01:51 PM
Roland, do you realize that the taxes not paid by the closed stores, foreclosed houses and legal two family homes will now have to come out of YOUR pocket?
Eddie February 02, 2013 at 02:15 PM
More easily said than done, Roland. While illegal apartments create havoc on the neighborhood, bring in undesirables, and are often dangerous, the enforcement of zoning codes is very difficult. Not easy to get a warrant to inspect private property. Impossible without good cause. I do agree that the loss of many illegal apartments will improve the area, but it will also bankrupt many owners who relied on the income to pay their taxes. And you know who has to pay their unpaid taxes. Be careful what you wish for. We may not be able to afford to stay here without those taxpayers.
Beachguy February 02, 2013 at 08:10 PM
Right on Reggie. You hit the nail on the head. The landlords of illegal units put the money in their pockets. They pay the same taxes as the house next door. Meanwhile the tenants kids are at the school, they are generating garbage, taking up parking spaces, etc and deminishing the quality of life. Now is the time for a clean sweep. The City has a once in a lifetime opportunity to rectify things. Will they? Ha, ha, ha, ha ! LOL! Of course they will. And the cow will jump over the moon. TILB. Nothing will change. NADA. When will they coordinate the buses with the trains? Where is the missing $20,000 in beach receipts? LB is a nice place to visit but living here is another story.
cabbage patch kid February 03, 2013 at 08:28 AM
Renters once again have to bite the big sh-t sandwich that the chamber of commerce helped assemble! Don't worry long beach the renters will fix the problem with cost and taxes we will take the hit for you and then you'll turn around and call us undesirables and a problem. Meanwhile I lived in this town before most of u where born, grew up in even more corrupt disfunctional long beach now I have to move not because of sandy but because of the snobby out of town home owners that are getting rich of us. And don't care one way or the other. GERMANY 1940s
Eddie February 03, 2013 at 09:47 AM
Cabbage, I see parallels to Germany, but the one of the 1930's with rampant inflation. Sorry to bust your bubble, but the property owners aren't getting rich. Costs to them are soaring. Many renters think landlords put that rent check in their pockets, but in most cases, at least 2/3 goes to taxes and insurance. The rest pays a mortgage and repairs. When a landlord rents, he expects a return on his work, risk and investment. He must pass his increased cost on to the tenant. If you don't believe that, and you feel that landlords are getting rich, why not become one? You can get a great deal now and you'll never have to enrich your landlord ever again.
Tonto Hertzberg February 03, 2013 at 11:42 AM
We have no problem with renters or the landlords that rent to them. We DO have a problem with illegal renters and the criminal tax cheats that rent to them. Defrauding the government of $18,000 dollars a year in rent for YEARS maybe decades is far worse than what is allegeded in the Fagan case. maybe the Feds should come in an arrest some of the felons for the federal crime they are comitting
Tonto Hertzberg February 03, 2013 at 12:15 PM
Cabbage: i would think our Jewish readers and ALL people of decency would be disgusted at your equating the Holocaust with your dumb issues with LB. You owe an apology for your anti-semitic rant
cabbage patch kid February 04, 2013 at 09:30 AM
How is it anti Semitic I'm Jewish and German and Irish ww2 killed lots of people of all nationalities I don't single out one race as the victim there were Chinese Japanese Ukrainian English Italian French have a nice day :)
Hamburger February 04, 2013 at 09:32 AM
we do have some problems with renters - when they function as a summer share house, sublet to their friends, and in general bring in a horde that could give a f**k about the neighborhood or it's residents
cabbage patch kid February 04, 2013 at 09:32 AM
Issues with long beach extend past the border Reginald all the way to Geneva and the Vatican as well as the United Nations . What's your beef or u just want to stir the pot!
Leonard Bauman February 05, 2013 at 10:11 AM
My neighbor recently listed their flood damaged home for sale, which they are asking pre-market asking price, despite unfixed flood damage. They have been tricking real estate agents and buyers by using air freshners and dehumidifiers to mask the smell of damp flooring and damp walls. I feel sorry for the fool that buys their home come summertime since the mold in the floor and walls will be blasting the inside of that house with spores. As the saying goes, buyer beware and do not trust anyone when they say-- My Long Beach home was not affected by the flood, or water did not get in my home! Especially when the 1st Floor of their house is less than 5 feet off the ground!

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