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More Home Sales, Lower Median Prices in 3rd Quarter

Market reports indicate more activity on lower end of real estate spectrum, while some sellers are more inclined to sell to eager homebuyers.

By Joseph Pinciaro
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October 26, 2012

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Third quarter home sales hit their highest point in the past six years across the East End, numbers show, though median home sales prices dipped overall year over year, perhaps pointing to a run in more affordable homes being scooped up on the real estate market and a willingness on sellers’ behalf to work with eager buyers.

Several East End real estate firms released numbers from the previous quarter this week, with slight variations among the total number of sales reported. Across the board, however, all reported more sales and a lower median sales price as low mortgage interest rates lure homebuyers to the market.

“You’re seeing more lower-price transactions in the mix,” said Jonathan Miller, of Miller Samuels Real Estate Appraisers and Consultants. “The housing stock is shifting toward smaller units; starter homes are more immediately responsive to falling interest rates. This is resulting in an acceleration of activity in 2012 — it’s not because prices are weakening.”

Miller’s report, released by Prudential Douglas Elliman, noted that the median sales price of homes on the North and South forks last quarter was $635,000, down from $700,000 last year — a drop of 9.3 percent. Total transactions rose from 538 to 561, up 4.3 percent year over year.

Miller added that as credit restrictions remain tight for potential buyers, more and more homeowners are likely to keep their homes off the market. The result is a smaller inventory of homes, keeping home prices stable.

Saunders VP Anita Klempner said she foresees a similar trend on the horizon following a higher inventory, and a “flurry of activity” over the summer, as inventory falls.

On the North Fork, Corcoran V.P. Sheri Winter Clarry said that while prices are remaining stable, “I think sellers are starting to become more realistic,” leading to part of the drop in median sales price overall.

Corcoran’s report noted that overall sales on the Twin Forks are up from 542 to 577, while median selling price is down 2 percent, from $679,000 to $665,000.

Numbers from Brown Harris Stevens indicate that North Fork sales were up from 79 to 98, seeing a drop in median price from $424,000 to about $411,000. On the South Fork, sales volume rose to 293 from 250 while median price slipped from $905,000 to $850,000.

“It’s not necessarily a downward trend,” said Greg Heym, chief economist for Halstead Properties, which completed Brown Harris Stevens’ report. “I think it’s a mix. Especially in some of these market areas, you have a pickup of low-end sales. Also, a lack of the $10 million or $20 million sales that pop up occasionally.”

Touching upon the desire of buyers looking to take advantage of low rates, Clarry said, “There has been a strong desire to buy, but some people are balking at some pricing still. So I’ve seen sellers a little more inclined to sell … As long as it’s priced right, it will sell. There are really no questions about it.”

Both mentioned the market volatility that may come with presidential elections, so attributing any one indicator to one cause is a risk in itself.

Bill Williams, a senior V.P. with Sotheby’s, said on Friday that he’s seeing a flurry of activity also, as well as a willingness of sellers to engage.

“I think sellers are becoming a little bit more reasonable, especially a property that has been on the market for nine months or a year,” he said. “I gauge activity not only on how active I am, or our agents are, but how busy the attorneys and surveyors are. Things have definitely picked up.”

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