Posted by Jonathan J. Miller -Sunday, March 4, 2012, 1:40 PM
Yesterday’s New York Post Article “The $lamptons: Unsold & foreclosed homes plague East End” got a number of people I know upset with the context of the piece. The article quotes reputable people (assuming I’m reputable) but not to reference the premise of the Property Shark report being cited.
Here’s the lead article quote:
Five years after the housing bubble burst, the number of unsold Hamptons homes has hit a 30-year high while prices have plummeted.
Reality: Prices fell sharply after Lehman collapse in 2008, but the overall market generally remained stable for the past 3 years so I’ll focus on the foreclosure numbers.
One of those upset with the piece was Enzo Morabito, a real estate broker who has long been a top producer in Long Island and the East End. He cites the article’s disconnect with his first-hand experience and emailed me this comment along with data to back up his view:
As I’m sure you all agree, this poorly researched article is sensational, inflammatory and potentially very damaging to the real estate market in the Hamptons.
For me, the New York Post has always been a guilty pleasure of mine for my commute home. Details such as their trademark use of “$” as replacement for “S” in real estate headlines are part of the package – hey, it’s a tabloid. While I’m always appreciative of being included in the New York Post for their real estate coverage, I happen to agree with Enzo and think this one went too far with hyperbole. Admittedly I am skeptical that this single article will damage the East End housing market – and I do think the real estate brokerage industry nationally worries too much about the power of the media over the housing market. But I get their concern because the appraisal industry has been a recipient of blame for housing’s woes in recent years.
The story is based on some sort of report by Property Shark, who is an essential NYC data provider trying to get traction on the East End. I’m sure reports like this are designed to garner PR attention – hey that’s how the media world works.
Are foreclosures expected to rise nearly everywhere in the United States over the next few years? Of course but by widely varying degrees – and that’s not the point being made in this post.
More than 48 homes in the Hamptons worth more than $1 million each are in foreclosure.
Here’s a Suffolk County “distressed” property map by Property Shark which would include short sales that was sent with their release to the media. The problem with this map, as with the old Google Base maps for distressed housing (don’t think they are displayed anymore?) is they are not updated and give the impression that every single property in every market is distressed.
Here’s the latest MLS data crunch recap sent to me by Enzo:
There are 117 Hamptons properties listed on the MLS that are “Short Sale” or “REO/Bank Owned.”
Hamptons includes: East Hampton and Southampton Townships: Eastport, Montauk, Flanders, Water Mill, Bridgehampton, Amagansett, East Hampton, Speonk, Sag Harbor, Westhampton Village, Westhampton, Quogue, Remsenburg, Hampton Bays, East Quogue, Southampton and Southampton Village.
- 74% are under $500K
- 14% are in $500-700K range
- 8% are in $700K to $1 million range
- 4% are over $1 million
HLS/Realnet (MLS) currently 5,116 properties listed as being actively for sale in all of the Hamptons (same communities as noted above), 2,728 above $1M
So I took a look at the numbers provided by Enzo, consistent with my experiences, and applied my math:
- 53% of all East End listings are above $1M
- 34% of all East End 2011 sales were above $1M
- 4% of all East End listings above $1M are short sale/REO
- 1.76% of all East End listings above $1M are REO.
- Market share of foreclosure activity declines moving from bottom to top.
I would guesstimate that overall foreclosures in the East End market are historically just under 1%.
After considering all this, I found Property Shark’s pronouncement that 48 foreclosure listings are the highest total in 30 years is misleading because no context was provided.
Although I don’t have and historical data series for Hamptons REO going back 30 years, just because Property Shark cites it as the “highest” doesn’t mean it is a “high” number.
I’m not being an apologist for anyone here but c’mon data providers and media, let’s remember to provide context for everything we analyze and present. People trust information they read to be at least reasonably reliable.
- The ‘$lam’ptons: Unsold & foreclosed homes plague East End [New York Post]
- Property Shark
- Enzo Moribito Team