"ALL REAL ESTATE IS LOCAL" TAKES ON MORE MEANING, ESPECIALLY IN TODAY'S MARKET!

While this phrase keeps coming up in the press, in boardrooms, and in real estate offices across this land, "All real estate is local" has an even deeper meaning to me today than last year, or last month or even last week.

I hope to explain to all those who may be interested, how this market differs from most; the following may not be applicable to any other marketplace, but it is totally unique, and to me it's uniqueness is it's real value.

The Nation is tied in knots right now regarding the sub-prime mess and no one is an exception to it. Even if our individual markets are not the place where sub-prime loans were the order of the day, they (sub-prime loans) are affecting everything we know and do about our own real-estate markets.

THE HAMPTONS

This misunderstanding is not too far out of reach, especially if you are in the media and trying to capture the attention of the nation in order to properly inform the masses of how the sub-prime loans are affecting them. However, if you are in a part of the country where your clients and customers are from New York City and the local market is a second home community, not a primary one, it becomes difficult to help buyers to see the real picture. Buyers hear what is said in the media and interpret it to be applicable to the Hamptons, even though it does not apply. Therefore, we ARE being affected in a dramatic way. How long it will affect this market is up for discussion; I believe that when the pent up list of buyers realize that houses are still selling here and the prices have not dropped as was expected, they will start a buying frenzy of unthinkable proportions.

Now, granted, this is purely my own opinion but let me explain how I see it from my position here in the Hamptons: small marketing area, average price on homes for 3Q 07 was $2,005,685, (+24.4%) median sales price at $1,030,000 (+21.1%) with the number of sales at 361 (-21.5%) in 151 (+25.8%) days on the market. Our listing inventory was 3,742 units for 3Q 07 versus 2,802 for 2Q 07. (inventory for the prior year is not available). This is hardly typical of the rest of the nation and I know that these figures will change drastically for 4Q 07 and especially for the 1Q 08 and not for the better.

If you were to compare these figures with another one, not too far away (10 minutes by train and 30 minutes by car) you would see the reality of what "local" market identification really means.

NORTH FORK for 3Q 07 Ave. sales price:$707.983 with a +1.8% increase and Med. sales price at $522,500 with a -2.3% decrease. Number of sales decreased from 147 units to 66 units (or -55.1% from 2Q to 3Q of 07) and from 154 units for 3Q 06. The listing inventory stayed much the same: 733 for 3Q and 699 for 2Q of 07.

NOW THIS IS LOCAL!!

The rest of Long island falls in line with the rest of the nation and in fact, in pockets has suffered even greater losses of homeownership than the Midwest and Florida. We tend to think of the Hamptons as a suburb of New York City. In fact, we share an affinity with the city that goes beyond the standard market differences.

I worked in New York City for the first 6 years of my real estate career. I worked on the upper East side of New York and "cut" my teeth on the business by dealing with the same crowd that populates the Hamptons.

In 1995 when I was working in Manhattan, the trend toward owners listing their co-ops and condos as exclusives became the way that the business was done with the most efficiency...open houses are the number 1 source of sales in the city; an apartment can come on the market on a Thursday and be sold at an open house the next day---at least that is what happened when the market was thriving. Open houses were done only when one had an "Exclusive right to Sell" agreement with the homeowner. Exclusive Right to Sell was the standard choice that homeowners made in the city and thus the Hamptons, when it came time to sell their second homes. With the Exclusive Right to Sell came the commitment on the part of the brokerage community to handle these listings with kid gloves. Advertise, do open houses, be the keeper of the key and in general become the homeowners right arm and shadow self. These owners are not usually in residence so it is of particular importance to be available at all times to serve both the buyer and the sellers every whim. Here in the Hamptons, we work 7 days a week, hoping to be able to grab a day here or there to get the much needed break from the business. Weekends are our busiest time because that is when people are here.

THE ANTI-MLS

Neither the City or the Hamptons ever joined MLS. We did try to at certain points but discovered that that particular system fell far short of our needs when it came to "handling" the listings as the owners want us to. Not meaning to be an elitist, I fully understand that houses which contain major art collections and other valuables that another seller may not own need to be treated carefully and with much tolerance of the owners concerns.

Not only that, it was discovered that if we listed the more expensive properties on MLS, there was a groundswell of agents who do not know the market here, have no interest in knowing it but just want to sell the "Big Ticket" houses. That agent who has no clue as to the property values from one street to the next or from the North side of the highway to the South does not do any justice to a buyer or a seller by trying to sell in this area. This issue is a controversial one; how can you overcome the problem?....referrals. Referrals are a mainstay in this market; in fact, if an agent does not participate in the referral business, he/she is missing out on the biggest source of business available anywhere in this country.

We have our fiduciary responsibility to the seller, however if someone decides that they want to work as a Buyers Broker, they are able to do so by separate agreement, and this is disclosed to the seller at the time of a transaction. An agent can not give undivided loyalty to two or more principles in the same transaction. Thus, real estate license laws prohibit a broker from representing and collecting compensation from both parties to a transaction without their prior knowledge and consent. "more difficult to handle is the situation in which a seller's broker for example, emotionally adopts a buyer and unconsciously begins to work for the buyers's best interest, so that an unintended and illegal dual agency results. One could be acting as a dual agent even if not being paid by both parties." (from the Law of Agency, Modern Real Estate Practice in New York)

HERE'S TO OUR DIFFERENCES; LET'S CELEBRATE THEM!

It may seem to some out there that those of us who are fortunate enough to be living in the most beautiful "light" in the world could not possibly amount to a hill of beans. Not only that to be able to work in it, that beautiful "light", but to be able to spend our working hours walking through some of the most wonderful, historic and picture perfect properties in this country must mean that we are "light" in other ways. Well, don't be so quick to jump to conclusions. I at least have made peace with it. I have a connection with far greater things than just making a living. I, at least have an agreement with myself that I will do what I can to preserve the beauty, the history and the "light". And if it means I can make a few bucks while I do it, how bad is that???