Reflections
A look back at the year in real estate
By Diane Saatchi
As I launch this blog, 2015 is coming to a close. The jury is still out on how the year compares with prior years, since we won’t have news of all sales closed in the year until the end of the first quarter 2016.
There are, however, a few trends and events on which we can already reflect.
There were hugely expensive sales, as well as many more modestly priced.
Photo by Morgan Anderson
There was a sale well over $100 million this year, which spurred some owners who felt they had comparable properties to list in that price range. Similarly, a number of homeowners chose not to list formally once news spread of this sale, but expressed openness to their real estate agents that should a likely buyer come along, they would sell.
Likewise, there was a record number of sales under $1 million. Low mortgage interest rates and a healthy local economy made it possible for both year-round residents and those wishing to become second homeowners to enter our market.
This year’s rental market was very perplexing.
Many homes that ordinarily get rented … didn’t. A lot of those that were rented didn’t happen through brokers. Home rental sites like Airbnb, HomeAway, and VRBO posted thousands of owner-listed rentals. Homeowners who are used to renting their house for the season or by the month have taken to the web and are renting for shorter terms. That’s creating a new and not yet defined industry, and also led to another major development in the local market this year:
East Hampton Town will enact a rental registry.
In the registry, homeowners must file for permits to have renters.
The growing popularity of Montauk, which falls within the borders of East Hampton Town, might be another reason the town is enacting the Rental Registry Law. Local homeowners are unhappy with the crowds attracted to short-term rentals (though the influx of visitors has helped the economy), and therefore the new policies target such arrangements. Those who oppose the registry argue that there are already similar laws in place that aren’t appropriately enforced, and that it looks like getting everyone registered will be an impossible task for the Town.
Southampton Town enacted a similar rental permit law in 2007. It requires the owners to present a floor plan of their house, show that their certificate of occupancy (CO) is up to date, and let the town know of any tenants. There’s a negligible fee for the permit, but the real cost comes in making sure your CO is up to date -- which is why I imagine a lot of people, especially those who really need the income, don’t file for the permits. In the future, I’ll discuss the process of updating a CO in more detail.
Possibly as a result of a change in how rentals happen, the interest in short term rentals, and new legislation affecting landlords, many former rental/investment properties may come on the market for sale.
East Hampton Village has restricted the size of houses built on larger parcels of land.
East Hampton Village enacted publically opposed legislation to limit the size of houses on land over 40,000 square feet, which is a little under an acre and known as a “builder’s acre.” In many cases, this restriction devalues property, because generally those who want big land want big houses. A number of residents who were in the permit process when this law was passed have gotten together and hired a lawyer to sue the Village, because they’re unable to follow through with their original plans and believe the restriction diminishes the value of their assets.
There have also been significant changes in Sag Harbor …
After years of planning and construction, the former Bulova Factory, now the Watchcase Factory, has occupants. The building recently started leasing some of the units, and it looks like it’s making the village -- the shops and restaurants and real estate values -- more vibrant. The three-story, 21,000-square-foot Sag Harbor movie theater, which has quietly been on the market for years, is also now for sale.
photo from www.watchcasefactory.com
photo by Guillaume le Berre
And Bridgehampton ...
In response to strong opposition, the new construction on the corner of Montauk Highway and Lumber Lane didn't become a CVS. Now, the company is exploring the undeveloped land across from Bridgehampton Commons, which is again sparking opposition in the town.
Bridgehampton Main Street - photo by Ben Potter
Next year, you can have a say in what happens in your town.
You may have noticed a theme among many of the year’s biggest changes: They’re enacted by local government supported largely by year round residents. Many second-homeowners don’t realize that, if you own a home in the area, even if it is not your primary residence, you can elect to vote from the address of any one of your homes.
Many citizens vote in the jurisdiction of their vacation home, and such decision does not have bearing on where you file your income tax. You don’t need to be local on election day, you can use an absentee ballot. It is entirely a personal decision, but if you want a say in local government, voting locally is a powerful way to voice your opinion. In a small community, your vote has a strong punch. After all, this is your home, too.
© 2015 Diane Saatchi