Episode 105 - Mark Greenwald

Discussing The Year-End Hamptons Real Estate Market Report and Inventory

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Transcript

Andrew Doud 0:08

Alright everyone, it's Thursday. I'm Andrew Doud. It's time for Happening in the Hamptons Podcast, our weekly breakdown of the Hamptons market new listings and events on the East End. We are sponsored today by New York Title Abstract, the Hamptons leading title insurance firm. Visit NewYorktitle.com. And we have the whole crew back this week. Steve is back from Florida. Dave is back from Dominican Republic. I never really left. And we're also joined today by Mark Greenwald. Mark, how are you? Good to have you back on the show. Oh, thank you for inviting me. Um, lots to cover, and we're gonna mix things up a little bit today. Uh, we're gonna start actually with Steve, who has the year end report. So we want to get those numbers, and that will, correct me if I'm wrong, be posted on our website, Saunders.com, later today. Correct.

Steve Glick 0:52

Yeah, it will be it will be posted later today. And good morning, everybody. I always say we we put out the Saunders report six weeks after the market closes, and people question why do you do that? We want to wait for all the transactions to be recorded with the town of Stuff County, and it's really important that we have accurate data putting out there. Some reports get out there really early, and they don't really have all of the transactions. So it's best to wait for them to be recorded, and they still trickle in. Even after six weeks, we still see some trades coming in. So to really get the full 100% accurate report, you really wait about three months for it all to come in and be recorded. So, however, six weeks is a good time to cut it off and pull the numbers. So I want to first dive into what the fourth quarter of 2022 looked like. So the fourth quarter of 2022, we saw a median price decrease by only 1.4%. So the new median price for all sales in the Hamptons is $1.59 million. Sales transactions in the fourth quarter alone saw a decrease of 80%, and the dollar volume also saw a decrease of 80%, coming in at $597 million for the fourth quarter. So the fourth quarter was definitely a the slowest quarter out of all the quarters that we had in 2022. hopefully does not continue for the first quarter of 2023. So now let's get into the year-end numbers of 2022. We saw a median sale price rise 6.7% with a median price of 1.6 million, and that's of all sales. But if you just break it down for home sales, the median sale price rose 3% to $1.7 million. The sales transactions for all sales in the Hamptons did decrease by 46%, and their dollar volume also decreased by 42%, coming in at a total of $5.9 billion. Now, when you look at the $5.9 billion, you say, geez, that was you know a decrease of 42% from last year when last year was $10.2 billion. That was the first year ever we eclipsed $10 billion in Hampton's real estate. But the $5.9 billion is still the third best year in Hampton's real estate. Okay, third best year. The best year was 2021, the second was 2020, and now we have 2022 with $5.9 billion in total sales. And now we have, you know, Mark Greenwald, you know, we were just dissecting that numbers. What is, you know, when you look at the number of 2022, how do you compare that to other years in the market? You know, obviously you want to extract the two COVID quote unquote COVID years of 2021 and 2020. So where does 2022 fall at 5.9 billion?

Mark Greenwald 3:44

Yeah, we're on the same page, Steve. So I think what we do need to realize is that we're returning to a more normal market that we should be comparing 2022 numbers to the last normal market year, which is 2019. When you go back to 2019, the news is good. the the thing that we really do need to look at is everybody in the market now is talking about how low the inventory is. Everybody is wondering where they can find inventory. Regarding inventory levels, we have to look at this numerically. Our running inventory of properties for sale in 2019 was over 4,000 units. And now we have a running inventory of properties for sale of only around 1,400 units. So the question to me is isn't it great news that we can sustain sales levels with an inventory level that is one-third of the inventory level that it was in 2019? And that's that's a sign of a vibrant market.

Dave Rattiner 5:00

demand people where people want to continue to transact.

Steve Glick 5:04

Imagine there were to imagine there were 4,000 listings on the market. Where would that $5.9 billion land at, right? If there is more inventory for people to transact and to purchase to buy, you know, we can only imagine where those numbers would would go to.

Andrew Doud 5:19

So if you're looking at that and uh, you know, it's obviously been a seller's market here for a while. What what are you telling? Is it still the the the good time to list your house and why?

Mark Greenwald 5:31

Right now, if you have plans to sell any time in the near future, this is one of the best times ever to put your house on the market for sale because I'm doing this 24-7, and the problem that I am confronting with my buyers, and I work with both buyers and sellers, but the problem that I am confronting with my buyers is there is a disappointing array of good houses to show them for sale. They want to buy, uh, but they are going to wait to buy the right house at the right price. Now is the best time to put your house on the market because the inventory is so low. It is also the best time of year to put your house on the market because more customers are actively looking in this market, deciding whether to rent this summer or to make their purchase. If you have the right house at the right price, there will be a buyer at this time.

Andrew Doud 6:26

I think that's an important point and one that's come up the last couple of times we've discussed this in the podcast is that even though there is a low inventory, pricing still matters. And you have those buyers that are kind of waiting in the wings, you know, they're like, I want the right house and I want it at the right price. So even if they find the right house mark, uh, but it's overpriced, what kind of situation does that put them in? And what's your conversation with those buyers then?

Mark Greenwald 6:49

What I have been finding is that there is some softness in pricing. You can, for the first time in a few years, seriously overprice your house. But what we're doing now is we're returning to an equilibrium. We're finding our equilibrium, meaning that as inventory is low and there are buyers out there, there is room for negotiation on pricing. But sales will be made, we just have to come back to an equilibrium where sellers realize what the true price for their house is right now, listen to the market, and buyers feel the same way.

Dave Rattiner 7:31

Are you finding that this is true? You can't just put any property out there on the market, you have to really present it properly. Like I can remember just a few years ago where literally anything you put up on the market would sell quite quickly. You could take a photo with your iPhone, you could not even list it really, you could just whisper that it was going up for sale and you could find a buyer. Are you finding that now it's a lot more important to you know get the survey, colorize the survey, get the aerials, get the drone shots, tell the story of the property with the ad copy, like really present it properly?

Mark Greenwald 8:12

Uh-huh. no, 100%, Dave. And and that's what we do very well here at Saunders is every seller when they're putting their house on the market needs to understand what questions the buyers will have, and they they need to pave the road for the buyers. Everybody knows what questions the buyers will need answered in order to step forward. So why not why not organize your listing so that you can have a smooth transaction?

Steve Glick 8:40

I say that every time. I said know what it is that you're selling before you list a property because immediately as soon as you put that mark that listing onto the market with this low inventory, you're gonna get calls. People are gonna have questions. And the first impression is important. So when you get an agent or a potential buyer calling you with a question about what you could do with the property, is what's the square footage here, what's that there, you want to have all those answers so you don't fumble the transaction.

Andrew Doud 9:03

Yeah, last thing you want to say is let let me get back to you on that.

Steve Glick 9:06

You know, but looking back, you know, pricing is always key. Yes, home prices have rose, right? When Mark is looking at 2019 versus 2022, the median sale price in 2019 was $960,000. Now the median sell price in 2022, fast forward to 22, is $1.6 million. So that's a 72% increase in median price. Pricing is still key though. Yes, you can get more for your home than what you were doing in 2022. Every year, we always say that Hampton's real estate is the best investment, and we see it year over year, these homes are worth more every year, and it's a great investment over the 10-year period. You could look at it, you could certainly um, you know, create a generational wealth with your property. However, pricing is still key, and you have to be sensitive to the market. And if you have a listing on online on the market listed, and you're not getting the activity that you're hoping for, you know, work with your agent. Look at what's been reduced, look at what's been selling, look at days on the market, and consider a small reduction in price. That will certainly spark some new activity. We've seen it time and time again. We just saw a property even just get reduced by you know $30,000, and immediately the phone started ringing. So I would say no reduction is too small when you're looking at that property. But pricing is always key. And like Dave said, presenting the property, no matter what type of market, you always want to do your due diligence and get as much information out there to the agents and to the public about the property. And information is powerful, right? To have that. It's you know, knowledge is powerful. Yeah, it's it's what's it's what's needed to transact in this market.

Andrew Doud 10:44

I'm gonna take that and I'm gonna segue to your weekly numbers. I want to go and send it back to you because that is the information that's most available.

Steve Glick 10:54

It's key to pay attention to what's happening weekly in the market, looking at what's being reduced, looking at what's going into contract, and looking at what's coming online. So this past week is no different. There were 17 listings that went into contract. Last year there were 35 listings, which is a decrease of 51%, and in 2021, there were 74 listings that went into contract, which is a decrease from 2021 of 77%. The 17 transactions this week, there was three between four and six million, four between two and four million, and ten under two million. Their dollar volume this past week was thirty-nine million, last year was 118 million, and the year prior was 224 million. This week there were 25 new listings coming onto the market. So people are taking the advice, listening to Mark. That increases the inventory by eight listings. So we've seen that's a good increase. Eight listings is good. You know, 10 would be better, but I like eight. Um, the breakdown of these 25 new listings, there is one between 10 and 20 million, one between eight and ten million, and two between six and eight million, three between four and six million, seven between two and four million, eleven under two million. As you can see, new listings in all different price categories. The inventory stands at sixteen hundred and fifty-one total listings, which is brings the active listings to twelve hundred and thirty-two in contract listings four hundred and nineteen. So twelve hundred and thirty-two active listings. So if you're out there looking for a listing, there are twelve hundred and thirty-two available properties to look at. Still low inventory, great time to list your home for sale.

Dave Rattiner 12:28

That's interesting. Do you have like a like a vision for the future, or at least what what do you think is gonna happen this summer in terms of prices and rentals and like sort of a macro view on the market in the Hamptons?

Mark Greenwald 12:41

Yes, I I would re-emphasize that some sellers are opting to put their house on the market for rent rather than to sell. I think that may be a mistake. Everybody has their own personal reasons for doing so. But I think that this is the best time to sell your house if you have any plans to sell your house in the next you know several years. So what I am seeing is an increase in the available number of rentals, and I do think that that's many homeowners in the market who are not ready to sell and are opting instead to offer their house for rent and you know perhaps sell in the future. But with the inventories as low as they are right now, we may not find a better time to sell over the next several years.

Dave Rattiner 13:36

Do you feel so do you feel that there's like almost a danger to wait to sell if you have a if you have a plan to sell at some point in the next four or five years, you would say now's the time to jump on it?

Mark Greenwald 13:50

Well, I can't yeah, because I I can't see everybody has their own personal reasons for selling or not selling or renting or buying time, but I cannot see inventory levels going any lower. as you just saw in the past week or so, we may start to see inventory levels start to increase. if I was a seller, I would try to make my deal now because look at the inventory levels. Steve just mentioned, you know, we have 1,250 active properties, houses, and land for sale. In 2019, it was over 4,000 units. You know, that's a dramatic change in inventory. That inventory level I can't imagine can can hold this low.

Andrew Doud 14:33

You mentioned rentals. Are you dealing a lot with the the rental market? and what does that look like?

Mark Greenwald 14:40

Well the rental market started to become very active. there are many, many people coming out to uh rent this summer. most of the brokers and and other people that I talked to about the rental market see it as particularly active right now. It seems to be starting earlier too. That could be weather related. I do get the sense that there are more rentals on the market than than previously, and I do think that that may be you know people who bought with low interest rates who just figure they can they can hold their their properties for a while. Yeah.

Andrew Doud 15:17

all right, Dave, we'll send it over to you, man. What do you got?

Dave Rattiner 15:21

What's going on this weekend? Sure. So I mean it's the dead of winter, even though it's but it feels great outside.

Steve Glick 15:27

All right, feels like we're on a beautiful day.

Dave Rattiner 15:29

You know, let me just top this right now, or I say this right now in terms of what to do this weekend is if it is nice out, do not hesitate to either go by yourself or with your wife or your husband or your kid or your dog and go to the beach and take a walk on the beach in this weather in the middle of winter. It is so rare that you can walk so comfortably on the beach. Two days ago I went to Bain Beach and I walked all the way to Georgica Beach and I was wearing nothing but a light sweater and there was like no wind on the beach, and I was just like just absorbing the sunshine and got like a really nice healthy walk.

Andrew Doud 16:11

And the beach is empty.

Dave Rattiner 16:13

Yeah, and there's just it was like it's just the most wild, it was like a wild experience. Um, and I don't think you know we're gonna win winters like this are so rare. Um, so I guess that's my first one. That was just sort of off the top of my head. In terms of actual events that are happening, there is Las Noches de Salud. How was that?

Andrew Doud 16:32

Well said, Thank you.

Dave Rattiner 16:33

I think all right, so that's at Coche Commodore in Amiganset, and what they're offering is fifteen dollar flights of margarita, margaritas, and they're also it's a flight of it's like five margins.

Andrew Doud 16:46

So like four or five little different margaritas. Yeah, and you taste the different that's dangerous, yeah. Okay, it's a lot flight of margaritas, an apron to that. Maybe have uh, you know, a Uber app. Well, that's there's okay.

Dave Rattiner 17:00

The last the coach commodore their thing is is like specialty mezcals, and like you go there, there's like a million different tequilas behind the thing. Okay. So if you're into tequila, I feel like tequila has really taken over in terms of like the go-to drink. Like I'm not that crazy about it, but I know a lot of people are pretty crazy about tequila. Anyway, they also have like small craft craft plates that they're serving there, and this is all in like the bar area, and there's no reservation required. They're they just want to create like a crowd, and they're successfully doing that with this with this unbelievably low priced yeah, it's a good way to get people in. So it's a cool thing. So that's Koch A Commodore and Amiganset, and it's a great local spot that is year-round, owned by the Honest Man Group, which is a bunch of those other restaurants like Nick and Tony's and Town Line Barbecue. So they're super cool. and so this another thing that's going on is they have the winter garden walks at Longhouse Reserve. So basically, this is just a guided tour led by volunteers or the community gardeners at the Longhouse Reserve, and you can go there in the winter time and you can see you know the stuff that grows in the winter, which is witch hazel and the last of the hollyberries, and you can also see a lot of the garden in its like bones where things aren't in bloom, but it's still very beautiful. Um, so the longhouse reserve is a very beautiful spot in East Hampton. Uh, and they are doing that at 11 a.m. and 2 p.m. on February 18th, and then they have another one on March 4th. It's not typical that they do this tour with the with the experts there. So I thought that would be kind of a fun thing to do. Okay. I'm a big believer in the outdoor activities in the Hamptons this weekend. Um, and then finally, I had dinner last Saturday at Vine Street Cafe on Shelter Island, and I totally recommend that restaurant. We had such a nice time there. They make their own ice cream there, they have buttermilk ice cream, they have like vanilla ice cream that comes out with like rich vanilla, and also the food is just like out of this world. It's a go-to destination on Shelter Island, and you kind of have to have a phenomenal restaurant to operate year-round on Shelter Island to get people to get over on the ferry, and so it's a $20 ferry ride, and I had a great time. The place was the place was totally packed, and I was like, man, Shelter Island's the spot. So Vine Street Cafe on Shelter Island, highly recommend that as a as a go-to spot for this weekend if you're looking for something different in the Hamptons.

Andrew Doud 19:44

You're the restaurant guy.

Dave Rattiner 19:45

I I suddenly have become that. So it's Friday, Saturday, Sunday. That's your weekend in the Hamptons.

Andrew Doud 19:52

good stuff.

Mark Greenwald 19:53

Mark, anything else before we wrap the show up? I I think this podcast is wonderful. Um, and this is my my my message to listeners. this is back to what I would regard as a more normal market. We went through a a a unique real estate situation for 2020, 2021, 2022. I've been doing this for 20 years. We're back to a normal market, and we need to remember how the market transacted back in 2017, 18, and and 19. There is there's the right purchaser for the right house. That's what we do at Saunders, that's what I do every day. we match sellers and buyers, and we'll continue to do that and and adjust to the way the market evolves. That's a good message, Denzel.

Andrew Doud 20:53

I like that. Mark, thanks for joining us. Everybody, that was a good show. that's it, everybody. Have a great Thursday. I'm Andrew Dowd, and that is what's happening in the Hamptons.