Thursday, May 04, 2006

Rumour via Grim via Grunt

This was posted on Grim's Northern NJ Blog, which was linked to the Property Grunt blog.

"The Grunt has heard on the wire that Bank of America has ceased all lending to all real estate LLCs. This is highly signifigant since no real estate investor in their right mind would ever purchase an investment property without an LLC and it is also indication of the current mood in the lending world."

Full article...


Blogger njcoast said...

How about The Monmouth County real estate mogel Solomon Dwek who bounced a $25 million check to PNC bank? The story was in today's Asbury Park Press. I did some research and his Monmouth County holdings were 137, all of which are mortgaged to the hilt. Judge Lehrer has frozen all his assets, The house of cards is F-A-L-L-I-N-G.

Thursday, May 04, 2006 10:40:00 PM  
Anonymous Anonymous said...

Finally, the NY Times has published an article alluding to the softening real estate market in the Hamptons. Since probably every other muckety muck at the Times owns out there, it was likely a very tough thing to have to do!

Like so many of the mainstream media's bubble pronouncements, you have to read between the lines and realize it's much worse than what they're saying. I believe this is just the very beginning out there and future articles will tell some real horror tales.

Related to this, following is where you can click on a recent report that talks about specific price declines in this area: "Real Estate Market in the Five Eastern Towns of Long Island" in PDF Format-

Perhaps a nice 30-40% crash will humble some of the people out there who seem to care about nothing but bragging of their riches and how smart they were to get them. The NY Times article will surely change the tenor at cocktail parties this weekend!


May 5, 2006

It's Not Too Late for East End Rentals


IN a reversal of what has been the trend in the Hamptons over recent years, more people are renting and fewer are buying this summer, brokers say.
Potential vacation-home buyers seem to be hanging back amid rising interest rates and a slower appreciation of home values, with many houses currently for sale lingering on the market, according to interviews with about 15 real estate brokers over the last few weeks.

In contrast, the rental market is showing renewed signs of strength. In one three-week period in March, said Lawrence Porter, an owner and the broker of the Westhampton Beach office of Brown Harris Stevens, he rented two oceanfront homes and another on the bay for full-season prices of $160,000 to $275,000. "Rich people are renting," Mr. Porter said, "and paying fabulous money for fabulous homes."

Mr. Porter estimated that prices had risen by about 7 percent over last year, for homes farther inland and north of Montauk Highway, all the way up to 20 percent for some properties, like a five-acre estate on Georgica Pond, renting for $600,000 for the season.

For the somewhat less affluent, whether they seek the cachet of the Hamptons, artistic seclusion in Montauk Point, the vineyards and the lush green fields of the North Fork or the fun-loving ferry crowd in Ocean Beach on Fire Island, there are some more-affordable deals, brokers say, even though it's late in the renting season. The Internet — from Craigslist to vacation rental portals like Vacation Rentals by Owner ( — is full of rentals available on the South and North Forks and on Fire Island.
These can range from $1,500 for a week in a two-bedroom apartment in the Fire Island Pines (Craigslist) to $55,000 for a month in a three-bedroom oceanfront home in Amagansett (

In the Hamptons, renters started coming in January and have continued to stream through the offices of Prudential Douglas Elliman, said Paul Brennan, Prudential's regional manager for the Hamptons. "People are feeling uneasy about putting huge amounts of money into buying a summer home," he said. "So if people are not buying, then they're saying, 'Let's rent.' "

Judi Desiderio of Town & Country Real Estate in East Hampton said she judged the strength of the rental market by the feedback from the landlords who have put homes up for rent. A lot of landlords who did not have tenants the last few years are renting this year, she said.

One four-bedroom rental with a heated pool on Two Holes of Water Road in East Hampton was listed at $40,000 last year, but rented in late spring for $24,000 for the full season. This summer the house rented before spring for the full $40,000, she said.

Another five-bedroom listing with a tennis court rented last year for August only, for $45,000, but this year is leased for the full season for $75,000, she said.

On the South Fork, less stratospherically priced rentals can be found in Hampton Bays, Shinnecock, Springs and some small homes in the dunes in Amagansett, Mr. Brennan said; prices range from $25,000 to $50,000 for the season.

FOR singles or couples who want to get away from it all, there are cottages on the water still available at relatively reasonable rates, including a 300-square-foot cottage in Montauk for $9,500 for the entire season. That spare blue and white little house has a kitchen, a living area, a full bath, a bay window and two Adirondack chairs on a small wood deck facing the water. It is listed on Rick Herrmann's "owner-direct" vacation rental Web site,

Paying less for a rental home farther inland can be a good option, especially when there are places to store the beach chairs and umbrellas right on the water. Westhampton Bath and Tennis Hotel and Marina still has cabins, or closetlike lockers and cabanas (including a wet bar and shower) available, at $3,500 to $8,000 for the season.

"It's great for a family with young kids," said Linda Farkas, an agent with Brown Harris Stevens. "You can park in the parking lot, use the beach chaises. They'll give you towels and umbrellas."

East End homebuilders often have good rental deals on new houses. Bryan Whalen, who owns Whalen Contracting Corporation in Hampton Bays, has three spec houses available for rent this summer. "We'd prefer to sell them, but for tax reasons if we're selling too many for a fiscal year, we'll rent them out," Mr. Whalen said. Two of Mr. Whalen's houses available for rent are in Westhampton: a new four-bedroom, three-bath ranch with fireplace and whirlpool, $25,000 for the season; and for $20,000, a three-bedroom, two-bath, completely renovated ranch, within walking distance of the train station. He also has a four-bedroom on Montauk Highway in Hampton Bays, near shops and antiques stores and close to the water: $15,000 for the season.

On the North Fork, although the market has been busy, good properties are still available for all or part of the season, said Sheri Winter Clarry, an agent with Corcoran. Renters will "get more bang for your buck in western areas like Jamesport, Aquebogue and Laurel," Ms. Clarry said. Rents are more expensive near the midsection of the North Fork, in Cutchogue, Southold and Peconic, where prices can be 10 or 20 percent higher.
"Generally cottages are $1,500 a week" in the more affordable areas, Ms.
Clarry said. Rental homes for the whole season are still available for $16,500; July is generally $6,500, August $7,500. June rental homes cost about $5,500 for a "really nice two-bedroom, two-bath," she said.

A house in the midsection with a pool and a "gorgeous view of the water" is $50,000 to about $75,000 for the season. Renters waiting too long may not have as big a choice, but the flip side is that homeowners who decide to rent out at the last minute or whose houses are still on the market are more open to negotiations. "If they don't have the house rented out for the season, they'll call you back and try to work something out," Ms. Clarry said. "It never hurts to ask."

For the devout carless, there are apartments for rent in the village of Greenport, a hip destination just west of Orient Point on the tip of the North Fork. A branch of the Long Island Rail Road ends in Greenport, next to the central harborfront park, with its meandering wooden walkways, sprinkler park and refurbished carousel. A two-bedroom over a storefront there rents for about $2,000 a month, said Kathleen Travers, an agent with Prudential Douglas Elliman in Southold. The beaches are about a mile away, she said, so bring a bicycle.

Sarah Edwards-Schmidt and her husband, Dennis Schmidt, opted against a Jersey Shore getaway or a mountain retreat in the Catskills and decided to look on Long Island. "I've heard about the North Fork for years," Ms.
Edwards-Schmidt said. "We're big food and wine folks." The Schmidts, who live in a Park Slope brownstone, turned down a house on the water for a shingle country house farther inland, in Southold.

"The house that we ended up taking was just so beautiful that I didn't mind that it wasn't on the water," Ms. Schmidt said. It is still available for August for $16,500, Ms. Clarry said. (The Schmidts wouldn't say what they paid, but it was less.)

ON most of Fire Island, oceanfront rentals for the full season are gone, brokers said, but there are still rentals available by the week or for a month. Dana Wallace, a broker in Ocean Beach, said that most of this year's full-season rentals were gone by March. "I have only a handful of full-season rentals left," he said. Oceanfront houses for the full season are $50,000 to $70,000. Monthly rentals for July or August are $12,000 to $20,000, he said.

For two weeks in July or August, rentals are $6,000 to $9,000. "Outrageous oceanfront pool houses go as high as $15,000 a week," Mr. Wallace said.

Ocean Beach prices are about the same as last year, said Megan Wallace, a broker and the daughter of Dana Wallace.

Ocean Beach, a half-hour ferry ride from Bay Shore, has about 600 homes and a bustling main street with shops, restaurants, window-service ice cream and small hotels.

Partying runs late into the night, and the area is noisy, but there are some attractive rentals right in town. Harvey Levine, a Brooklyn native, runs the Seasons Bed and Breakfast just off Bay Walk. He also has a four-bedroom house for rent across the street, available for July for $15,000.

The Pines and the smaller Cherry Grove, predominantly gay communities on Fire Island, reachable by ferry from Sayville, charm visitors with wooden boardwalk "streets" and a steady stock of rentals available each summer.
But renters and landlords are changing. "We have a tremendous number of weeklies this year," said Evelyn Danko, of A Summer Place Realty in Cherry Grove. "They're also higher end. Normally, if people are renting for a week, they want a one-bedroom or a studio. This year, they want two- and three-bedrooms."

Cherry Grove prices are about $5,500 for a studio to $30,000 for a three-bedroom on the bay or on the ocean for the season, about the same as last year, Ms. Danko said. A studio rents weekly for about $1,100, a two-bedroom for about $1,900 and a three-bedroom on the ocean for $3,000, she said.

In the Pines, a three-bedroom, two-bath house with a pool starts at $4,000 a week on average, said Doreen Katen of D. Katen Fire Island Properties. On the ocean, prices range from $10,000 a week for a three-bedroom up to $20,000 a week for a four- or five-bedroom with a pool and a staff.

Friday, May 05, 2006 12:26:00 PM  
Blogger jhawk92 said...

This is a huge thing...if BofA is backing out of this market, you can assume that most or all of the big banks are at least considering the same thing.

Then, the investors are dead in the water. They only can survive on the confidence of lenders. Once that's gone, they're done.

Next, when the investors have to dump property and investors, flippers are done, pricing corrections start to happen.

Get comfortable, the bloodbath has begun, just remember it will be in slow motion...

Saturday, May 06, 2006 9:34:00 PM  
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