Karen Szteinberg had been in contract to sell her South Merrick home and in the process of buying a co-op in Freeport — and then Hurricane Sandy hit.
Her home had been unscathed by the superstorm, but the co-op was badly damaged. The South Merrick home eventually sold, but now Szteinberg lives in a short-term rental awaiting an update. Still, she says, the massive storm has not affected her outlook on the Long Island real estate scene.
“There can be a natural disaster or intentional act anywhere you live,” she said. “In all honesty, I have considered moving more inland, but I prefer to live in proximity of my business and friends on the south shore. Wherever I move, it would be a gamble.”
Other Nassau County residents, as well as realtors, have echoed Szteinberg’s sentiment — people want to live where they want to live, despite the havoc caused by — what they hope — is a once-in-a-lifetime storm. However, at least in the short term, many potential buyers have been scared off by properties in neighborhoods on the south shore, whether by future weather events or high insurance coverage costs.
“The impact has been uneven. Along the shore it’s created a lot of concerns and doubts among both buyers and potential sellers,” said Lawrence Levy, executive dean of Hofstra’s National Center for Suburban Studies. “There’s a lot out there about storms being more frequent and worries about getting insurance and it being enough to rebuild and rebuild it the same way.”
Up and down
The number of home sales on the south shore did in fact decline in the last quarter of 2012. In the last months of 2011, 166 home sales were reported, according to a report by real estate firm Douglas Elliman and appraisal firm Miller Samuel. The number of home sales decreased to 127 in the final quarter of 2012, a 23.5 percent decline. On the north shore, homes sales went from 415 in the fourth quarter of 2011 to 530 in 2012, an increase of 27.7 percent.
It’s possible that the drop on the south shore reflects homes that have been taken off the market while their owners complete storm repairs, according to realtors.
Meanwhile, homes are still getting more expensive in Nassau County. In 2011, the average sale price of a south shore home was $402,709 and a north shore home was $858,592, according to the report. Both numbers jumped in 2012, to $453,172 and $969,769, respectively.
The water problem?
Realtors and potential sellers confirmed people’s apprehension toward some properties on the south shore.
“[Sandy] will no doubt change people’s perception of property by the water,” said Patty Murphy, a realtor at Village Plaza Realty in Malverne, who added that properties by the water had been hard to sell for at least two years, likely due to insurance costs.
Jackie Katz-Rabinoff, who had listed her Harbor Green Estates home in Massapequa for sale before Sandy hit, said that although her home had no water damage, “not one person has come to see my house since the storm.”
She added, “South of Merrick Road seems to no longer hold the appeal it used to.”
Some prospective buyers and investors are still looking at homes along the water on the south shore, but at reduced prices, said Seth Levy, of Shawn Elliott Luxury Homes.
Levy pointed to one home in Hewlett Harbor, with a 1.73 acre lot and a tennis court. The large property would have entered the market at $3.5 million had it not been damaged in the storm, Levy estimates, but it is now listed for $1 million less. The home is now in contract.
Another neighborhood in the Five Towns, North Woodmere, saw many homes with flood damage. Still, people have been grabbing the homes there for its lower taxes, according to Donna Galinsky of Pugatch Realty in Woodmere.
“I wish it were black and white, but it isn’t,” she said about Sandy’s impact on Nassau real estate. “We’re still trying to figure it out.”
For many Long Islanders, this storm has not changed their preference toward living near the water.
“People have a lot of pride, and when I hear them talk about what has happened, they plan on rebuilding and staying,” Lindenhurst realtor Jackie Connelly-Fornuff of Century 21 wrote in a Patch blog post. “Living on the water in Lindenhurst is a lifestyle, and these homeowners do not want to give that up.”
Another devastated area, Long Beach, has seen a surge of investors interested in buying homes at heavily-discounted rates.
In Garden City, Sandy only delayed the beginning of the 2013 real estate market due to power outages and needed repairs, according to Stephanie Cullum of Coach Realtors.
The tax threat
Weather events, in the end, may not be the biggest threat to Long Island real estate.
Levy, of Hofstra, said that people are still attracted to Long Island for its high wages, “gorgeous” beaches, park system, governmental services, proximity to New York City and “the best, in aggregate, public school system in the country.”
But Levy warned that something needs to be done to change the “trajectory of property taxes.”
Szteinberg agreed, saying, “I’m an optimist; I’ll worry about the next storm in another 40 to 50 years from now. But way before then, I will probably have already moved off of Long Island due to our high taxes.”