Sales Suffer in a Wealthy ZIP Code

Sales Suffer in a Wealthy ZIP Code


A SPACIOUS four-bedroom three-and-a-half-bath split ranch with an in-ground gunite pool and a cabana on two and a half acres with backyard to die for: Billee and Irving Spodek’s house went on the market last May for $1.975 million, and they accepted an offer on it within three months. But in October, just days before the closing, the stock market tanked, the bank withdrew its mortgage commitment and the deal fell through.


They quickly relisted the property, but to no avail. “I barely showed the house all winter,” said Ms. Spodek, an agent for Coldwell Banker in East Hills, who had planned to downsize.
Her house remains unsold; the listing price has dropped to $1.785 million, with nary a serious buyer in sight.


The Spodeks’ situation is not unusual in this wealthy village of about 1,100 homes and estates set along winding scenic roads, with its horse trails, polo fields, gardens and two country clubs. According to the Multiple Listing Service of Long Island, 88 homes here are on the market, priced from $949,000 to $20 million.


As if it were needed, here is more proof of how hard the downturn has hit the luxury market. According to a report by Prudential Douglas Elliman, it was the North Shore submarket — from Kings Point to Laurel Hollow, north of the Long Island Expressway and Route 25 — that showed Long Island’s largest decline in the first quarter of this year. The number of sales fell 40.3 percent, to 216 units.


Old Westbury is the heart of the North Shore. Its ZIP code, 11568, is ranked as the 10th most affluent in the country. From Jan. 1 through May 1, it had two home sales; last year over the same period, there were seven.


Dottie Herman, president and chief executive of Prudential Douglas Elliman, said there was a backlog of homes priced at $2 million to $4 million. Some belong to people who lost money in the Ponzi scheme constructed by Bernard Madoff, Ms. Herman said, while others are either casualties of the financial crisis or simply seeking to downsize.


Looking more broadly at Nassau County, the Multiple List Service of Long Island found that from Jan. 1 through May 6, four homes sold at $3 million or above, versus 24 a year earlier. In the $2 million to $3 million range, 16 homes sold in the first four months of this year, versus 46 in that period last year. Of homes priced at $1 million to $2 million, 67 have sold so far this year, versus 140 last year.


Marc Schwaber, president and chief executive of the Melville- and Manhattan-based Preferred Empire mortgage company, said that the high end had suffered the most, and that the market had “clearly dropped by 30 percent.”


Banks are looking for larger down payments and scrutinizing credit histories and income. And even loans of up to $729,000 — the line above which mortgages become so-called jumbo loans — aren’t sufficient in a village where starting prices approach $1 million, he said.
Thomas A. Toscano, a Mineola-based real estate lawyer who represents lenders, says jumbo mortgages, which carry higher interest rates, are more difficult to obtain.
Jonathan J. Miller, a real estate appraiser and president of the Manhattan-based Miller Samuel Inc., is the author of the Prudential report. He said that with inventory rising in higher-priced housing markets, sale activities were “disproportionately lower.” Even those with stellar credit ratings and deep pockets may not have $1 million to plunk down as a 50 percent down payment on a $2 million home, he pointed out.



While buyers may think that with so much inventory they can “buy things at a fire sale,” Mr. Miller said, sellers “aren’t in sync” and may not be willing to “negotiate aggressively to the amount the buyers expect.” A result is fewer deals.
As for Ms. Spodek, she declared that buyers were “taking advantage” of sellers, and that she would not sell if she had to lower her price any further.
“If I had sold my house two years ago,” she added, “I would have gotten over $2 million for it. They are coming in with lowball offers, and you are supposed to say, ‘Thank you for buying my home.’ They are giving you crumbs. They want a $3 million house for $1 million.”
On her quiet road in the prime Jericho School District, all she hears “is crickets and birds,” she said. She also described her home — which has been featured in the Nickelodeon commercial “Got Chocolate Milk” and a New York State Lottery commercial — as “a good deal,” even considering its $30,404 yearly tax bill, which is slightly lower than many of her neighbors’.
Property taxes are a deterrent in areas like Old Westbury, said Anthony Piscopio, manager of Century 21 Laffey Syosset; he described them as having gone “through the roof.” Taxes on a $1.6 million expanded ranch that sold this year were $24,806; a French manor house that sold for $4 million carried a $45,269 bill. “A lot of the people that are selling in the higher end are downsizing because of cost,” Mr. Piscopio pointed out.


Among his listings is the four-acre estate of Victoria Gotti, daughter of the Mafia figure John Gotti — who not long ago starred, along with her columned white-brick mansion, in the cable TV show “Growing Up Gotti.” The property has fountains, a pool with cascading waterfalls, a guest house, and a stable with paddock. It carries an annual tax tab of $81,204, including village taxes of $12,832.


On and off the market for the last five years, and at one time listed for $4.8 million, the estate went into foreclosure on May 5, according to a state appellate court ruling, because mortgage payments had not been made since 2006. Dollinger, Gonski & Grossman, the Carle Place law firm representing Ms. Gotti, declined to comment.


Last Tuesday, according to Mr. Piscopio, the price was lowered to $2.3 million, from a range of $2.9 million to $3.2 million. The range given in December was $3.2 million to $3.5 million.

Source: New York Times By MARCELLE S. FISCHLER