Two Brokers, One East End Market's Extremes
By Kate Maier

(Aug. 13, 2009)    Real estate agents and brokers are seeing something that has been frighteningly scarce for the past year here — a spike in activity in the form of showings, with flocks of prospective buyers touring houses and examining vacant land.

    While the trend has not yet been reflected in market reports or even recorded closings, agents are out of their air-conditioned offices and in the field, and things are looking up on both ends of the market, from luxury sales in Sagaponack to families looking for a place to call home in Montauk.

    According to Mitch Cogen, an agent for Atlantic Beach Realty Group in Montauk, the hope is that a floor will soon be established in an uncertain marketplace. “There have been a couple of sales of late that have opened up our eyes as to what the current values are here,” he said. “We’re busy helping people in the market that exists here today, and it really is a different market.”

    On the rental front, “people who wanted a full season this summer, a lot of them have asked for a month. People who have asked for a month are now asking for two weeks. We’re probably working harder because that’s what the market dictates. People just don’t have the expendable funds they had in years past,” but agents are busy working, including Mr. Cogen, who had to postpone his interview because he was busy showing houses all day last week.

    Personable and laid back, Mr. Cogen left a 22-year career as a toy company executive to enjoy a lifestyle more his speed in Montauk. He meets most of his clients while surfing, or during his night job as a bartender at the Sunset Saloon.

    “The office has picked up a tremendous amount of speed in the last two to three weeks,” he said over the phone on Tuesday, as other busy agents and brokers chatted and networked on other phone lines in the background. “We are hoping that offers result from this. We’ve had some and we’re hoping to see more,” he said.

    But one thing is certain — buyers are here, and they are looking at houses with a level of seriousness that agents haven’t seen in quite some time.

    “It’s unbelievable,” said Mr. Cogen’s boss, Lynden Restrepo, a veteran Montauk broker who started Atlantic Beach two years ago. “People were looking, but we weren’t getting as many people, and they weren’t quite ready to pull the trigger. Now, in the last three weeks, we have been so busy it’s unbelievable,” she said.

    “I think I’m not the only guy out there that’s doing business. I think a lot of the top brokers are finding it’s very busy right now,” said Gary DePersia, a senior vice president at the Corcoran Group who recently sent out a press release boasting that over $50 million of his listings had gone to contract or closed since January. “There are showings, and there are deals happening.”

    Mr. DePersia said that the recently piqued interest of speculative developers was another positive sign for the market. “Not only are houses selling, but vacant land, is selling as well. I think when you see activity in vacant land, that really indicates that the market is turning.”

    Mr. DePersia, who was recently rank­ed the fourth top broker in the country by The Wall Street Journal, said that “if showings are any indication,” the East End market is headed for a turnaround.

    “It was very disconcerting for a lot of brokers, after having a run-up for five, six, seven years, to all of a sudden have it become quiet,” he said. “It is too early to tell if those days are behind us, but with the interest that is happening now, there are offers, accepted offers, and new contracts being done.”

    Mr. DePersia said that contracts being drawn up now should be reflected in the coming months, but that “even deals in September and October are going to close the first quarter of next year, for tax purposes,” so that a huge jump in numbers might not show up in market reports right away.

    “Right now I’ve got four different groups that I’m working with today, and they really are looking at different things,” said Mr. Cogen of his work on the Montauk scene. Prospective clients have included a young couple from Brooklyn, a family from upstate searching for the perfect summer home, and “this really nice family from Aspen” that has been looking at hotels, bed-and-breakfasts, and homes.

    Interest has picked up in every segment of the market. For Mr. Cogen “it’s just a matter of time before” his group of interested fish will clamp their jaws on a piece of Montauk property.

    For Mr. DePersia, sales have already started happening. “Since the beginning of the year I’ve probably had six closings, and another one or two in contract,” including Stone Meadow Farm, which at $12.5 million was “the most expensive house to ever sell north of the highway in East Hampton.”

    “It’s busy, not the same numbers I did in 2007, but not terrible.”

    As far as prices go, sellers are beginning to wisen up after the long, cold winter. “There are actually deals on houses that were put on the market with the expectation of the market beginning to rise. Many of those listings had intermediate price drops and they were negotiable from there,” he said. A house that was originally priced at $20 million “dropped to $16.5 million and sold at $12 something, but maybe it shouldn’t have been $20 million to begin with. You have to look at where things should have been priced.”

    “Generally the pulse of the market is very good,” reported Mr. Cogen. “There have been some sales that show that the market has declined somewhere between 20 and 30 percent, but we are busy now with people that are looking. I’ve got people that are looking in the fives, sixes, and sevens, and a group that’s looking in the ones, twos, and threes,” he said, referring to $100,000 and $1 million increments, respectively.

    With realistic drops in selling prices, and a few sales beginning to take hold, both agents believe­ that the East End market might be on its way out of the woods.

    “I think people realize it is very tough to find the bottom of the market,” said Mr. DePersia. “Rather than trying to find the cheapest thing on the market, it might be better to get the best price they can get today.”