Andrew Doud 0:08

It's Thursday, everyone. I'm Mandar Dow. Time for a 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. We have Steve Glick, Dave Retiner, and today Mitch Jen Wilson and Melissa Cohen, our resident mortgage and all things lending expert. How are you guys?

SPEAKER_03 0:31

Good, thank you.

Andrew Doud 0:33

Um, good to have you back on the show, Melissa. We appreciate your time. Uh, Jen, we're here in the heart of the summer. We're past July 4th. This is it. I mean, we're we're full swing. So, how are things? What's the market like? How I assume you're busy. You're always busy.

SPEAKER_03 0:47

Yes, things are very busy. Um, and one of the reasons I wanted to bring Melissa on today was to talk about what's happening in the lending world, uh what she foresees happening over the next couple of months. I personally have seen a lot more buyers come into the market. And I'm working with a lot of buyers in addition to my listing. So it seems like in addition to more inventory, there's definitely more buyers coming in. And I would love to hear um Melissa's perspective.

Sarah Doud 1:17

So I totally totally agree with you, Jen. I think that as mortgage rates have started to decline over the course of the past month, that we've seen more and more buyers willing to come back into the marketplace. Mortgage rates have probably over the past couple of weeks dropped by, in in some cases, by as much as a half a percent, in some cases, maybe a little bit more, uh, giving people you know the incentive to get back into the marketplace. Now, obviously, we're still not looking at rates that are in the fives, but with a lot of options in the low sixes, and if someone's willing to put some money into a bank, we can offer rate options that can be in the high fives. Um, you know, people are feeling much better about the lending environment. We've also seen the Fed over the course of the past week continue their dovish pivot in the sense that while they've said that you know, over the past couple months that they're most likely done with raising rates, they kept saying that they need to see rates stay higher for longer until they have sufficient evidence that the rate of inflation is uh moving down back towards their two percent target goal. Uh, Mr. Powell and other Fed members have spoken over the course of the past week and have really started to indicate that they're just about ready for that first rate cut, uh, which is great news for the marketplace. You know, and especially in our market in the Hamptons, when most purchases take 60 days to close, you know, buyers are feeling better about the rates that they can get, knowing that the likelihood of the first red rate cut will be in September and that mortgage rates will continue to decline during their purchase transactions. Um I think that a lot of people also feel that now is a good time to buy, because when interest rates really start to come down, let's say when they go below six and they go into the mid-fives, more and more buyers are gonna come into the marketplace and prices are likely to go up.

Dave Rattiner 3:21

Can I ask you a question, Melissa? Uh for every hundred thousand dollars you borrow, what does a point mean for a payment?

Sarah Doud 3:29

So if you go from you know six percent to five percent, it'd be a thousand dollars a year, so it'll be eighty-three bucks a month.

Dave Rattiner 3:37

Okay, so it can add up a lot if it could be like a thousand dollars.

Steve Glick 3:41

You're talking about a hundred thousand dollars. Like if you do a million, you tend time you ten zex that's eight hundred and thirty dollars a month.

SPEAKER_02 3:48

That's a lot of money. That's a lot that's that's a lot of money.

Steve Glick 3:51

Melissa, when what when you're doing the mortgages, are you seeing um people doing 80% mortgage or they're doing just like a 25% mortgage, or you know, what type of percentage are they mortgaging the purchase price?

Sarah Doud 4:04

Well, they're you know, if you're looking someone such as a first-time home buyer or someone stretching to buy their first second home, we're seeing more people looking at maximum loan to value, meaning how much financing can they get? Um, you know, first-time home buyers, if it's a primary residence, can get 97% financing up to a million one forty-nine in New York. Um, people who are, you know, trading onto their second or third second home or are looking to borrow less because they have more available capital. But we also have to look at the fact that the stock market is doing very well. And a lot of people would rather keep their money invested in equities and rather take a bigger mortgage in order to, you know, hopefully build both on the the value of their home that they're purchasing, but also the value of their portfolio.

SPEAKER_03 4:50

What are you seeing in terms of construction? Like for an end user, I have a couple of pieces of land for sale, and that's been sort of a sticking point, the higher rates. What are you seeing now?

Sarah Doud 5:05

Well, I think the good news on construction loans, like all other loans, is that the rates are just getting better. Um, you know, construction loans today can be had in the low sixes for someone who's well qualified. Uh, there's some very aggressive construction loan lenders out there. Uh, there are also some very uh aggressive lot loan lenders available in the marketplace today. Now, if you're buying a piece of land, those rates are gonna be higher because the bank will want to see that you're gonna build a house uh on the property as soon as possible. But I'm doing a construction land loan right now in the Hamptons where you know my buyer got a three-year adjustable. He purchased a piece of land for almost $11 million, got 60% financing at 8%, and that will roll into a construction loan in the mid-sixes when he's ready to start building, hopefully within the year.

unknown 5:55

Wow.

Sarah Doud 5:56

That's not bad.

Dave Rattiner 5:57

So is it interest rates that are affecting all these buyers coming in now for you? Or do you think it is?

SPEAKER_03 6:03

I think a lot of people have been sitting on the sidelines and because of rates, but I also think that um people think that the market's gonna soften, and I don't really see that happening. I think as rates come down, like Melissa said, we're gonna see prices, bidding wars, prices going up. Um, and there's more inventory now.

Andrew Doud 6:24

Are you still hearing people talk about this idea of the market softening? And what does that look like to them?

SPEAKER_03 6:28

I was hearing it, and now I think all the people that have been sitting on the sidelines are coming back in because they see that maybe prices have come down a bit. I'm seeing price reductions, and that's what I think people wanted to see, in addition to you know, the rates lowering.

Andrew Doud 6:45

Yeah, and I think uh, you know, we've we've kind of talked about this the last couple months, um, and I think even the last time we had Melissa on the podcast, um, this idea that once the rates do come down to uh a certain rate, whatever that magical number is, if it's five or under five, whatever the case may be, um, that the inventory will spike and so will the prices.

Steve Glick 7:05

So it's you know that's the that's what they say.

Andrew Doud 7:08

Right.

Sarah Doud 7:08

So it's just um it's just interesting that when people are like, oh, the market's gonna you have to remember that so many people are sitting on rates on mortgages with rates in like the high twos, the low threes, you know, the mid-threes. I think when rates, I think when we see a 30-year fixed rate settle back down at that five and a half percent range, which would mean that we would see adjustable rates potentially in the high fours, that's just gonna unlock the floodgates.

unknown 7:34

Yeah.

Steve Glick 7:34

Now, Melissa, now if the um interest rates go down and the home prices go up, do you see anticipate more people taking uh home equity lines of credit on their properties and doing something else with that that money rather than investing into a second property stock market or reinvesting it back into their home?

Sarah Doud 7:51

I mean, we people have, you know, we have incredible equity in our homes already. Um, a lot of people are looking at home equity loans. The problem with a home equity loan is that those rates are expensive. Home equity loans are based over the prime rate. Prime is still at eight and a half percent. So it'll be a while before we see a home equity loan rate at a rate that we actually think is you know aggressive and good. People are today seeming to be tapping home equity loans more for home improvement so that they can stay longer in their home. Debt consolidation, because even at eight and a half, nine and a half, or ten and a half, it's still a lot cheaper than any credit card debt. Um but we're not seeing a lot of people pulling money out to buy just quite yet. When the Fed does start to cut rates, the prime rate will drop. Every rate cut of the Fed funds rate that the Fed makes is will be an equal rate cut in the prime rate. And as the prime rate comes down, I think yes, we will see more people unlocking their equity in order to make other investments. You know, I read an article. I just want to say what you were talking about softening markets. I actually read an article, I think it was last night that I saw it that said if you really want to talk about a softening market, you pretty much just have to go to like Detroit, Michigan. Um marketplace marketplaces like ours, you know, in the Hamptons, are are pretty well protected. You know, there is only one Hamptons, there's only one Southampton, East Hampton, Montauk, and you know, we you can't expand the real estate there. It's not like in Florida where you can just keep, you know, going west, going east, and you know, creating new towns out of you know wasteland, basically.

SPEAKER_03 9:26

I was telling these guys that I went to a house yesterday that I sold to this owner uh in 2019. He bought brand new construction in Georgia, so south of the highway, East Hampton, for $3.5. The house is so beautiful. So he bought it for $3.5. And he's thinking, like, maybe I'll sell it, maybe I'll rent it next year. He wanted to get photos ahead of time because everything is in bloom and it looks so pretty. And I have to tell you, that house is probably worth close to eight right now. He bought at the right time in 2019. Exactly.

Steve Glick 10:03

I'm in the market, it's all about but you should never try to time the market. Well, it's almost impossible to time the market. It's a it's a pointless, it's a pointless effort.

SPEAKER_03 10:13

When you want to buy, yeah, it's a pointless effort.

Steve Glick 10:15

Buy when you can, when you want to, and then there's always options down the line to do restructuring the loan, you know, from a refi or whatever you have there. There's always options.

Sarah Doud 10:25

Absolutely. And we also we have a lot of banks too that now offer a program that's called a post-closing rate modification, meaning that when they take the mortgage today, uh, in a year when rates are lower, they just have to pay a small fee and the bank will modify the rate to the then prevailing market rate without having to go through the full refinancing. Great for them, bad for me, but it's a great feature to be able to sell because people keep saying, Well, I want to wait for rates to come down before I jump into the marketplace. But now we can say, hey, you know, you can jump into the marketplace. Yes, you'll pay a slightly higher rate today, but in 12 months you'll pay a fee of 2,000 bucks and you'll be able to have a new lower rate and you get the same house at what is probably going to be a better price than it would be if you waited a year. Right, exactly.

Steve Glick 11:11

That's a great option.

Sarah Doud 11:12

It's a great option.

Steve Glick 11:13

And you don't have to go through the heading of all the closing costs and and all the paperwork and stuff.

Sarah Doud 11:18

Correct. And dealing with the CEMA so that you avoid the mortgage recording tax, all of that goes away. No appraisal, no tax returns, no nothing. You just sign a document, you write a check, and you get the better rate.

Andrew Doud 11:29

Sign me up. I uh I did that exact same thing in 2020, I think in 22. I did like a loan modification, brought it down to 3%. Nice. Saved a couple hundred bucks, it was like $1,500. And you don't have to send it. I mean, like doing a like a big deal. Yeah, and I mean it saved hundreds of dollars a month. Now we're locked in at this great rate. And uh and Melissa, I don't know, I I assume it's probably comparable. Mine was through a credit union, but that they uh I didn't have to restart the 30-year loan.

Sarah Doud 11:59

It just no, it just it just picks up where you are in the long term and it just changes the rate. And you're still if you're in your second year, you're don't you're not starting with a new 30-year loan where you're gonna have all 30 years worth of interest to pay.

Andrew Doud 12:12

Which was nice.

Dave Rattiner 12:13

Um plays into any of this, you know, does is that affecting people's uh it's a it's a wild card, you know.

Sarah Doud 12:22

If Biden wins, it's more of the same. I think you know, we can feel comforted by the fact that nothing that the rate of inflation is not going to increase. Um obviously I both candidates have their own issues. Uh, if Trump wins, people fear that that's going to be inflationary because of the tariffs that he wants to impose. It'll cause prices to increase here and it'll increase the rate of inflation, and that could push mortgage rates back up theoretically.

Dave Rattiner 12:50

During I feel like during election cycles, also, though, it's interesting hearing Jen say that people are you know coming coming out more often to buy during this time because I feel like every election cycle that I've been through, it always was a slower time. It was always an excuse.

Steve Glick 13:08

We don't know yet. I feel like that's gonna come in November when it's all the debates are going on TV and it things like when November comes.

SPEAKER_02 13:16

Like October, October.

Steve Glick 13:17

Okay, yeah, October, a little premature, maybe mid. Yeah, you're you're premature on that.

SPEAKER_03 13:22

Instead of it slowing down like it would in the past during an election cycle, I think this year, because rates are come are going to come down in September. I feel like we're gonna be so busy this fall with buyers.

Sarah Doud 13:35

Yeah, right. I think that we're gonna be protected from the election because of the fact that there's so much pent-up demand. There are so many people that have been sitting on the sidelines for the past two years. And as mortgage rates come down, I think people are just gonna shrug their shoulders and say, the election's gonna happen. It's not gonna totally change my world. I want to buy, I'm going to buy.

Steve Glick 13:55

Exactly. Yep. Life goes on, you know, with an election. Need a roof. Doesn't matter who the president is, life is gonna continue on. We're all gonna be here.

SPEAKER_03 14:03

You're still gonna want your Hamptons home.

Steve Glick 14:05

Still want to be here in the Hamptons, regardless of who the president is.

Dave Rattiner 14:07

There's always that component with real estate that is just so different than you know, stocks or other investments. It's like you want it.

Steve Glick 14:15

And especially with the Hamptons, it's always gonna be that special place, that special destination that people want to be.

Sarah Doud 14:21

And that protects us, and that's a great thing. We're very lucky to be here in the Hamptons.

Andrew Doud 14:26

Amen. To that point, Steve, let's get the broader overview.

Steve Glick 14:29

All right, let me go with some data points this week. Uh 26 listings went into contract last year at 29, little decrease of 10%, but in 2022 there were only 16, so it's an increase of 62 percent. The breakdown of the 26 transactions, there was three between five and ten million, six between three and five million, four between two and three million, five between one and two million, and eight under one million. The dollar volume was sixty-eight million, last year it was eighty-nine million, that's a decrease of twenty-four percent. But in twenty twenty-two, the dollar volume was forty-five million, that's an increase of fifty-one percent. New listings coming on the market every single week. We're seeing the same thing. Increase in inventory. This week there were thirty-four new listings, increases the inventory by eight listings, and the breakdown of those thirty-four new listings, there was two over twenty million, one between ten and twenty million, five between five and ten million, nine between three and five million, four between two and three million, ten between one and two, and three under a million. Inventory stands at just um under two thousand listings with nineteen hundred and sixty-seven total listings, fifteen hundred and thirty-eight active, and four hundred and twenty-nine in contract. So, same story week over week of the inventory increasing. It's a steady flow of in-contracts. 26 is um pretty average for this time of the year.

Sarah Doud 15:49

Thank you. I just think it's really important to let people understand that there's still a lot of good options out there, and with things like the post-closing rate modifications, that there's really no excuse to wait to buy for rates to come down.

Andrew Doud 16:00

That's a good point.

Sarah Doud 16:01

That's great. That is a good point.

Andrew Doud 16:03

It's great information for people. So, Jen, uh hearing those numbers, I guess that kind of plays into what you're seeing uh in the market.

SPEAKER_03 16:10

Yep, I'm seeing a lot of buyers that have been sitting and waiting coming into the market in all price ranges, um, and more listings coming on, like Steve said, which is great.

Andrew Doud 16:22

Yeah.

SPEAKER_03 16:23

So it's sort of all like it's all it's sort of all like, you know, happening at the same time, which to me means that we're gonna have a very busy second half.

Steve Glick 16:35

Oh, right. That's what I like to hear.

Andrew Doud 16:36

That's it.

Steve Glick 16:37

Um now when you go out showing listings, how many are you showing somebody? Like if someone says, hey, I'm looking for three to five million dollars, you're making it.

SPEAKER_03 16:48

Now I'm showing, let's say, between six and eight properties.

Steve Glick 16:51

Where is that a good amount? Is that is that's good? Okay.

SPEAKER_03 16:54

And last year I would have to say that it would be about two.

Steve Glick 16:58

Now go five years ago. How many?

SPEAKER_03 17:01

I could take people out to show ten listings and then another ten the next weekend and another ten the next weekend.

Steve Glick 17:09

So you're happy. This is manageable, you're you love where the inventory is because now it's like it's not too low, it's not too high where you're running around like crazy, you're in the zone, you're in your lane, you have a good amount, a good eight to ten listings. Exactly. And that's perfect.

SPEAKER_03 17:24

Yeah, great.

Andrew Doud 17:26

How often do you get people to say, like, I want to be in the Hamptons, but I don't know where? And you have to like coach them up on the Hamlet.

SPEAKER_03 17:31

It's actually more frequent than you can imagine. And so basically, that's part of my job is to educate on all the different areas and not only each town. Let's say East Hampton, for example, is to educate on East Hampton Village, East Hampton south of the highway, Springs, what's going on in Northwest Woods. You know, it's the same with all of the towns. Have that you have to educate each buyer, yeah, and they have to decide what is important to them.

Steve Glick 17:59

You're a tour guide. Tour guide out of the Hamptons. Yeah.

SPEAKER_03 18:03

One of the many jobs is of a real yeah, exactly.

Andrew Doud 18:06

Um, Dave, what do you got going on? It's your time to shine.

Dave Rattiner 18:11

This weekend, there's a lot going on. Is there kids? The place to go this weekend is the 14th annual family fair at CME. Saunders and Associates sponsors this. It's July 20th, starts at 9:30 a.m., runs all the way into the afternoon. There's food trucks, there's games, there's water rides, there's little ponies. Creep in?

Andrew Doud 18:34

Oh, yeah.

Dave Rattiner 18:34

Oh yeah, yeah, yeah. It's great. You will see me there. You will see me there too. Oh my god, I've never made that connection. My I've everything is now clear. All right. Is that why they called it that? No. No, but that's good. That is good. It is all right. That's pretty good. So that's Saturday, right? 9 30. Why have you been holding that joke in? How you've never made that joke. Go on this guy for 10 years, he's never made this joke. All right, so then you got Fridays at 5, uh, July 19th, another Saunders and Associates sponsored event. This is at the Hampton Library in Bridgehampton. And believe it or not, it happens at 5 o'clock. That's why they call it Fridays at 5.

Andrew Doud 19:17

Nice.

Dave Rattiner 19:17

I just figured that out just now as well.

Andrew Doud 19:19

No, you didn't.

Dave Rattiner 19:20

Come on. Just shook. All right. So the author for that is Jonathan Rosen. He's a great guy. Love that Jonathan Rosen. He's a great guy. Uh tickets are $25 per lecture. Um, you know, or you can packed. That place is packed. Yeah.

Steve Glick 19:37

This standing room, you know, there's seat, every seat is filled. Yeah.

Dave Rattiner 19:40

Watching these uh really entertaining. It's really cool. Now, if you're looking for some beer entertainment and you want to have some craft beer entertainment. Yes, please. Okay, so Thursday from 4 to 6 p.m. at the Kids Squid Brewing Company in Sag Harbor, which is just it's just such a great place. It's easy going. It's like happy. It's just it's like we see it's there? They're selling happiness there. They sell beer and happiness. You'll see me out there. It's not like, you know, depressed beer drinkers, it's very happy beer beer people. In the beginning. Yeah, in the beginning, yeah. And you know, there's it's just a really uh fun place. Um they are going to have a variety, a craft beer event where you can have a variety of different tastings of beers, and then you can pick the one you like and enjoy that. So uh that'll be cool. Uber geek will be there. I don't know what that is, but I think that's a beer, uh, another beer company in Riverhead that I guess I have to try. So that should be good. Then you got the Southampton Animal Shelter Unconditional Love Gala. Uh, that's Saturday, July 20th at 6 p.m. That's at Wikipog Road in Southampton. Um, the sh the Southampton Animal Shelter Unconditional Love Gala is one of those go-to events if uh you want to support a good charity and have a good time at the same time. Um love a good gala. Yeah, they've been doing that forever, and they do a really good job, the Southampton Animal Shelter. I mean, I know so many people that have dogs and cats and uh gerbils and things like that that they've adopted from the Southampton Animal Shelter. I don't need to give I don't need to give gerbils out, but all right. So then you got the Rum Punch Mafia at Navy Beach restaurant. It's July 20th from 5 p.m. to 7 p.m.

SPEAKER_03 21:31

Um you can take your boat there.

Dave Rattiner 21:33

You can take your boat there. It's really fun. You can also take your boat to Duries and Montauk, Duryes and Orient. What are some other boat spots? Salt and Shelter Island. I know it well, Steve. Bald in Shelter Island. Um, so that's what's going on this weekend in the Hibans. All right. There you go. I know. It's pretty good, right? It is good. Have you been out on the boat?

SPEAKER_03 21:52

Yes, we go out all the time on the boat, even at the end of the workday. Just take off.

Andrew Doud 21:56

That's the best time. Best time sun's down, and yeah. I gotta get a motor. Boatmen.

SPEAKER_03 22:00

And you head over. We went to the Pridwin on Shelter Island for dinner. It was so nice. And they have mooring balls now, so you can just pull up and a little a little boat comes and gets you and bring it ashore.

Dave Rattiner 22:11

It's a whole other addition to your lifestyle if you're a Hamptons person. Once you get a boat and you figure it out. Exactly. I think there's a learning curve to owning a boat, but once you figure it out, it's like, what are we doing tonight? We're going on the boat. It's like a great option.

Andrew Doud 22:26

Just go on the boat.

Dave Rattiner 22:27

Yeah. Sounds like you should get a boat.

Andrew Doud 22:29

I should get a boat.

Dave Rattiner 22:30

I do. I want an easy one that I can trailer. I don't want to deal with like the marina and stuff. I just want like an easy whaler that I can just trailer out and be like, guys, you want to go out on the boat ride for a boat ride? And the girls are like, Yeah. You know, I'm done with like big boat problems. Anyway.

Andrew Doud 22:47

All right.

Dave Rattiner 22:48

I need coffee.

Andrew Doud 22:50

All right. We'll let Jen get to work, Dave, to get his coffee. That's great. Jen, we'll have you on again soon. Thank you so much for joining us. Um everybody get out on a boat if you have one this weekend, I guess. Until then, I'm Andrew Dowd. That's what's happening in the Hamptons.