Real Estate News

REAL ESTATE NEWS: CPF Indicates ‘Hot Market’

Budget Officer Len Bernard has helmed the finance office for East Hampton Town through four of the last five administrations. He was the main moneyman in 2000 when the Community Preservation Fund began amassing revenues.

The Peconic Bay Community Preservation Fund was adopted through referendum in 1999 with overwhelming support of voters in the five East End towns. The local real estate industry was a key supporter of the CPF, which garners revenue through a two-percent tax on most real estate transfers. Its goal was to preserve open space, farmland, and historic sites. Industry experts knew maintaining the bucolic setting was key to keeping the Twin Forks a place where people wanted to buy homes, live, and even just visit.

Assemblyman Fred Thiele authored the CPF legislation. He recalled state and national arms of the real estate industry traditionally reject the notion of any taxes on real estate, but the locals knew keeping the East End’s country character would be beneficial to home values.

Since its inception, the CPF has generated more than $1 billion, creating a healthy open space fund, despite market vicissitudes. This year so far, CPF collections for January and February, up 12.4 percent over last year, indicate the market is healthy, Bernard affirmed. Mortgage tax, another indicator, has been strong as well, Bernard informed. “We were above budget in mortgage tax in 2017 by $800,000,” he said. Both factors suggest “the market is pretty hot,” he added.

Watching the CPF numbers over the last 18 years, Bernard has seen both lean and boom years. One year, he recalled, the town collected $30 million. “This is right there,” he said, referring to the potential of a healthy and hot market in 2018. “We’re going to do well over $20 million this year. That’s solid.”

In all, real estate transfers generated $16.86 million in revenue for the first two months of 2018, compared to $14.77 million last year.

East Hampton’s numbers are up 21.9 percent, with $4.85 million collected during January and February of this year cast against $3.98 million for the same timeframe last year.

Shelter Island saw the largest increase, at 52.6 percent during the first two months of 2018 ($0.29m) compared to last year ($0.19m). Numbers are up in Southampton Town, too. Up by 12.5 percent, at $10.06 million in ’18 compared to $8.94 million in 2017.

In Southold Town, revenues for the first two months are up 11.5 percent. Officials collected $1.26m this year, $1.13 million last year.

Riverhead Town is the sole municipality in the program that saw a decrease in its CPF coffers. Revenues for this year ($0.40m) are down 25.9 percent over last year ($0.54 m). “I wouldn’t read a lot into that,” Thiele said. In general, he said, revenues from the North Fork haven’t been as high as those on the South Fork, where market values are higher. The market in Riverhead is more like points west than the South Fork.