- Posted May 18, 2014 by
The Hamptons, New York
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Property Expert Lawrence Citarelli Jr., Says Premium Real Estate is Now the US Market Value Play
Lawrence Citarelli Jr., Principal of the LIII Group , an umbrella team of real estate companies based in New York, spent 14 years on Wall Street as a Specialist, Technical Analyst and Trader, at big 90’s firms like Spear Leeds & Kellogg, S.G. Warburg and Lehman before founding a partner-asset-only fund trading group, Westhampton Partners in the mid-1990's.
According to Citarelli, “US Rates are low, Libor hasn't "up ticked" in years, property prices are still very attractive and of value, fixed income and banks offer relatively no yield, and while there is much regained wealth from the stock markets, and commodities available, those markets are frothy and one could possibly be at risk if they remain there. Prudence suggests an asset allocation seeking a flight to quality. Now is the time for smart investors to pounce on the next ascending economic real estate cycle and uprising market of luxury housing which is outpacing expectations everywhere, with the Hamptons Real Estate being a case in point. Luxury real estate investment is the value play.”
Citarelli is an expert in the Hamptons sector, which is a proven national luxury market indicator, and he counsels that all the key market measurable variables are upward trending. “Average Sales prices hit their nadir in late 08/2009 and as we all know the recovery has taken it’s time since then, with 2011 even showing a down tick in total unit sales. However, when you look at 2011 thru 2013 the real news is in the growth in total unit sales with over a 30% growth rate in that period. The Q1 2014 numbers are through the roof, with total market sales of $453 million over $269 million the previous year according to figures released by Suffolk County NY Clerk’s office not to mention a private sale of 147 Million which is the highest in the history of the country.”
A recent article by AP Business Writer Joshua Freed agreed: “higher-end homes are hotter investments. It's better to be on the luxury side of the real estate market for the moment. Prices generally rise faster than at the lower end. And buying activity has increased in the past year and sales of homes worth more than $1 million rose 14.4 percent over the past 12 months, according to Bank of America Merrill Lynch”
A recent series of bullish market forecasts by First Hampton International Realty that analyzes trends and dynamics in Hampton sales (and over 100 other markets) from a complete database of transfers showed Q1-2014 results indicate a continuation of the growth trend with First Quarter numbers being historically lower than the remaining three quarters(Q2, Q3, Q4). The report says a near-million dollars is considered entry level in the Hampton footprint, but in the high end tier ($3 Million Plus), typical sales average $6.6 Million. The short term indicates declining inventory, which bodes well for sellers in the market.
Traditionally, for buyers initiating the purchase of a luxury property or a second home, the process can be circuitous. They need a multitude of diverse professionals lined up as they move from the start to completion. Citarelli advises, “As real estate heats up, so will competition for good properties. Smart investors will have their whole team lined up and ready to move before the offer is made.”
The economic outlook is more certain now, with many signs that the worst is behind us. It’s difficult to imagine the economy getting worse and as a result luxury real estate prices seem destined to continue moving upwards and may well present good buying at current prices.