Press Coverage - Klar Realty

Instead of lowering their asking prices any further, homeowners are looking for creative ways to attract buyers

BYLINE: BY ELLEN YAN. STAFF WRITER
SECTION: REAL ESTATE; Pg. C12
October 20, 2006 Friday - Correction Appended - ALL EDITIONS

Winter is coming, and Long Island builder Steven Klar feels the chill from the buying market.

He doesn't relish safeguarding unsold homes over the winter, paying for snow removal and heating the big, empty insides so the pipes don't freeze and burst.

That's why he's offering a new $52,000 Mercedes to buyers of his model homes in his Huntington, Manorville and Locust Valley developments.

"Does that sound desperate? No, it's making the sale," says Klar, whose models run $697,000 to almost $1.5 million. "It's definitely generated a lot more traffic and interest than ... if we just said ... 'Take $50,000 off the price.'"

Sellers are gussying up homes with freebies to make their properties stand out, a national phenomenon as the market softens. Like companies enticing new customers with giveaways, Long Island sellers have proffered everything from free vacations to making mortgage payments.

Sellers and agents hope these deals will keep home prices, agents' commissions and neighborhood property values up, though some homeowners have become willing to reduce prices.

Sellers' concessions were not unknown before boom years - help on closing costs, the down payment, paying points to lower loan rates - but the perks nowadays are breaking out of the box.

Even open house parties must stand out. In May, one agent threw a party at one of his listings in Oyster Bay Cove, complete with DJ, champagne and models in the pool, though he still has no contract [CORRECTION: An Oct. 20 story in the Real Estate section about an Oyster Bay Cove home where an open house in May included a DJ, models and champagne misstated its sales status. At the time it was actually under contract and last week it was sold. PG. A13 ALL 11/4/06].

Samira Johnson, 48, a biotech consultant, decided to forgo Paris and give a seven-day stay at any luxury Marriott worldwide with the sale of her three-bedroom Northport ranch. She will hand over her 115,000 reward points - having spent $20,000 over two years to earn them - after hearing a California seller offer a year's free beer and pizza.

"Every time I have moved, within six months I take a vacation - I need it," Johnson says. "I thought if I did, other people might need it, too." She'll do another open house this weekend after a lackluster response to her vacation offer.

Giving up Paris didn't take money out of Johnson's pocket, which price reductions will: Since putting the house on the market with a real estate agent in May, she has lowered her asking price from $549,000 to $509,000. She began offering the vacation about two months ago.

Some sellers are looking for ideas that won't cost them. Reluctant to cut prices further, they're resorting to pain-free appeals, including arranging lower-than-current rates with mortgage brokers for the buyers, an unusual private deal.

In April, before Susan, 52, and Dennis Madden, 55, retired from Northport to Tampa, Fla., they advertised their Cape and 20-foot boat as a package deal on Craig's List and elsewhere. "I didn't really get any response," says Susan Madden, a former real estate office assistant.

In the end, the boat sold in June. The house? That went to a separate buyer last week. They had been asking for $699,000; they sold for $675,000.

John Giamarino said he will pay a year's mortgage for the buyer of his $645,000 home in West Gilgo Beach, better than waiting another seven months. "I think if you move into a house and you're not struggling with payments for 12 months, it's just another idea to help," he says.

As of August, there were 13,999 homes for sale in Suffolk, up 59.3 percent from 8,790 the same time in 2005, says to Mohsen Zandieh, vice president of the Multiple Listing Service of Long Island and treasurer of the Long Island Board of Realtors. In Nassau, the number was 10,041 in August, 66.8 percent higher than 6,018 last year; and Queens' was 10,005, up 76.2 percent from 5,677 a year ago.

Zandieh, who owns Arash Real Estate in Little Neck, says he hasn't seen a lot of incentives but says the market is "correcting itself" after years of rising prices and sales numbers.

For the most part, the median sale price of homes is still higher than last year, he says, and the slower activity stems partly from sellers hoping for boom-time prices and buyers waiting for more price-slumping.

"Sellers are living in last year's market," Zandieh says. "Buyers are living in the future."

Since June, broker Barbara Tomko has been trying to sell a four-bedroom, Colonial-style home in Long Beach. She and the owner thought of the $749,000 Pine Street house like a child - Where did they go wrong? - before deciding to pay the buyer's first year of property taxes (more than $13,000).

Tomko, with Daniel Gale Sotheby's International Realty in Syosset, says she looks at the incentive as a way of "opening up the lines of communication. ... Get them in to see the house and say, 'Oh this is worth more than I thought it might be worth. I don't need to do the roof,'" In fact, the sellers received an offer from someone intrigued by the property tax incentive.

Incentives may not seal the deal, but they're like the opening lines in a real estate version of dating - reasons to meet the house and talk.

Feeling like the perpetual bridesmaids, Larry and Samantha Brittan decided to shell out $10,000 for closing or property taxes after potential buyers kept on picking "the other house."

Already in their new home, the couple pay a mortgage on two houses and see a little relief in the doubling of open house visitors since offering the incentive. "It could just be a matter of somebody sitting there and thinking, 'Do I have enough to cover the closing costs?'" says Larry Brittan, set for another viewing of his Johnston Avenue Colonial in Northport this weekend. Brittan, working with a real estate agent, is asking $559,000 - down from $639,000.

Klar Realty, based in East Meadow, has buyers now for the Huntington and Manorville properties since Klar began offering the cars in August, but both want an equivalent price drop instead of the Mercedes. That's fine with him, he says.

He's even mulling giving the car to whoever takes the home of his potential buyer.

Every Thursday, homes for sale have an agents-only open house, with breakfast at one spot, snacks at another and lunch at a different house.

When it was Ginger Scarpino's turn at her $1.1 million Dix Hills ranch last month, she spent hundreds of dollars and cooked until 2:30 a.m. to create a patio-side gourmet luncheon - caviar, lemon fennel shrimp with tarragon and more. She's also proposed giving a $5,000 bonus to her agents, who declined it, and $11,000 for a buyer's closing costs - all to get that extra edge.

"Maybe it'll work, rather than coming down another $100,000," says Scarpino, 67, who already had reduced the house $400,000. "These days, these agents expect you to come down in big numbers."

The party "definitely showed how you can entertain and how the house flowed," says Prudential agent Debra Friedman, who adds she may have an interested client - the only prospect for Scarpino since last month's fete.

Shawn Elliott's Luxury Homes & Estates last month spent $8,000-plus on an open house for a Gold Coast client who's willing to buy a Mercedes for the agent who bags a buyer.

"He feels motivating the brokers is better than giving the house away," says Elliott, whose Woodbury agency is planning an invitation-only, millionaires' singles open house to show off its new Woodbury town homes. "The larger and more the lavish the event, the more RSVPs."

Some agents frown upon bonuses on top of commissions. They worry buyers might wonder if they're shown good houses or if the agents just want that bonus. (Buyers can find out about such bonuses if they get a copy of the Multiple Listing. Incentives are often at the bottom. Sometimes, the seller will announce a bonus, too, or may have a flyer.)

"I think it diminishes our profession, somehow cheapens it," says Kathryn Martin, a Century 21 agent in Northport.

This month, she began meeting with clients to suggest offering incentives and viewing their homes as "a product on the shelf" by going to competitors' open houses and comparing.

But most of all, agents consider the bottom-line price to be the best draw. "What's the pressure point when the buyers are going to buy?" Martin says. "When you've hit the pressure point, you're going to see it pop."

Calculate the options. At a gourmet lunch at her Dix Hills ranch, the seller announced she would give $11,000 for a buyer's closing costs. Experts say buyers should figure out which options will give them the best deal. On closing costs, the amount may be different depending on whether property taxes have already been paid by closing.

Know the details. With the sale of their West Gilgo Beach home, the Giamarinos are offering to pay the first year's mortgage. Experts say buyers should find out if there's a cap on such a deal and understand payment schedules and options.

Figure out the tax impact. Samira Johnson is offering a free week at any Marriott hotel worldwide with the sale of her Northport ranch. Buyers may have to pay taxes on such gifts, while sellers may get gift or business tax breaks.

Real estate agent Kathryn Martin remembers the days of double-digit mortgage interest rates, when sellers were offering all sorts of contorted incentives to get buyers.

One was the wraparound mortgage, in which the new homeowner took over the seller's existing mortgage. But there were pitfalls.

If the buyer later defaulted, "the seller was potentially liable for the mortgage," says Martin, a Century 21 agent in Northport.

In offering and taking incentives, read the fine print, consult experts and watch out for pitfalls. For example, a seller willing to pay closing costs may be tacking that expense on to the house price, which means the buyer may have to get a bigger loan and pay more interest.

Gifts, such as vacations, may be subject to taxes. "Any of those incentives are like income," says Frederick Mars, a real estate attorney in Hauppauge.

Try comparing out-of- the-box offers to help pay mortgage and other costs with traditional lending programs. "It's like going to the doctor - you have to get a second opinion," says Richard Chertock, a Merrick real estate attorney.

With single-family house prices on the rise, more home buyers find co-ops and condos are worthy options

BYLINE: By Laura Koss-Feder. Laura Koss-Feder is a frequent contributor to Newsday. She may be reached via e-mail at kosfeder@optonline.net
SECTION: REAL ESTATE, Pg. C06
January 31, 2003 Friday ALL EDITIONS

Steven Klar of East Meadow have all seen increased demand for condos and co-ops. (Newsday Photo/Thomas A. Ferrara)

This is the first of two articles focusing on the co-operative and condominium market on Long Island and in Queens.

Gary and Elizabeth Yuen were determined to buy a home in an area that had good schools for their daughter, Emily, 4, who will be starting kindergarten next year.

The Yuens were living in a one-bedroom apartment in Elmhurst, renting for $895 a month. Gary Yuen, 45, a chemist with the U.S. Department of Agriculture, and Elizabeth, 39, a supervisor with a doctor's office, had spent three years looking at both single-family houses and condominiums.

Finally last March, they put a binder down on a town-house condominium in East Setauket. It was still in the preconstruction phase, but they didn't want to take a chance - the market was competitive.

To get the school district they wanted at a price they felt comfortable with, the Yuens ended up purchasing a $326,000 two-bedroom, 2 1/2-bath town house with den and fireplace at the 44-home Willow Wood development. They moved into their new home in November.

"It's always better to own your own home than to rent, and buying a condo offered us lower property taxes than a single-family house would have," said Gary Yuen, who works in Jamaica. "Also, there was no maintenance on the home, since you don't have to shovel snow or do gardening."

For the Yuens and thousands of other families on Long Island and in Queens, the high prices of single-family homes have made condominiums and co-operative housing an attractive alternative.

There were 2,276 condos and co-ops sold in both Nassau and Suffolk counties in 2002, compared to 1,185 in 2001 - a 92 percent increase, according to the Multiple Listing Service of Long Island. In Queens, 1,573 co-ops and condos were sold in 2002 - a stunning 137 percent rise from the 665 apartments sold a year earlier.

"The co-op and condo market will pretty much track the sales of single-family houses, which will all stay pretty consistent - especially with today's low interest rates," said Joseph Mottola, chief executive of the Long Island Board of Realtors Inc.

While many newly constructed condos and co-op developments can command healthy prices - from $300,000 to $400,000-plus - they are still often less than single-family houses in the same communities.

Prices for existing condos and co-ops, too, are substantially less than for existing single-family housing in the region.

In Nassau County, the median sales price for co-ops and condos last year was $195,000, compared to $350,000 for single-family houses, according to MLS figures. In Suffolk, median co-op/condo prices were $180,000 last year, compared to $282,750 for single-family houses. And in Queens, the median co-op/condo price was $117,500 last year, compared to $294,500 for single-family residences.

At the same time, price appreciation for co-ops and condos have closely tracked single-family homes. In Nassau, median co-op/condo prices last year increased 21.1 percent over 2001 (12.9 percent for single-family houses); 21.2 percent in Suffolk (21.8 percent for single-family houses); and 17.5 percent in Queens (20.2 percent for single- family houses).

Buyers and real estate experts also note that while "handyman special" houses can easily start in the $300,000s, condo complexes tend to be newer construction and require minimal, if any, renovations.

"Other than painting, there are no renovations that I need for my co-op," said Anthony Piro Jr., 38, an information services manager who moved from a one-bedroom rental in Midwood to a $100,000 co-op in West Babylon in December. "I looked at single-family houses priced from $200,000 to $290,000 that were real fixer-uppers. I would have preferred a small house, but the prices were too high."

Piro was in the market for six months before finding his co-op. Along the way, he discovered that some condo town-house complexes, with an array of amenities, could be as expensive as single-family houses.

"I just kept looking," Piro said. "I was determined to own something."

Co-ops and condos also are in great demand because of their limited supply, especially on Long Island. Zoning restrictions have made it difficult to build high-rise buildings in many areas, resulting in a dearth of supply, noted Robert Campbell, professor of real estate and finance at Hofstra University.

At the same time, there is increasing demand, he said, from empty-nesters who want to move into smaller homes and the "echo boom" generation in their 20s and early 30s - the children of the baby boomers.

"The empty-nesters don't want their houses anymore," Campbell said, "and the young folks without kids don't yet need the space of a house and don't have that much saved up yet to be able to afford one."

Earlier this month, The Beechwood Organization, a Jericho-based developer, found that it had a waiting list of 800 families for a condo development of 137 townhouses in Kings Park - and it hadn't even begun to market it, said Beechwood partner Michael Dubb.

"The market is as strong as ever for condos," Dubb said. Although sales prices for condos have gone up by 20 percent in the past year, that doesn't seem to have deterred demand, he added.

Real estate agents also say that while low interest rates have helped boost the entire housing sector, continuing worries about the stagnant economy have helped co-op and condo sales in particular.

"Some of those who have jobs may be working harder than ever - doing the work of several people because of those who were laid off - and they don't want the burden and extra work that goes along with maintaining a single-family house," said Frank DellAccio, president of Century 21 AA Realty in Lindenhurst.

In DellAccio's area, condo sales were up by 15 percent last year and co-ops sold about 10 percent more than 2001. One- and two-bedroom co-ops sold between $80,000 and $120,000, he said. Two-bedroom, two-bath condos had price tags between $240,000 and $320,000. Three-bedroom, two-bath condos started at $350,000.

Condo town-home communities, which feature amenities like pools and tennis courts, were in the $400,000 range and higher.

"Young couples like the social aspect of a planned condo community, and they'll forgo the big back yard of a single-family house that requires so much time and effort to maintain," said Hal Knopf, president of Hal Knopf Realty in Oceanside.

Sales are so strong now that one-bedroom co-ops which went for $30,000 just three years ago are now being grabbed up at nearly $150,000, noted Marie Costello, president of Marie Costello Real Estate in Glen Head.

"Instead of renting, people are figuring that if they have to pay $2,000 a month, they're better off buying a co-op," Costello said.

Wanting to get more for his money and the desire to have a tax write-off were important factors in Dennis Shawah's decision to buy a Belle Harbor co-op.

"We had no choice; we were just paying too much in taxes," said Shawah, 53, a senior court officer in Manhattan who got married last year and plans to move from a Bay Ridge rental into his new home next month.

The newlyweds bought the two-bedroom, two-bath oceanfront co-op after seeing the apartment at an open house. Shawah said the market was competitive and the two wound up paying $30,000 more than they had originally planned. The couple had seen three other apartments, but felt they were too overpriced, given their overall condition.

Sales in the Rockaways, where the Shawahs bought their co-op, doubled in 2002 from 2001, said Annie Graves, president of Annie Graves Realty in Belle Harbor. Oceanfront two-bedroom co-ops have been selling from the mid-$200,000s to nearly $300,000. These apartments have monthly maintenance fees of about $1,000, with an additional monthly parking charge of $100. But this is still less pricey than the single-family homes in the close-knit community, which have been selling for up to $1 million, Graves said.

"People from Manhattan and Brooklyn want to be in this area on the water, and a co-op is a more affordable way to make that move," Graves said. "They're grabbing whatever such units are available."

In other parts of Queens, less expensive co-ops have sold well and continue bringing in buyers, said Walter Messina, owner-broker of Glenjay Realty in Forest Hills.

Co-ops selling between $90,000 and $110,000 have been particularly popular, while those in the $400,000 to $800,000 range have seen somewhat of a slowdown in the past two months, Messina added. Buyers in Queens also were looking for renovated apartments, and parking spaces.

"You have to put 20 percent down and some people may not have that kind of money these days for the more expensive co-ops on the market," Messina said.

But whatever the price tag - moderate or steep - the co-op and condo market seems poised to remain strong for the near term, experts say.

Says Steven Klar, president of The Klar Organization in East Meadow, which developed Willow Wood in East Setauket, "There is no reason to believe that it won't stay this way."

Laura Koss-Feder is a frequent contributor to Newsday. She may be reached via e-mail at kosfeder@optonline.net

NEXT WEEK: Handling conflicts at your co-op or condo

Prices on the Rise

Here is a coparison of median sale prices of existing co-ops and condominiums versus single-family houses.

2001 2002 Percent Increas

Queens

Co-ops/condos $100,000 $117,500 17.5

Houses $245,000 $294,500 20.2

Nassau

Co-ops/condos $174,000 $195,000 12.1

Houses $310,000 $335,000 12.9

Suffolk

Co-ops/condos $148,500 $180,000 21.2

Houses $232,000 $282,750 21.8

Good Gates, Good Neighbors?

Although criticized as being exclusive, gated developments also are praised for fostering communal bonds

BYLINE: By Cara S. Trager. Cara S. Trager is a freelance writer. She may be reached at CaraTrager@aol.com.
SECTION: REAL ESTATE, Pg. C08
September 20, 2002 Friday ALL EDITIONS

Gary and Eileen Smith were ready for a change.

The couple had had enough of taking care of their large Stony Brook home - everything from making sure the snow was shoveled to calling a service crew each year for the pool and Jacuzzi. Plus, with a vacation home in Florida, they wanted to come and go as they pleased, without worrying about the upkeep or security of their Long Island house.

So two years ago, they purchased a three-bedroom, 2 1/2-bath condominium in a gated community called Country Pointe at Smithtown, along Middle Country Road.

"We have all the good stuff - peace, privacy, security, a pool and a clubhouse," said Gary Smith, 54, an attorney. "And none of the headaches of home ownership."

Like the Smiths, a growing number of local homebuyers are embracing the aura, amenities and security that gated communities offer. They appeal to the strong market of upscale residents on Long Island and in Queens who want an active country club environment or Boca Raton retirement lifestyle, depending on their stage of family life. Prices range from $150,000 for a modest three-bedroom, 2 1/2-bath condominium to more than $1 million for a luxurious single-family house.

With their gatehouse guards or electronic security devices, tennis courts, swimming pools, clubhouse facilities and, in some instances, golf courses, these enclaves have helped redefine housing developments as "lifestyle communities."

"The gate is the icing on the cake," said Susan Barbash, a partner in McGovern-Barbash Associates, the developer of The Villages at Huntington and the adjacent Villages West, between Old Country and Pinelawn roads, which breaks ground this fall.

While there are no hard statistics, the region has sprouted dozens of gated communities in the past 25 years, with a proliferation of new ones in recent years - and plenty more in the works.

"More gated communities are coming onstream than not-gated communities," said Charles Mancini, managing director of the Long Island division of Spectrum Skanska, a Westchester-based firm. "Developers are reacting to what the market wants, and the marketplace favors gated communities."

But such developments are not without their critics, who point to the gate, itself, as a symbol of elitism and exclusivity.

"They're antithetical to community and create a fortress, members-only mentality that basically says to the rest of the world: 'Keep out,'" said Ronald Stein, president of Vision Long Island, a nonprofit group that advocates "smart-growth" practices as well as community training and involvement.

Shellie Williams, development director at Sustainable Long Island, another smart-growth advocacy organization, said a gated community does a disservice to its residents.

"They are isolated from the community that they live in," Williams said.

On the other hand, Stein added, there are elements in the gated developments, such as community centers, public spaces and "narrower, more pedestrian- friendly" streets that do foster a sense of community.

Whatever their attraction, gated communities - in the approval process, under construction or recently completed - have grown in number each year. A sampling: The Beechwood Organization's Country Pointe at Dix Hills, Country Pointe at Smithtown North and Country Pointe at Miller Place; Klein & Eversoll's Timber Ridge at Leisure Glen in Ridge and Timber Ridge at the Village of Mount Sinai; Island Estates' Sweet Hollow Farms in Melville and Villas on Manhasset Bay; Spectrum Skanska's The Legends at Half Hollow in Dix Hills; The Holiday Organization's The Hamlet Willow Creek in Mount Sinai, Hamlet Woods at St. James, Hamlet Estates at Kirby Hill in Muttontown and Hamlet at Olde Oyster Bay; and The Klar Organization's Willow Wood at East Setauket and The Waterways at Moriches.

In addition, there are several gated rental enclaves, including Avalon Bay in Melville, and more planned, such as Birchwood Park Homes' The Muse at Spring Lake in Middle Island.

In many instances, gated communities are fashioned as condominiums or homeowners associations. Residents generally pay monthly common charges that cover everything from the maintenance of the grounds to the guard service at the gatehouse. Depending on the size of the development, range of services and whether the enclave offers country-club activities, common fees are $100 to $600 a month.

For many homeowners, though, the initial lure of a gated community is exactly that - the gate and guard that give the enclave its sense of security. In particular, retirees and empty-nesters say they are drawn to the developments' lifestyle, which enables them to take vacations without worrying about the safety of their home or its maintenance.

With their children grown, Irene Moore, a college program director, and her retired husband, Walter, sold the house they had owned for 30 years in Huntington and moved last year to Highview at Huntington, a gated condominium community. With an eye toward her own retirement, Moore wanted a home that required less maintenance while giving them more freedom to travel.

"When you have a house, you need a baby-sitter for it," she said. "But, with the security, I can lock my door and just go."

Folks with young children also are attracted to the security that gated communities offer. "You don't have to worry too much about traffic," said Brian Sundberg, 35, a teacher who moved two years ago with his wife, Alicia, and two young children to The Villages of Huntington. "And for trick-or-treating, it's nice knowing you're in a private community and that you know your neighbors."

RJ Singh, 36, has been living since June in a two-family townhouse he purchased in Country Pointe at Alley Pond in Queens Village. Singh said he was drawn to the enclave's sense of privacy as well as his home's potential as an investment property.

"Tenants like the fact that they are in their own private sanctuary - with no street element to be bothered with," said Singh, who sells business security software.

While their appeal bridges many age groups, many gated communities are restricted to 55- and- over couples. According to developers, the age restriction is usually the result of pressure from municipalities that welcome the new residents' tax revenues but don't want more children in their school system.

"Builders are stuck building senior housing because that's what gets approved," said Lennard Axinn, a partner in Island Estates.

Yet age-restricted communities can wind up being a Catch-22 for school districts, other developers say. Residents 55 and older may represent additional tax revenues for the municipalities but, without a vested interest in the local schools, they may have "less interest in the quality of the school district," Mancini said. "The logical step forward is that there's a tendency for them to vote down budgets."

Still, with baby boomers graying, the region's gated communities may provide anchors to keep them from relocating to retirement communities in other parts of the country, said Lee Koppelman, executive director of the Long Island Regional Planning Board.

"For those people who still have family on Long Island and want to stay on Long Island, instead of going to California, Florida or Scottsdale [Ariz.], they can go into one of these communities and have everything done for them," Koppelman said.

Although detractors criticize the age-restricted community for its homogeneity, Gloria Littell, 66, and her husband, Bill, 69, don't have a problem with it. Since moving three years ago to The Waterways at Moriches, an age-restricted condominium development, Littell said she hasn't missed living in a mixed-age community.

Gloria Littell says she gets her kid-fix from her own grandchildren, and "a lot of homeowners have their grandchildren coming for visits."

At the same time, living in the age-restricted community has enriched the couple's retirement years, she said, providing them with an active social life as well as a new pastime, boating.

"With most of us retired, we have the time to socialize and talk," said Littell, a former secretary.

Real estate agents say gated communities have still another thing going for them: resale values. Marilyn Larsen, president of Jericho-based Lane Realty, which handles initial sales and resales of homes in gated communities, said a house in a gated enclave can fetch $50,000 to $100,000 more than a comparable property elsewhere.

"It's a lifestyle people are buying," said Larsen.

Five years ago, Marc Ellis, now 36, and his wife, Alisa, 35, paid $229,000 for a three-bedroom, 2 1/2- bath townhouse in Country Pointe at Melville. In August, they sold their Melville house for $470,000. They are planning to move in December into a new $1-million, 5-bedroom, 3 1/2-bath home in another gated community, Country Pointe at Dix Hills.

"We were able to upgrade to a house because of the appreciation of the townhouse," said Marc Ellis, who works on Wall Street.

And Country Pointe at Dix Hills will provide the Ellises and their two young children with a luxurious lifestyle, as well as a bigger home, they say. Through a special arrangement with The Greens, another gated community under construction nearby, Country Pointe at Dix Hills residents will be able to use the facilities in The Greens' expansive club house. "That was an attraction," Ellis said. "It means I don't need to join a country club or put in a swimming pool."

Nevertheless, gated communities do have drawbacks, their residents say.

After five years of owning a home in Farmingdale and being able to modify it to his liking, Sundberg said he had to "adjust to living by the rules" of The Villages of Huntington's homeowners association. When he wanted to level a hill in his backyard that borders a neighboring farm, Sundberg had to get the association's permission. More recently, he has had to file paperwork with the association to install a backyard fence.

He has learned to adapt, though.

"In a way, even though it is a hassle, I understand that these are necessary rules to maintain the appearance of the community," said Sundberg, who is the homeowners association president.

Among other detractions, homes in gated communities often sit on smaller parcels of land than those built outside the gate. Developers say this is because land prices are so high that they must blanket it with as many housing units as possible to make the project financially viable. To offset the limited elbow room between neighbors, gated communities generally include common areas, such as parks, walking trails and playgrounds.

"Lots are fairly small - one-third of an acre - at The Villages of Huntington, but there's a lot of open space so you don't get a sense that it's a dense project," developer Barbash said.

Others question the security these communities provide, which may be only as effective as the person guarding the gate. What's more, the guard at the main entrance sometimes becomes too costly to support, and communities wind up replacing their human sentries with electronic devices. On average, paying for a 24-hour human sentry can run about $110,000 to $120,000 a year, industry experts say.

But the gate itself, while subject to criticism and maintenance costs, shows no signs of losing its appeal, said Steven Klar, president of The Klar Organization in East Meadow.

"In light of Sept. 11's security issues," he said, "people are going to rely more and more on gates."

COVER STORY: PAYING CASH

BYLINE: By Lew Sickelman and Joe Catalano; Lew Sickelman and Joe Catalano are freelance writers
SECTION: REAL ESTATE, Pg. C06
June 1, 2001 Friday ALL EDITIONS

LAST SEPTEMBER, Edward and Margaret Zingone sold their home of 43 years in Wantagh and bought a condo at The Waterways at Moriches, a community for those 55 and over.

Edward Zingone said he thought about investing the proceeds from his previous residence and financing the $189,000 condo, but he decided to pay cash instead.

"I didn't want a mortgage payment every month at the age of 87," he said.

While interest rates are low and most home buyers are stretching their incomes to qualify for a mortgage, a healthy minority are still paying cash for their new residences these days.

About 12 percent of the 5 million-plus buyers of existing homes in 1999 paid for their new digs in cash, including an impressive 7 percent of all first-timers, according to the National Association of Realtors, a Washington-based trade group. And a far greater percentage of new-home buyers-nearly one out of every four-did the same, according to the Census Bureau.

Who are these all-cash big-ticket buyers?

Experts say many of them are senior citizens, like the Zingones, as well as immigrants accustomed to cash transactions and wealthy second-home buyers who don't want to disclose their assets to lenders.

Although there are no hard statistics, observers believe the number of all-cash purchasers has been increasing, spurred, at least until recently, by the long economic expansion and the stock market boom. The extent of the all-cash trend has so intrigued economists that the Federal Reserve Board and the National Association of Realtors are now collaborating to come up with more accurate figures, according to Richard Mendenhall, president of the Realtors association.

The stock market's downturn has certainly changed some cash buyers' plans, said Marilyn Larsen, owner of Lane Realty in Jericho, which acts as the selling agent for several new-home communities on Long Island and in Queens. For example, many of the contracts at the Smithtown golf course community known as Stonebridge Estates started as cash, Larsen said, but purchasers have been closing with financing, due to the stock market collapse.

The staple of the all-cash housing market continues to be senior citizens who are using the proceeds from the sale of a previous residence to acquire their next-and perhaps last-one.

Some, like the Zingones, are remaining in the area. Others are using their home-sale proceeds to buy retirement units elsewhere.

Margaret Corbalini, for instance, sold her house in Stony Brook three years ago, using all the proceeds to buy a new place in Sun City Grande, an active adult community just outside Phoenix.

"It just seemed like the easiest thing to do," she recently said of her all-cash purchase. "I was so relieved when I paid off the mortgage on my old house on Long Island, I said, 'Let's not bother with another one.'"

According to the Realtors' association, the average age of all-cash home buyers is 57, vs. 38 for those who borrow money.

At the senior-citizens housing projects developed by the Klar Organization, "Seventy-five percent are buying all cash," said Steven A. Klar, president of the East Meadow firm that built The Waterways.

The final 150 condo units at The Waterways, which will be in three-story buildings with underground parking, go on sale in early summer, he said. "We already have a waiting list of people with cash in hand," he said.

At a second condo project, The Hunt Club in Coram, where only four of the 286 units are left, there are no age restrictions. Even here, though, 75 percent of the senior citizens who purchased paid cash, spurred by a $2,000 discount for doing so, Klar said.

Senior citizens are also buying existing homes in all-cash deals, real estate agents say. For example, Bethany D. Marten, owner of the Home Buyers' Resource Center Inc. in Baldwin and Riverhead, a buyer broker, said she is working with a couple purchasing a resale in Long Beach for cash.

One reason senior citizens pay in full is because they think they are too old to obtain financing, industry experts say. But under the federal Equal Credit Opportunity Act, it is illegal for a lender to turn down a buyer solely because of age.

Senior citizens don't have to be working, as long as they have the resources to cover monthly mortgage payments, said Ingrid Beckles, vice president of credit policy at PNC Mortgage, a national lender based in Vernon Hills, Ill.

"We look at the same factors for seniors as we do for everyone else: income stream, assets, credit and liabilities," Beckles said. "But if the assets generate the income, that's OK as long as it's enough to afford the payments."

Many senior citizens, in fact, don't pay cash for their retirement homes, especially in higher-priced developments.

At Harbor View in Port Washington, where the villa and estate units start at $600,000, buyers generally take out mortgages on the advice of their accountants, Larsen said. These purchasers usually are also buying another retirement home in a warmer climate, and even though they are selling a large primary residence whose proceeds would cover the two new homes, their accountants recommend financing because mortgage rates are so low, she said.

Still, some senior citizens may not want or need a typical mortgage, financial experts say. If homeowners are at least 62 and have enough equity in their old place, they can use a reverse mortgage to buy a new home, keep some cash for themselves and still eliminate their monthly mortgage payments.

A reverse mortgage is one in which the lender pays the borrower, either in one lump sum or monthly, based on the borrower's age, estimated longevity and the value of the property. No payments are required as long as the borrowers occupy the house; once they move out, the loan will be due and payable.

With a version of reverse mortgage known as "Home Keeper for Home Purchase," senior citizens can use the equity they have in one house to buy another. (They can get more information or find a reverse mortgage lender in their area by calling Fannie Mae's Consumer Resource Center at 800-732-6643).

While the economic gains of recent years have helped younger families buy homes, the high prices on Long Island and in Queens have prompted most buyers, particularly first-timers, to finance as much as they can, Marten said.

Developer Klar has noted a few instances where parents have paid cash to buy a first home for their children, but usually parental assistance comes as a gift of the down payment, he said.

Meanwhile, some of the new wave of immigrants in the New York area are paying cash because that's the way homes are bought in their native countries, said Tayseer Razik, owner of Re/Max Universal Real Estate in Bayside.

For example, Holly Park, an associate broker with Re/Max Universal sees about one out of every 50 of her Chinese buyers paying cash. The numbers would be higher, she said, if not for the relatively steep prices; homes in Bayside start at about $380,000. Many that take financing put down $150,000 or more, which would buy a house outright in some communities, Park said.

In addition, some pay cash for religious reasons, Razik said. For example, it is against the Muslim religion to pay or charge interest, said Razik, a Muslim himself.

One sizable group of cash buyers on Long Island, in particular, is the second-home buyer in the Hamptons, experts say.

"The more expensive the home, the more frequently they pay all cash," said Frank Newbold, vice president of Sotheby's International Realty with three East End offices including Bridgehampton. He estimated 50 percent of the firm's home sales are finance-free. Money comes from the sale of another property, investment profits or cash on hand.

These buyers pay cash sometimes to try to get a discount on the asking price, Newbold said.

Paying cash, they can close the deal immediately, which is "very appealing to a seller," he said. In homes with multiple bids, a cash offer "is a way of making yourself first in line."

Furthermore, many wealthy buyers pay cash because they don't want to disclose their finances to the seller or a lender. Some of the homes are bought in corporate names. Once the deal closes, the buyer may take out a mortgage later on, he said.

While an all-cash offer may give a buyer greater bargaining power, that's not always the case, unless you are dealing with an extremely motivated seller who wants out fast, real estate agents say.

If you are buying a new place, though, your builder may be willing to knock something off the price. The Del Webb Corp., a big Phoenix-based builder of active adult communities in several states, including the one where former Stony Brook resident Corbalini moved, offers a 6.4 percent break for buyers who pay in full a year before closing.

In order to get the full markdown, buyers would have to let Del Webb have use of their money for seven months before the company started building their homes, since Del Webb works on a five-month construction schedule.

About four out of every 10 of the company's customers pay for their homes in advance, according to Bob Hawks, manager of sales administration at the company's 6,000-home Sun City project in Huntley, Ill. Two more eventually close with cash.

Experts say paying cash up-front is generally not a big risk when the builder is of the size of Del Webb, which recently was acquired by Michigan-based Pulte Homes. With a smaller builder, they caution, buyers had better check out the company thoroughly before handing over their nest eggs.

"It's a good deal-unless he can't finish the house," Hawks said. "If he goes into bankruptcy, you're just another unsecured creditor."

An Architectural Drawing;
Lottery opens door to affordable homes

BYLINE: By Samuel Bruchey; STAFF WRITER
SECTION: NEWS, Pg. A06
April 8, 2001 Sunday NASSAU AND SUFFOLK EDITION

Just minutes before the lottery began Friday night, Frances Granahan squeezed into a packed Huntington Town Hall and joined hundreds of people hoping to trump an oppressive real estate market by getting their name called.

The Dix Hills mother stood in place of her son, Matthew, one of 700 people who applied to buy a home at the Highview at Huntington, a new development in Huntington Station with 100 units of affordable housing.

When his name was called just after 6 p.m., the 24-year-old police academy recruit was patrolling a street in Brooklyn and had no idea he was the first winner.

But like a thoroughbred, his mother bolted toward the podium to claim her son's prize.

"That's my son!" she shrieked. "He's about to get married. He's graduating from the academy in May. Now he's got a house of his own!"

Delirious with excitement, she forked over a $250 retainer check and set a date for Matthew to apply for a mortgage. Then she took an offering book describing the complex and rushed home to wait for her son.

If only buying a home in Huntington were always so effortless.

Low- and modest-income families have historically struggled to find housing in the area, in part because several recent housing proposals have been designed mostly for one-bedroom units instead of family-friendly two- and three-bedroom units.

Other low-income housing proposals, such as Matinecock Court in Northport, have met with stiff resistance from civic groups fearful that surrounding property values will suffer. Twenty years after it was first introduced, construction on the site has yet to begin.

"Huntington does not have the best record in the past with housing," said Jim Morgo, president of the Long Island Housing Partnership, which assisted with Friday's lottery. "This is a big step in the right direction."

Compared to most homes in Huntington, which average $400,000 on the open market (homes in Huntington Station average $200,000),the Highview is a considerable bargain.

Its two-bedroom range-style units, built by the Klar Organization of East Meadow, will be sold for $126,100. Its three-bedroom duplexes will be sold at $143,800. All of the units, which are gray and have dark green doors and window shutters, come with a single-car garage, and the owner's choice of rugs, bathroom and kitchen tile.

"You're not buying something that's 40 or 50 years old, someone else's mess," said Amanda Ewiss of Northport who sat with her 17-month-old daughter, Trudy, but did not win a home.

Fifty-one of the units come with a $25,000 subsidy from the New York State Affordable Housing Cooperation for first-time home owners, such as Matthew Granahan, who earn 80 percent of the county's median income.

"I never thought I would get so lucky so soon," Granahan said yesterday. Granahan, like all those named Friday, must still qualify for a mortgage. Should he be approved, he will have a week to sign a contract, then move into his new home when construction is complete this summer.

"These are people who would never be able to buy a home," said Morgo, adding that over a period of six years, home owners accrue a net worth that is nine times greater than people of the same economic strata who rent.

But for every winner Friday there were six losers. Bernard Gilbert and his wife, Loreen, of Amityville, said they felt lucky going into the lottery. But as the hours wore on and their names weren't called, they slumped against a wall and finally put on their jackets to leave, no better off than when they came.

"Finding a home here is never easy," Bernard Gilbert said, "that's just the bottom line."

COVER STORY: BORN TO BUILD

BYLINE: By Laura Koss-Feder; Laura Koss-Feder is freelance writer
SECTION: REAL ESTATE, Pg. C06
March 2, 2001 Friday ALL EDITIONS

This is the third in an occasional series focusing on local builders.

WHEN HE WAS four years old, Steven Klar began tagging along on Sundays with his father, Henry, to visit housing development sites. Throughout his childhood and teen years, Steven remained involved with his father's realty firm, working as a sales person when he was just 18 years old.

By the time Klar was 27, he had taken over the reins of the business and now, at 53, he is president of The Klar Organization, an East Meadow-based firm that does everything from designing to marketing the homes it builds, which range from the affordable to the luxurious.

"I love to build and I love what I do," Klar said. "I was groomed to be in the business and it has always been in my blood."

Over the years, the firm has sold about 55,000 homes, a mix of housing designs and styles, including single-family homes, townhouses and condominiums. Prices range from about $125,000 to $700,000.

Last month, Klar and Huntington Town officials held a ceremonial ribbon-cutting for the Highview at Huntington-the largest affordable housing initiative the town has embarked on in at least a decade.

Klar was selected by the town to build the Highview, a 100-unit development of two-bedroom co-ops and three-bedroom townhouses that will be completed by summer. Fifty-one of the homes are being subsidized from a state grant arranged through the Long Island Housing Partnership, designed to reduce the costs by up to $25,000 for families that meet income requirements.

The subsidized two-bedroom units will cost $101,100 and the three-bedroom homes will sell for $118,800. The non-subsidized homes will go for $126,100 for a two-bedroom and $143,800 for a three-bedroom.

"I did this as a give-back to the community," said Klar, a native of Roslyn who still lives on the North Shore.

Still, he added that such projects barely put a dent in the affordable-housing shortage on Long Island. Just a week after opening, "a couple thousand people have come through our door" to apply for one of the units, he said. "There's a giant need for this."

Town officials located the Highview on Route 110, within walking distance of the Long Island Rail Road station-a big benefit for those needing mass transit.

"The convenience, design and affordability of this kind of development will allow many to afford their own home and be able to work in close proximity to where they live," said partnership president Jim Morgo. "A willing municipality like Huntington is what builders like Steven Klar need to create these kind of homes which are needed by so many."

For his part, Klar, who is also an attorney, says he strives to provide the best buy in any category of home he builds.

"Our homes are always affordable for the particular category they are in, whether it's a condo, senior housing, or a single-family home," Klar said.

Observers who know Klar say his ability to know what customers want and what the market will bear has helped his company grow, despite turbulent times such as the 1970s, when a deep recession crippled many developers and real estate agents in the area.

"Even in a downturn, he [Klar] has managed to do well, since he listens to what customers are asking for and really understands the market," said Bruce Meltzer, president of Medford-based Triangle Building Products Corp., who has been doing business with Klar for about 30 years. "Maybe that comes from years of being a successful broker before he was a builder."

The history of The Klar Organization dates back to 1947, when Henry Klar, also an attorney, launched Klar Realty. Steven Klar, while maintaining ties with the business, went to the University of Toledo and then Brooklyn Law School in 1973, specializing in corporate, contract, financing, and real estate law. Klar said he wanted to use his background in law and business and a "sense of social consciousness" to help others-he even made an unsuccessful run for Congress in 1978.

He officially took over the business from his father in 1975 and, in 1979, broadened the company's scope to include building homes. Since then, the firm has built and sold a variety of styles of homes all over Long Island, including Dix Hills, Hauppauge, St. James, Babylon, Kings Park, and Manhasset.

Local projects currently under construction include the Waterways at Moriches, a 120-unit, gated complex of villa homes for those 55 and older that are selling for $200,000 to $260,000. The community offers amenities like a private marina, clubhouse, pool, and four tennis courts.

Also in Moriches is the Bay Colony, which will feature 160 condos for those 55 and over, selling for $210,000 to $280,000. In addition, Klar is building WillowWood at Oakdale, which will offer 67 two- and three-bedroom townhouses selling for $200,000 to $250,000 when completed by year-end.

Over the next five years, Klar said is looking to build in areas such as Coram and Yaphank in eastern Suffolk County. But beyond that, he sees more of his firm's work focused outside Long Island, establishing offices in upstate New York and Florida.

"Long Island is running out of space where to build," Klar said. "I hope never to leave Long Island, but there is only so much land mass out there. In other areas, like upstate and in Florida, I also can build a mix of homes with more land available."

Others who have worked with Klar said that his passion for building a variety of affordable homes on Long Island has kept him in the business for so many years.

But they worry that he and others like him in the industry will begin focusing more on other areas to build such homes.

"We need more people like Steve, who are willing to build a variety of different kinds of housing," said Bob Wieboldt, executive vice president of the Long Island Builders Institute, a trade group in Islandia. "We have a lot of young couples and empty-nesters who need condos, townhouses and two-family houses, not just the traditional, four-bedroom colonials."

Downtown areas with empty stores and offices could particularly receive a boost from the addition of higher-density housing, such as apartments and townhouses, that would help revitalize these towns and bring more people back to Main Street, Wieboldt added.

"It can be difficult for developers like Steven to put up higher density semi-attached homes if neighborhoods are moving more to four- and five-acre zoning," noted David Steinberg, president of Long Island University, where Klar has been a trustee for about a decade. "He [Klar] has been able to make a success of different developments where others have failed."

Pearl Kamer, chief economist for the Long Island Association, echoes such views.

"There has been a 40-year-long resistance to a lot of two-family homes and apartment buildings, for fear that Long Island will start to look and feel like the city," Kamer said. "But the truth is, we need developers to build smaller homes, apartments, and middle-income housing to keep more young people and seniors here on Long Island and to help rejuvenate some of our older, downtown areas."