Appraisals: The Changing Value of the Beach
By Ashraya Gupta

Fire Island’s real estate sales have come a long way since the days flyers proclaimed “Auction!” Prices have reached record heights and some realtors suggest the prices may be due to a new wave of appraisers.

In the past, many banks were unwilling to finance property on the island. Fire Island was seen as a risk and people had to self-finance their homes, with only a few banks willing to lend. Appraisals were done by a handful of local Fire Islanders, who fatored into the home’s value the unique factors that determine the value of property here, including lack of vehicle access and vulnerability to floods, hurricanes, and erosion. These days, “everyone lends here,” said Carin Roth of Fire Island Real Estate. The banks then send out their own appraisers, who often “have no idea what to look for.”

But in the world of Fire Island appraisals, many of the factors one would think should impact property value aren’t always considered. Grace Corradino of Fire Island Living in Saltaire said vehicle access is not a factor, nor are the potential dangers of being located on a barrier beach. Proximity to the water, however, is considered and properties with water views are prime. But the principal factor remains comparable sales.

Roth, however, suggested that sometimes finding comparable sales simply isn’t possible. For instance, a commercial property was recently about to be appraised on Bay Walk in Ocean Beach. The appraiser wanted comparable sales, but a commercial building like that had not changed hands in several years. The appraiser decided to match the price to a Long Island grocery store. “Well, that’s just not reasonable,” said Roth.

Also in Ocean Beach, the Alligator bar and building is currently for sale by owner Lee Pokoik. He is asking $1.2 million. “That is what I would value that at too,” said Roth. “It has a lot of potential for income. We just know, those of us who have been here a long time.” As a broker, Roth tries to help appraisers from Long Island better understand Fire Island homes.

Jonee Wollensky of Fire Island Sales & Rentals agreed that outside appraisers can have an impact on prices, so she recommends specific appraisers to her clients. They work with Grossman Associates and Rogers and Taylor, mainland appraisers with Fire Island experience.

Lawrence Giunta of Rogers and Taylor said he considers several factors when making an appraisal. For example, in a limited access community like Robbins Rest, “it’s a little arbitrary to compare it to a property in Ocean Beach or Corneille Estates.” As for erosion and flooding concerns, they affect appraisals “in that they affect the market.” Since buyers are concerned, appraisals are impacted.

Giunta also painted a different picture of appraisals in the past. He was first brought here in the early ’90s, after a series of noreasters ravaged the island. Homeowners wanted to file a class-action suit because they felt their taxes were too high, especially after the damage. There was a perception that Fire Island homeowners were rich summer-residents able to afford high taxes. But Giunta found another reality: “it’s a tight-knit generational community. You have a 5-year-old living in a house that his grandparents bought 50 years ago.” It was this sense of community that kept Giunta working here. He’s not even a residential appraiser anymore, but finds himself returning to the island time and time again.

But Giunta might be an exception to current trends. Most brokers, appraisers and for that matter sellers, have no reason to drive the price down. Grace Corradino accompanies appraisers around the island and said, “I don’t have anyone here that I don’t feed good information. That way I’m assured we’re getting the numbers we want to see.”

It appears, then, that Fire Island property values have no reason to go down. With only a limited area available for development, real estate activity is consigned to a few bounded properties.

Bob Howard, owner of Bob Howard Realty in the Pines, put it simply, “In a limited market, prices have no place to go but up.”