Trading Up Amid the Bulldozers



EVERY now and then when a new furnished model would open at Meadowbrook Pointe, an age-restricted condominium community of flats, town houses and villas in Westbury that will eventually have 720 units, Carol Uffer would stroll over from her two-bedroom villa within the complex to take a look.

“I was not thinking about moving,” said Ms. Uffer, a retired New York City school principal, who bought her $645,000 duplex with a loft and its own garage in 2007, a year after construction began at Meadowbrook Pointe. “I just went to see it.”

The new two-bedroom model was larger than hers and all on one level, with a dining room and a small den. It was “laid out differently,” and it appealed to Ms. Uffer, whose unit had only an eat-in area in the kitchen. When her eight grandchildren come over for dinner, she has to move furniture.

She asked the in-house sales office to list her villa and bought the larger unit for $850,000. She plans to move to the new building as soon as she sells the place she’s in, updated with a new kitchen and listed at $659,000.

“The new unit is beautiful,” Ms. Uffer said, “and my needs have changed.” She gave up her second home in Florida three years ago to be near her family on the Island full time; and she no longer relishes stairs. “Since I had the opportunity, I decided to take it.”

She has thereby joined the ranks of those reselling homes in communities that haven’t yet even been fully built out. Construction has proceeded at a snail’s pace ever since the downturn in 2008, so it is perhaps inevitable that such resales have cropped up.

The phenomenon is the opposite of what it used to be before the bubble burst. Then, residential developments went up quickly — but never quickly enough to impede resellers in their quest to “flip” purchases for even higher asking prices.

When the market was good, during the year to 18 months a contracted home was under construction, “the project would sell out and they could sell for a profit,” said Michael Dubb, the principal and founder of the Beechwood Organization, the developer of Meadowbrook Pointe. These days, sellers of resales are likely to take a hit while buyers of resales in unfinished communities pay less than for new units.

Mr. Dubb says about 100 units have yet to be built. Of the 15 condos at the gated clubhouse community that have been listed as resales, most were, like Ms. Uffer’s, trade-ins for larger units.

Construction at Westhampton Pines, a 189-unit age-restricted community in Westhampton, began in 2005. Bruce Orr, the senior vice president for sales and marketing of Timber Ridge Homes, the developer, said there were 14 homes left to sell, with 6 not yet started and 2 resales on the market.

“The pace is definitely off, due to the housing-market collapse in 2008 and the very slow recovery over the last two years,” Mr. Orr said, adding that resales had averaged three to six a year.

The resales have traction because of “price or delivery time frame,” he said, though “most people prefer a new home because they can select all of the interior features that they want, versus buying a resale where they must accept the interior features that someone else selected.” New homes, which go up in five months, range from $585,000 to $650,000 depending on the floor plan, he said; resale listings start at $575,000. At Courthouse Commons, a Timber Ridge clubhouse-style development in Central Islip that began construction in 2006, 46 out of 252 units remain to be sold, and 5 resales are listed. New construction ranges from $220,000 to $270,000 depending on the floor plan. Resales on the market range from $200,000 to $220,000.

Mr. Dubb said that buyers opting for resales over new construction were doing “better on the price of the resale, but they are giving up warranty, customer service, the experience of a brand-new home, customizing and picking all the upgrades,” from flooring to plumbing fixtures and tile. “We are not in the business of recustomizing homes for people,” he added.

Judy Fruitbine, an associate broker with Shawn Elliott Luxury Homes & Estates with a $1.299 million listing at the Chatham, a gated North Hills community of 144 luxury town houses, described resales as “really tough” in communities where the developer is still selling.

“The problem is that the sponsor is in a position that he can cut deals that many times are less than what people that bought before are in there for,” Ms. Fruitbine said. “He throws in extras that people had to pay extra for.”

When the market was rising, she added, “it was better to buy a resale because they had everything done to it, they already paid for the upgrade.” In the decade since construction began at the Chatham, a “good number” of the 86 homes built during its first phase have turned over, said Chad Gessin, vice president for design and construction of theChatham Development Company, the developer. Construction recently began on the last 10 units, with 4 still on the market, ranging from $1.2 million to nearly $1.4 million.

When buyers visit the sales office, they are often sent to compare five- to seven-year-old resales to the newest construction. The original town houses, then priced in the $900,000s, were outfitted with Formica guest bathroom counters; the new ones have marble or granite. Bigger changes are structural and energy-efficiency-related, “which wasn’t a priority in 2002,” Mr. Gessin said.

“The resale looks like a great deal,” he added, “but you get into it, and the air-conditioning system is eight years old. The grout needs to be redone and all the hardwood floors are scratched up.” The other units, he said, are “brand-new with a bumper-to-bumper warranty.”

To move a resale in a new development, sellers are having to offer their homes turnkey, “throwing in their furnishings so it is a done deal when they walk in the door,” Ms. Fruitbine said. “It makes the product more salable.”