Oct

31

Long Island Real Estate Market: Home Pricing Update

Filed Under Sellers | 1 Comment

The median price of homes under contract in the Long Island real estate market (Nassau and Suffolk) fell again last month. Additionally, the number of available homes on the market fell. The median price of homes under contract dropped $15,000 in August from $350,000 to $335,000 in September.

In September of 2007, median price of a home sold was $380,000, a 12% decline. Nassau saw less severe declines of $417,300 in August to $415,000 in September of this year, with a decline from $445,000 this time last year (a 6.5% deline).

Throughout the island, there are less properties on the market than there was a year ago. There were 14,413 homes on the market in Suffolk County in September of this year, compared to 14,761 this time last year. What this shows is a decline in inventory, albeit a marginal decline. This means less homes are coming to market for sale.

The months of supply throughout the Long Island real estate market has declined as well from 19 months last year to 14.8 months as of September this year. The months of supply helps us determine how long it would take to sell every house that’s currently for sale. While this is over a 20% decline in months supply, 14.8% is still very high.


To summarize and make sense of all of this data, it’s important to note that these are all indicators that the market will continue to slide downward as we head into 2009 and probably well into 2010. Many experts were predicting Spring, 2009 as the overall bottom, but these numbers don’t indicate a bottom in 2009. It is a game of “catch up” and the numbers homeowners need to improve are getting better, but that’s just to get us to break even or to the bottom. From there, the numbers need to improve in the opposite direction for prices to actually go up, which does not seem to be anywhere in the near future.

If you don’t want to wait around indefinitely trying to recoupe the loss of equity during the past 32 months or so, the first step would be to determine your home’s value - now. See where you stand. I like to look at this situation this way: If it takes 40 months of decline to lose 25%, it will probably take at least that much to gain it back. Historically, over the past 100 years, real estate realizes a respectable 5% appreciative value annually. Forty months is equal to just over 3 years. Once we reach bottom, the best case scenario is the market will again begin realizing 5% appreciation which is actually on 15% compounded value.

All the jibberish aside, if you can follow it - it’s going to be a long time before the Long Island real estate market is back to normal. Keep in mind that this article did not even take into account a “global recession”, local foreclosures and the increasing number of short sales, as well as the credit crunch and decreased qualified buyer pool. And of course, our ever-increasing property tax burden, which in Nassua County especially, doesn’t seem to have any hope for, at the very least, a holding pattern, as county officials are looking to increase property taxes there once again.

The purpose of this article is to help those homeowners who are on the fence or mistakenly thinking that they can wait until Spring, 2009 to miraculously sell their home “for more”, to consider the hard reality that now is the best time to sell their home. For those homeowners who are “in it for the long haul”, obviously that’s a better position to be in, but that “long haul” must be carefully weighed against reality.

For questions about the Long Island real estate market, please feel free to call me at anytime at 631.587.1700, ext. 51.

(c) Copyright, 2008 www.tommcgiveron.com

By Thomas McGiveron, Licensed Real Estate Salesperson


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Oct

28

How Do You Buy A Home?

Filed Under Buyers | 1 Comment

In working with first-time homebuyers, there’s one clear question that needs a simple answer. How do you buy a home? That’s the question. The purchase of real estate is unlike any other purchase because it is a major financial transaction. One that should not be taken lightly (as many are finding out now after the sub-prime lending frenzy).

So how do you buy a home?

I’m going to share with you in this article, the very basic plan on how you buy a home. It is up to the reader to do their own due-diligence and learn more about the topic on their own - or by calling me.


As a first-time buyer, in one of the best buyers markets in decades, first and foremost, it is in your best interest, to find a good agent. Before I got my real estate license, I was an actual human being just like you, the reader (attempt at humor there). I believed that I, and I alone, would be best suited to “find a deal“.

After obtaining my license and working with many buyers, I have come to find that working with a qualified professional is definitely better than going it alone, thinking you’re “all that and a bag of chips”. Of course you have to find the right agent. That’s a personal preference, but they have to use cutting-edge tools and be available 24/7.

Now a good real estate agent will have the partners in the business and encourage you to either use their services or your own professional contacts in the mortgage/banking industry to determine your mortgage approval status. Determining how much you can afford and understanding the mortgage process is a great place to start.

Once you have established a basic knowledge for how much you can afford, it’s important to understand what you like, as a buyer. This may take a few visits to some open houses as you do some preliminary work to lay the foundation for your search. Knowing what you like and do not like is definitely advantageous to square away in the beginning. A worksheet that you take with you to view homes can help remind you of what you like and do not like. Second to this, allow the real estate agent you begin working with to guide your search a little. See what they come up with. If they can’t demonstrate an understanding of what it is you’re looking for, or they can’t (or don’t) talk to you about the realities of the market conditions and advise you about your price range, then it may be time to move on.

When you come to the point of making an offer, the basics of what to expect are simple. Once a price is agreed to, you will more than likely, have a home inspection completed. The home inspection is used specifically to determine if there are any major problems with the home. It is not a tool to renegotiate the tentative agreed upon price and terms.

From this point, the seller’s attorney will generate contracts and send them to your attorney. From this point, legalities will be discussed and as soon as both parties have agreed to contract stipulations and terms, the contracts will be signed. As the buyer, you will provide your attorney with the down payment, in the form of a check (make sure you have the money in the bank)!

Items such as an appraisal of the homes value, which will be used to establish an approval for the loan amount for your lender and verify to you and to all parties, that the home is valued accordingly.

Your attorney will order a title search, which will verify all information pertaining to liens on the property. You don’t want to buy a home with outstanding liens on it for obvious reasons.

You will then choose a home insurance carrier and have a policy in place to protect the home upon taking possession of the property. Your lender will require all of these items to be in place prior to closing.

The real estate closing will be scheduled according to each parties availability, most importantly, the buyers, sellers and their respective attorneys as well as the bank and title company. The real estate agent(s) will rearrange their schedule to match the closing date and their availability has no bearing on the closing whatsoever.

These are the basic to buying a home. If you have any questions on this topic, please feel free to call me at 631.831.9048 or leave a comment.

(c) Copyright, 2008 www.tommcgiveron.com

By Thomas McGiveron, Licensed Real Estate Salesperson


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Oct

28

Client Testimonial: Kevin M.

Filed Under Buyers, Sellers, Sellers & Buyers | Leave a Comment

I just wanted to thank you both for everything. It’s a rough market out there right now and I appreciate everything you guys have done and what you have to go through in these types of transactions. Thanks for your efforts in helping us, especially in regards to your hard work, your excellent availability and tenacity in a tough market. I will certainly recommend you to anyone I know in the area if they go looking to sell (or buy for that matter).

Kevin M. - 10/17/08

Thank you Kevin for those kind words. My partner, Paul Musso, and I helped sell Kevin’s home in West Babylon. It was a great house to market, as it was always ready to show. When we first began the listing, I thought it would be a fast sale, quick and easy. This market proved otherwise. We managed to still sell it in 78 days, but I first thought we would sell it within the first 30 days because it was a great house, a cut above the rest in the area. Through our efforts of aggressively following up with other agents and buyers, we managed to sell it and help Kevin and his family move on. Congratulations and good luck!

Oct

17

Client Testimonial: Mary & Carmine

Filed Under Sellers & Buyers | Leave a Comment

Dear Tom,

This card is just to say thank you for all your help and direction. You made this experience enjoyable with your sense of humor during a very scary time. It has been a dream come true and you played a very big part of it. You are honest and hard-working and those are qualities you don’t see often today. So hopefully this is only the beginning of a long friendship.

Thank you from our hearts,
Carmine & Mary A.

First let me say thank you to Carmine and Mary for allowing me the opportunity to work for them and secondly for the very nice comments. Thanks.

Carmine and Mary came to me via a referral from my wife’s CEO at her job. They were first-time homebuyers didn’t know much about buying a home, other than it costs a lot of money!
Carmine and Mary were committed to purchasing a home and we all worked hard - but always had a lot of fun. They both asked a lot of questions and became very well educated first-time homebuyers. The home Carmine and Mary purchased was a Cape with beautiful dark hardwood floors and a finished basement.

So to Carmine and Mary, I say, “Congratulazioni!” (congratulations!)

Oct

16

STAR Program For New York State

Filed Under Buyers, Sellers, Sellers & Buyers, Taxing Matters | Leave a Comment

The STAR program for New York state is one of those elements of Long Island real estate that talked about alot, but understood very little. Most people refer to the STAR program as a simple real estate property tax decrease. STAR is an acronym for School Tax Relief.

The STAR program application is completed by homeowners one time and provides an exemption from school taxes for non-owner occupied, primary residents. The deadline for filing is generally March 1st of each year, however it is best to check with your local tax assessor.

A great resource for information on the STAR program is http://www.orps.state.ny.us/star/index.cfm.


Oct

11

Long Island Short Sales

Filed Under Foreclosure Info, Sellers, Sellers & Buyers | 2 Comments

Long Island short sales are on the rise. The numbers are staggering. According to the Long Island Board Of Realtors, short sales will continue to rise and real estate agents will be scrambling to assist homeowners in danger of losing their homes to foreclosure.

However, in my travels as a professional real estate salesperson, I find that many homeowners do not know anything about “short sales”. A short sale occurs when the seller’s lender (the bank that holds the mortgage on the house) accepts a discounted pay off in order to release the existing mortgage. Basically, the bank agrees to take less than what is owed on the property and the homeowner is able to walk away from the property without having any further debt owed to the lender.

On Long Island, short sales are becoming increasingly “popular” with homeowners who cannot pay their mortgage due to mortgage resets on adjustable rate mortgages.

The main reason why short sales are the most viable loss mitigation alternative is because the effect on the homeowner’s credit is much less damaging than a foreclosure. On a FICO score, the average loss is 300 to 400 points when a homeowner goes through the process of foreclosure. However, if the homeowner chooses to negotiate a short sale, the drop in FICO score may only be 80 to 100 points, assuming their mortgage is the only debt they can’t pay.

The short sale “package” that many homeowners will need to submit to the bank will include a hardship letter written by the owner(s) which explains the circumstances surrounding their inability to pay the mortgage. The lender will also require an authorization form allowing the real estate agent and/or attorney for the seller, to speak to the bank and negotiate the sale approval. Additionally, the lender will want proof that the money coming into the household is insufficient to cover the mortgage, so W-2’s, bank statements, and check stubs will be required.

The agent you choose to assist you must have extensive knowledge of the short sale process. On Long Island, many real estate agents do not have the experience to successfully complete a short sale transaction. Many agents will just tie up a property in a long listing agreement, only to poorly advise the seller and ultimately pass the point at which a short sale will even be acceptable to the lender.

As a homeowner, it is imperative that certain objectives are met with regard to the conducting of a short sale. Since I consider these objectives privaleged information I will not list them here. If you are a homeowner and would like to discuss the process in depth, I am available at 631.831.9048.

For more information on Long Island foreclosures - click here.

(c) Copyright 2008 www.tommcgiveron.com

By Thomas McGiveron, Licensed Real Estate Salesperson


Oct

9

Long Island Real Estate Market: Sell Now Or Hold On…For A Long Time

Filed Under Sellers, Sellers & Buyers | Leave a Comment

I have been writing articles about the Long Island real estate market for some time now and I came across the perfect information that illustrates what homeowners might expect during the next few years. I thought about the title to this article and decided to just lay it all out there.

What you’re about to read is not just my opinion. I’m not as self-absorbed or diluted as our typical politicians who seem to know it all when things are good and point the finger when they’re not. No, I don’t, and will not, publish articles about what I think or feel. Rather, I publish articles about information.

1008-freddie-mac.jpg

You may click the image(s) to enlarge it. The information is forwarded-looking in nature and deals with what’s down the road for real estate values. I find myself talking with many homeowners who ask me “my opinion” about what’s in store for the Long Island real estate market. As I explain to them the ramifications for “holding on” and not selling now, or asking a 2005 price for their home in 2008, I get alot of, “Well, you don’t know what’s going to happen in the future…” or “I think it’s going to come back next spring…”

Well Freddie Mac doesn’t think so according to Bloomberg News who quoted officials citing the S&P Case/Schiller Home Price Index. (I’m scratching my head)…So I guess the average homeowner who is a teacher or a plumber or a doctor knows more about the real estate market than Freddie Mac or Bloomberg News or Case and Schiller. See the next slide.

1008-radar-logic.jpg

I took this quote directly from the previous slide: Radar Logic publishes price-per-square-foot data used as the basis for the Residential Property Index, or RPX market, used by most hedge funds and institutional investors to hedge their mortgage-related bets. The 2011 estimate is not the company’s own, but is based on a forward curve produced from futures trading in the RPX market.

This information is gathered and based on hard data. Data that people collect at Radar Logic that make up the RPX market, cited on Sqawk Box, Mad Money and other financial-related news programs. The data suggests that home values will continue a downward direction across the nation. So do you still think next spring will bring back the 20% equity loss during the past 3 years? Enter the last slide.

Before clicking on this last slide, I want to address my cynical tone in this particular article. I’ve found that being “Mr. Niceguy” with regard to my presentation of information really doesn’t hit home as well as being somewhat cynical and hard-nosed. “Mr. Niceguy” is boring and “Mr. Cynical-In-Your-Face” helps to nail down the point. However, keep in mind that I own a home, my sister owns a home along with my Mother, other family members and friends as well and I do not take any pleasure at all from watching home values drop.

But I digress. Click the next slide.

5-year-appreciation-increments.jpg

What this slide shows is probably the single most important piece of information. It shows five year increments of the market since 1980. Now real estate values tend to increase (appreciate) about 5% per year. And during the previous 20 years, home values have appreciated a total of about 106%. So if you bought a home in 1980 for $100,000, your home in 2000 would be worth about $256,000 (appreciation values compound: 100,000 + 25% = 125,000 + 27% = 158,750, etc.).

During those 5 year increments, you’ll notice, about a 5% or more average increase - per year. Now from 2000 to 2006, you’ll notice a tremendous 89% home appreciation figure. That’s a whopping 14.8% appreciation - per year. So in 6 years, the real estate market and definitely Long Island included, realized a surge which rivaled the previous 20 years. And on Long Island, the numbers are staggering when we discuss appreciation from 2002 through 2006.

What this last slide represents is the inflated values and what experts would refer to as a signficant economic anomaly (deviation from the norm). What we’re seeing now is a market correction which may very well overcorrect itself in the form of the following:

A. Buyers not being able to get mortgages

B. Buyers refusing to buy (or “hold out for the bottom”).

C. A combination of both.

In any event, I am writing this article to inform my readers, especially homeowners, that this real estate market is not something you treat lightly or “go with your gut” when it comes to making major financial decisions about the sale or holding of your property.

I am available anytime to my clients for further discussion (as they know I am only a phone call away). If you would like to become one of my clients and hire me to help market to sell your home, please call me at 631.831.9048. For a closer look at the Long Island real estate market or to schedule a one-on-one personal meeting with me, call today.

I welcome the opportunity to assist you in any way I can.

(c) Copyright, 2008 www.tommcgiveron.com

By Thomas McGiveron, Licensed Real Estate Salesperson

Oct

7

Long Island Real Estate Market: Foreclosure Update, October 2008

Filed Under Foreclosure Info | 1 Comment

This is a foreclosure update for the Long Island real estate market. This report features the number of homes that are pending foreclosure throughout a sample of the Long Island real estate market.

Suffolk County

West Islip = 28 Homes Pending Foreclosure
Deer Park = 84 Homes Pending Foreclosure (30% increase over August)
Babylon = 12 Homes Pending Foreclosure (50% decrease)
West Babylon = 87 Homes Pending Foreclosure
Lindenhurst = 93 Homes Pending Foreclosure
Patchogue = 13 Homes Pending Foreclosure
Miller Place = 28 Homes Pending Foreclosure
Riverhead = 4 Homes Pending Foreclosure
Huntington = 50 Homes Pending Foreclosure
Port Jeff = 10 Homes Pending Foreclosure
Sayville = 19 Homes Pending Foreclosure
East Hampton = 1 Homes Pending Foreclosure
Smithtown = 7 Homes Pending Foreclosure
Hauppauge = 17 Homes Pending Foreclosure
Manorville = 18 Homes Pending Foreclosure

Total = 471 Homes Pending Foreclosure (8% Decline)

Nassau County

Farmingdale = 18 Homes Pending Foreclosure
Seaford = 4 Homes Pending Foreclosure
Massapequa = 43 Homes Pending Foreclosure
Freeport = 41 Homes Pending Foreclosure
Wantagh = 8 Homes Pending Foreclosure
Lynbrook = 2 Homes Pending Foreclosure
Elmont = 29 Homes Pending Foreclosure
Oceanside = 1 Homes Pending Foreclosure

Queens

Flushing = 78 Homes Pending Foreclosure
Bayside = 22 Homes Pending Foreclosure
Jamaica = 704 Homes Pending Foreclosure
Howard Beach = 27 Homes Pending Foreclosure

If you want information on a specific town, leave me a comment or call me at 631.831.9048.

Throughout each of the counties in the given towns selected, there was about a 10% decline in homes pending foreclosure throughout Long Island. This is good news!

The average loss of equity from a foreclosure on Long Island is about $8000. So the fewer foreclosures in your area, the better! Overall, the foreclosure numbers, gathered from RealtyTrac, appear to be declining. This is fantastic news for a number of reasons, one being, the damage to home values will be less.

This past week in the financial market, things do not seem promising. If you watch too much news, you would believe that the sky is falling. I always try not to watch the news, especially local news because it’s filled with the filth of our humanity, usually jam-packed with the worst of what our area has to offer.

I will continue to report on the Long Island foreclosure situation and see how things change from month to month. Please continue to come back. If you have any questions on a specific town, please feel free to contact me.

For the previous foreclosure updates, www.tommcgiveron.com/category/foreclosures/.

Tips for Avoiding Foreclosure