Aug

27

The New Housing Numbers

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People who are following the Long Island real estate market and my updates were probably not surprised by the latest story in the news about the latest housing numbers. The doom and gloom of the media, playing on peoples emotional strings for the purposes of trying to stir up ratings only helps people make poor decisions.

The tax credit during the spring, which is historically, the best time for real estate in that many buyers are buying and sellers are selling. July and August are both months where the real estate market, in normal conditions, slows down. It’s summer. People are out at the beach, not in hot open houses. Are there people buying – of course, but generally speaking, the summer is slower than Spring.

So the freak out that the media is trying to cause had no effect on me emotionally because I knew that sales would slow down. Anyone who’s following the real estate market knows this.

Now the “bad news”. Yes, prices will continue to soften because of the amount of inventory on the market. That’s a fact. Employment is high and there are many people who are still afraid to buy…just about anything. But demand will slowly increase (as it usually does during the fall and then just after the holidays).

Interest rates are at historic lows and prices are very good across the board for any type of buyer, especially first-time and move-up buyers. For the homeowner who wants to sell and “move up” to a newer home or larger home, with rates so low, even if you drop your price, you’re most likely going to be buying on the other side, at a great price as well.

These latest real estate numbers really mean very little in the larger picture. They were expected.

It is expected that about 5 million homes will sell in the next 12 months (conservative industry standard). Now the challenge is, there will be double that amount in available inventory. So which ones will sell?

The homes that will sell will be the homes with compelling prices. This means, when buyers see your home, it needs to look its best and have a price tag that makes them stop and say, “OMG, I’ve gotta have this house”. If you’re not there in that price area, then you’re home will not sell.

I hear many people say that it’s not a good time to sell. Well, they’re half right. Of course it’s not a good time to sell in the overall grand scheme of things. Yes, 2005 was the best time to sell. But that’s crying over spilled milk. Now is also a good time to sell because rates are low (more buyers can afford more to spend) and prices on the other side (when you’re buying) are low as well! Even if you’re not buying after you sell your home, think about my last article on the market and the decline of prices over the next 12 months or so. Do you want to lose another 5% to 8%? Selling now is better than selling later.

The sky is not falling and if you want to sell your home, you will be able to sell and move on with your life. You’ll just be better off financially doing it sooner than later.

If you want to discuss the value of your home and how I can assist you, please call me at (631)831-9048.

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Aug

14

How Much Appreciation Will I Get 5 Years From Now?

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I recently had one of my buying clients ask me, “How much appreciation will I get 5 years from now?” What I told him at the time was, I honestly didn’t know. So I decided to look up some information and came across an interesting piece of information.

The Home Price Expectation Survey, recently completed in July came up with an interesting number of 10%

According to this survey, much like the Case-Schiller Future Home Price Index predicts, home values are going to continue going down. As you can see from the graph, from “TODAY” you see the price indicator drop until about the middle of 2011 and then start going up. By 2013, values will be back to where they are today.

So while it’s going to take the market three years to get back to today’s values (which for sellers isn’t great compared to 2005), you can see that a modest, but respectable, appreciative value of more than 3% annually should be realized by homeowners.

So to answer the question specifically I’ll use an example. If you buy a home today at $350,000, in about five years, the home will be worth about $385,000.

I don’t know about you, but I’ll take that over the ups and downs of the stock market any day. And plus, you get a home to live in for 5 years! You can’t live in a stock.

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10

Long Island Real Estate Market: Why Should I Buy A Home?

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I’ve been working with many prospective buyers in the Long Island real estate market and one question I have to answer is, “Why should I buy a home?” And I’d like to add to this the word “now” at the end of it. But I want to point out the main reasons why home ownership is a good thing.

In this day and age of online trading and infomercials about overnight real estate riches, one thing I believe many buyers are focusing entirely too much on is the investment side of their prospective purchase. When our parents purchased homes, buying the home wasn’t based on “comps” or how much Return On Investment they’d get down the road. Buying a home was about living somewhere and owning a piece of property where a family could grow up.

Fannie Mae’s National Housing Survey for 2010 focused on major reasons for buying a home. The results, in my opinion, were very accurate and represented that many prospective buyers “get it” when it comes to the value of home ownership.

Eighty percent of respondents sited raising children and educating them was a major reason for owning a home.

Seventy-nine percent of prospective buyers noted that family safety was another major reason for owning a home.
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Aug

10

What Are the Headlines Really Saying?

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Did you ever watch the news and wonder if you’re getting the full story? These days, I’m wondering if I want the whole story! But when it comes to relying on the main stream media, one things for sure, you’ve got to really look beyond the headline to get the full story.

Below is a slide with headlines about the market from June of this year. You’ll notice that Case-Schiller, Core Logic and RPX all had positive things to say about the real estate market, but those positives are not the full story.

What I continually talk about here locally on Long Island are the amount of homes for sale and what is actually selling in a given month. In my previous article, the May 2010 update, the numbers tell the story.

The Case-Schiller Future Price Index is a powerful tool for any homeowner who wants information about the market. The future of the real estate market is of course speculative, but the numbers these experts look at tell the story. And the inventory of homes for sale is still very high. When a homeowner talks to me about their opinion of when the real estate market is going to bounce back, I consistently refer to this diagram.

Now if you’re not a numbers person,you’re probably looking at this slide and saying, “What does all this mumbo-jumbo mean?” I hear you! But honestly, in looking at that diagram, you’ve got to pay attention to the fact that while the prices look to go back up after November 2011, they don’t go back up to 2005 levels…they go back to what prices are today!

So what does this mean? It means to me, that if I were really wanting or needing to sell my home, waiting around isn’t going to make things any better in terms of what I will get for the home if I sell it today. And if I wait, my goodness, in 2013, I’ll be getting the same price I would get if I sold it today! That’s important to consider…in my opinion.

Lastly, while I’m not one to base all my decision-making on what some economists say, I will at the least listen to what they think. After all, when you want to make an informed decision, you listen to the experts. This last slide shows that 56% of 106 of the best economists and analysts think the real estate market is going to decline further.

If you have any questions about the real estate market, please feel free to visit my fan page below. Additionally, you may call me for a private consultation at (631)831-9048.

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