Sep

19

Long Island Real Estate: 4 More Years!

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Picture supporters at a political rally yelling “4 more years!”. Only the rally isn’t a rally and the chant is for the recovery timeline of the Long Island real estate market. Ouch, that stings! Unfortunately, that’s the story from the experts…who could be wrong…but in 2007, 2008, 2009, and thus far in 2010, they, nor I, have been wrong about the real estate market, so why would I brush this information off?

Once again, I am reiterating to my readers, especially my homeowners who have been disagreeing with me about the real estate market, sell now. Believe! Real estate is a long term investment and you’ve been invested long enough. The time to act is now.

Okay, now for the information. Four more years! What’s that all about?

The CME Group is a future and options trading company that measures risks in different markets. What you’re looking at above is their prediction for the real estate market. What they and many economists are seeing is a continuing oversupply of homes for sale and they’re accounting for other factors like increased distressed sales (foreclosures and short sales).

Here on Long Island, remember that in August there were approximately 1900 closings (Demand) and…42,318 homes for sale (Supply). That’s a tremendous difference and it’s not going to just go away overnight. When demand is level with supply or higher, then prices will truly stabalize. Unfortunately, we’re not going to have 30,000 homeowners suddenly pull their home off the market and if they did, another 30,000 would list within a week!

According to the CME Group analysis of the real estate market, through November of 2014, the real estate market will not recover back to November 2010 levels.

Now of course, there are varying opinions so let’s look at them. According to MacroMarket LLC and their Home Price Expectation Survey, the market may see return to August 2010 price levels sometime in 2012.

Home Price Expectation Survey

Overall, if I were to “split the difference”, I am going to make my own prediction and say that summer of 2013, the Long Island real estate market, will be back to current day values. Over the next 2 years, I believe that we will work through over 70% of the foreclosure inventory that’s going to hit the market in the next 18 months. We will see an additional 35,000 homeowners put their home on the market at varying times and we will average over 32,000 homes for sale each month for the next 24 months.

Many of you who are reading this now, will call me (hopefully) and put your home on the market and we will sell your home. You will all try and “time the market” and see it for what it is – not a good time to sell, but a great time to buy.

In that last 12 to 18 months, heading into spring of 2013, we will see an unbelievable amount of buyers come to the market and we will sell more homes in that Spring than in anytime in history, nationwide, with 2012 being the second most. Those 2 springs will get many homeowners like you, moving on in your life…at a lower price than now, so I’m not suggesting you wait, but my guess is, most of you will wait (mistakenly) for those times to roll by because you don’t believe what I’m talking about now. It is what it is, prove me wrong, call me now.

By the end of the summer of 2013, the Long Island real estate market will see a transformation into a semi-normal real estate market where there is less than 20,000 homes for sale and as we move into 2014, the market will be selling between 1,500 to 2,500 units a month.

Now how do I know this? I don’t. It’s a prediction based on what I’ve seen in the last 4 years. It’s been a struggle to get to this point, where homeowners are finally realizing that the days of being in the driver seat and obtaining what they want for their home are gone. It hurts to say that. It hurts to write this article. But it is necessary.

When 79% of economists and analysts say that there will be further declines in the market, it shouldn’t surprise you, a reader and subscriber to my newsletter. It is what it is and that’s the point of my entire purpose for writing these articles.

If you’ve been talking with me on and off for a few years or if you’ve just started reading my blog articles on the real estate market, I hope you don’t tune out this valuable information because I guarantee, you won’t get it anywhere else. My purpose in writing isn’t to “hard sell” you into listing your home for sale. My purpose isn’t to present doom and gloom.

My purpose is to present you with the most factual information I can so that you can come to grips with the reality of this market and make the best decision you can for you, your family and your future.

I can be reached at (631)831-9048.

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Sep

9

To Buy Or Not To Buy?

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The home buyer on Long Island is faced with a critical question that begs for a decision. Obviously it is; To buy or not to buy? During the past few months, I’ve written a few articles citing why now is a good time…no scratch that…great time to buy. I’ve pointed out data that demonstrates how now is one of the most affordable times to buy. And I’ve talked about the historic interest rates as well as the prices being down over 35% and back to 2003 levels.

Now having pointed out the obvious, one more thing I want to emphasize is how prices are down to 2003 levels. In addition to pointing out the obvious, I want to stress one thing first, that’s a 7 year time travel backwards! 7 years! But here’s something to stick in your pipe, smoke and ponder, what happens when you combine this fact with the interest rate of today?

HomeValuesNY.com

This is what makes now the time! An interest rate difference of nearly 2% less in 2010, on a $200,000 mortgage, saves you about $220 a month in interest payments. Take that one step further, that’s $2,640 a year and $79,200 over 30 years!

And most importantly, it gives you more buying power. What’s buying power? It’s the difference between 3 bedrooms and 4 or even 5 bedrooms and a full finished basement and perhaps even a 2 car garage! Buying power allows you to buy more of a home because the cost is less!

I’ll leave you with the graph below that shows where rates are now. There’s nothing left for me to do but wait for your call. To buy or not to buy? It’s your call.

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Sep

9

Real Estate Market Confusion

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The confusion over what’s happening in this real estate market can be very frustrating. One month or day, the headlines say one thing and the next something else! The recent quotes in the Wall Street Journal and Reuters tells the tale all too well.

While one media outlet predicts the worst and says prices could drop another 20%, the next day, another major news outlet says prices might rise slightly. And that’s a difference of one day! So where does that leave you, the homeowner or home buyer trying to make sense of everything?

If you pay attention to the stock market, what’s happening there is very similar to the real estate market. Owners of stock and buyers of stock (or mutual funds, bonds, etc) are unsure of the market. What is said to be a great value isn’t necessarily being “bought” by either owner or buyer. Uncertainty rules the day and that’s why the stock market is either generally flat despite excellent balance sheets and good news for a diverse number of sectors or it’s down.

The real estate market is suffering from the same uncertainty. One of those reasons could be that even the brightest and best experts in the field are modifying their predictions month after month. For example, the graph below shows how from May through August of this year, the bottom and rise of the market has been changed every month and take a particular minute to notice that it hasn’t improved. What it means is, the predictions are being modified in two directions.

Each month the “bottom” is slightly pushed back (currently August 2011 is the overall national prediction) and almost more importantly, the analysis of cumulative equity rising through 2015 declines. Ouch!

A few things to look for in the coming weeks on this website is what will be impacting the real estate market and Long Island. That’s what we must focus on as Long Islanders because real estate is local. So my message here is, don’t believe the hype. If you have a question or hear something in the media, feel free to call me! So when you read a quote like the following, I’ll be able to help you make sense of it.

“A large number of homeowners anxiously await the opportunity to sell. Five percent of U.S. homeowners say they are very likely to put their home on the market in the next six months if they see signs of a real estate market turnaround. This translates into 3.8 million homes with the potential to come into the market.”

Call me, let’s talk! (631)831-9048

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Sep

3

What If You Want (Or Need) To Sell In The Next 6 Months?

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The government has attempted to help the housing market during the past few years and churned out two short-term fixes, purchasing mortgage-backed securities and home buyer tax credits. But now, in September of 2010, the housing market is looking at a continued downward trend. It’s obvious that the employment challenges of many communities across the country including Long Island, are a main obstacle to any housing recovery.

Even if the government announced some incredible plan to lower taxes and cut spending and offer incentives to big and small businesses to hire employees, this still wouldn’t have any noticeable impact on the housing market in the immediate future and most likely would take 12 to 18 months before having any impact on housing demand.

So where does that leave you, the homeowner who wants (or needs) to sell in the next 6 months?

A new jobs bill will not help miraculously stabalize your home’s value. There won’t be a surge in consumer confidence in time (people need money and a stable job to feel confident enough to buy). The only solution at this point in time, is to take a step back and evaluate your circumstances, take a good hard look at your home’s value, discuss it with a professional real estate agent and price it at a number it will sell. It’s not easy, but it’s what must be done.

Many housing experts and financial gurus are saying that prices will continue to decline across the country during the next 6 months. Some of you reading this, I’ve met and I’ve been talking to you since 2007 urging you to price your home so it sells…and many of you have lost over $100,000 in equity and now you’re still telling me that “next spring” things will be better.

Spring of 2007, 2008, 2009, and 2010 have come and gone. And prices are still declining.

Supply and demand is off balance.

On Long Island there are over 30,000 homes for sale. Across Long Island, there are thousands of foreclosures waiting to come to the market. Unemployment will not improve overnight and no jobs bill will create a miracle of consumer confidence. Buyers are worried they’ll lose their job and be foreclosed on and they’re worried about taking on the investment in a home that’s going to continue declining in value over the next 6 months…1 year…2 years? Fear has clearly gotten in the way of rational thought when it comes to many buyers who have good job security, credit worthiness, and money in the bank.

So demand is a lot less than supply. When this occurs, prices soften. Last month, the Long Island real estate market saw less than 1900 homes close and 2,345 homes go into contract while the market added over 12,000 homes for sale in the 2nd quarter of 2010 for a total of 42,318 homes for sale throughout Queens(13,055), Nassau (12,521) and Suffolk (16,742).

So 1900 closings (Demand) and…42,318 homes for sale (Supply).

I don’t think there’s much else to say other than, next spring, 2011 – You’re not going to sell your home for what it was worth in 2006 or 2007 or 2008 or 2009 and not what it’s worth now in 2010.

What about 2012 or 2013? I’ve answered that question in previous articles.

Whether or not you want to stay around and make a personal decision on not moving on with your plans in life is your business. In my experience, I’ve had many homeowners tell me in 2008 that they were going to “ride it out” and that they didn’t “have to sell”. And in 2010, I sold about 5 of those homes for about 20% less than what they would have sold for in 2008. They called me and said, “I need to sell”. So we did and they are happy.

It’s easy to say you’re going to ride out rough waters, but once you’re in them, you get tired and life is too short to be tired day in and day out.

Finally, I want to leave you with this analogy. If you sell now, you’ll be selling your home while it drifts in rough waters, but you’ll be buying someone else’s home in the same rough waters. The trade is even.

If you own your other home already or you’re not intending to buy a home once you sell now, if you really want to move and do whatever it is that’s calling you, take the information I have here and think long and hard about what you want (or need) in the next 4 to 6 years. Call me. Let’s go over everything. I will strip the information down and show you the data and help you make sense of it all.

I look forward to your call. (631)831-9048.

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Sep

19

Long Island Real Estate: 4 More Years!

Sep

9

To Buy Or Not To Buy?

Sep

9

Real Estate Market Confusion

Sep

3

What If You Want (Or Need) To Sell In The Next 6 Months?

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