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These videos will explain what’s behind the impact of foreclosures in 2010. The unemployment rate is staggering and is the new challenge for the real estate market. While the Long Island real estate market has seen some improvements (small steps toward recovery), foreclosures and other distressed sales will be the topic of 2010.

For the website with the report on the impact of foreclosures throughout New York, you can visit http://data.newyorkfed.org/creditconditions.

Should you have any questions you can reach me at 631-587-1700, ext. 51.

(c) Copyright 2009, www.tommcgiveron.com
By Thomas McGiveron, LSA

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Here’s an article, Foreclosures Expected To Rise, in the Financial Post, showcasing several points that I have continually spoken to homeowners about.

If you are behind on your mortgage, you can call me and we can discuss how you can avoid foreclosure.

Tom McGiveron, LSA 1-877-765-3123, ext. 51.

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I have been plugging away in the past month about Long Island foreclosures. The recent article in Newsday entitled, Mortgage Defaults on LI Among Worst In State puts things in perspective.

What’s happening is astounding and I really believe that homeowners have no idea what’s in store down the road. The main “theme” of my content for homeowners is, if you want to or need to sell, now is the time. I know this is like a dull drum beat for those of you who frequent my website, but it’s just the truth.

But it’s the truth that I don’t think homeowners are hearing. I know many different people who really need to sell. They want to move on in their lives but just “can’t give their home away.”

It’s not about “giving it away.” This real estate market from 2002 through 2006, helped people acrue an unbelievable amount of equity in their home. And while it’s hard to swallow a 30% reduction in that equity, it’s better than the alternative (losing another 20% over the next 12 to 18 months).

With 5.2 million nonprime mortgages (meaning these are the mortgages that were written to less-than-perfect buyers a few years ago) still outstanding and facing foreclosure, we here on Long Island will be hit hard by a certain percentage of those homes. And one thing that’s not mentioned in this Newsday article is the rate at which prime borrowers (the best borrowers) are defaulting on their mortgages.

With unemployment on Long Island increasing to nearly 8%, foreclosures are going to riddle this market. As more foreclosures come to bear down on the market values of homes, the trend in the appraisal business to set market value at foreclosure levels may have an extremely damaging impact on “regular” home values. How?

An appraisal is all about comparisons looking at what’s sold in the area. As an agent who performs Broker Price Opinions for banks, I see more and more, that I need to use Bank Owned Properties as a means to measure a home’s value in any given area. From West Islip to Greenport, New York, I’m doing bank appraisals and consistently needing to drop the price values on homes to conform more with foreclosures (because that’s what’s selling).

Traditionally, an appraisal of home value didn’t focus or even include a bank-owned property, because that’s not a “normal” sale. It’s a distressed sale. You dont’ compare the two. However, in this market, with articles like this in Newsday, and agents like myself who know what’s going on, we’ve got a problem that, unfortunately, is going to continue getting worse before it gets better. The trend is for home values to begin following bank property sales because the entire market is in distress.

(c) Copyright 2009 www.tommcgiveron.com
By Thomas McGiveron, Licensed Real Estate Salesperson

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Foreclosure numbers are going to skyrocket. We keep hearing this, but what do most people really think? Seems when I speak to homeowners, either they don’t believe me or don’t think much of the threat foreclosures present to home value.

But let’s map out some of the areas that have bank-owned properties. The New York Times sports a decent tool for mapping out foreclosures throughout the New York area. This tool was featured in the article, “Battling the Decay of Foreclosures” in the NYTimes.

It’s clear we have a challenge and I think most homeowners would acknowledge at least that much. However, one thing that I keep coming back to is, articles like these on NY Times do not demonstrate the massive amount of delinquencies that are pending, nor does it highlight the incredible amount of short sales located throughout Long Island.


Reports on foreclosures cover what is on the market on the local MLS (Multiple Listing Service). These reports do not cover what is coming down the road. For instance, a short sale is not a bank-owned property, but if it doesn’t sell and the seller walks away, it will become a bank-owned property (a foreclosure).

It’s important for homeowners to understand that a foreclosure hurts equity values in a given area. The more foreclosures, the lower the home values. The greatest area of concern for any homeowner right now should be the increasing trend for foreclosures to be setting market value. This is extremely dangerous for housing stability.

Why?

Because historically, foreclosures or other distressed property sales are generally infrequent. For instance, on a given appraisal of real estate property, a foreclosure most likely is not used to determine market value for a given property.

And you know where I am going with this.

Noooowwwww, in this crazy real estate market, foreclosures and other distressed property values are being considered and are becoming more common place for determining true market value of surrounding homes.

This is a problem for any homeowner looking to sell right now or any homeowner who wants to sell within the next 3 to 5 years.

Why is this not a problem for buyers? Good question. Real estate is a long-term investment. If you’re thinking of purchasing real estate, now is the best time. Buy low. Sell high. Two complete sentences that add up to “good investment”. If you’re in this for the long-term, buying now and riding out the next several years so that ten years from now you’re ready to sell, you will almost certainly be selling for a profit!

(c) Copyright, 2009 www.tommcgiveron.com
By Thomas McGiveron, Licensed Real Estate Salesperson

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This is a foreclosure update for the Long Island real estate market. This report features the number of homes that are in the foreclosure process or currently bank-owned throughout a sample of the Long Island real estate market of of April 6, 2009. All statistics provided by RealtyTrac.

Suffolk County Foreclosures

1. West Islip = 73 (15.5% Increase since February, 09)
2. Deer Park = 161
3. Babylon = 39 (30% Increase)
4. West Babylon = 167
5. Lindenhurst = 176 (7% Decrease)
6. Patchogue = 10
7. Miller Place = 46
8. Riverhead = 4
9. Huntington = 94
10. Port Jeff = 16
11. Sayville = 27
12. East Hampton = 2
13. Smithtown = 5
14. Hauppauge = 25
15. Manorville = 35

Total = 875 (slight decrease in foreclosures from February, 2009)

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

A closer look at short sale listings in these same towns above indicates another challenge. According to the Multiple Listing Service of Long Island, there are 172 homes listed as short sales. A short sale is where a homeowner is attempting to sell their home for less than what is owed on the mortgage. A short sale occurs when the value of the property (what the buying market will pay for it) is lower than what a homeowner owes on the property.

These are potential homes that may hit the market in the future as foreclosures if they do not sell.

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/.

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For the past 3 years, we’ve heard about mortgage defaults and lots of people talking about the “subprime loan crisis” but Option ARM mortgage defaults will shortly become the unfortunate talk of the town. Option Adjustable Rate Mortgages are mortgages that reset after a specific time to a capped mortgage rate and they adjust with market pricing.
Watch the video to get a better insight into these and similiar loans.



Now if you watched the video, you’ll get a sense of doomsday. Others that I’ve talked to about the next wave of mortgage defaults and foreclosures say the government will solve the “problem” by mandating massive loan modifications and just buying more banks.
Let’s take a look at some information first before we say the government can solve the problem.

If you look closely, you’ll see that the subprime mortgage crisis is “behind us”, although we’re still feeling the pinch from this because many of those borrowers have their homes on the market as a short sale or have already foreclosed. However, looking forward, you’ll notice a gigantic increase beginning halfway through 2009 and through 2011, that Option ARM loans and Alt A loans will see their resets begin to occur. This means those homes (many are already behind on their mortgages) will see an increase of their mortgage payments (that they can’t afford now).
The amount of these loans that were written are astounding as well. Option ARM’s make up nearly 18% of every mortgage in America (that’s nearly 2 out of every 10 household). If that doesn’t make you scratch your head and say, “Hmm”, you’re either brain dead, simply really don’t understand (call me), or you don’t care. And to get to the point of the title of this article, while I don’t have statistical data as of yet, it’s a very well-known fact that “a ton” of these types of loans were written here on Long Island. That’s where a lot of people, made a lot of money.
When you think about 50% of these loans being unable to be paid, that’s alot of loans in default. And to touch on the point about the government “saving the ‘victimized’ people from losing their homes”, who’s to say that after the government “saves” them, that they’ll continue to pay the mortgage or maybe people who are paying their mortgage will scratch their head and say, “Why am I paying my mortgage when I can be ’saved’?”
And think about this - if the government helps people to restructure their loans, eliminate portions of outstanding balances, and extends loans to…100 year fixed, all that money that is tied up in these homes is essentially “dead money”. The value of these assets to banks will be minimal.
At the end of the day, the problem is, many of these people don’t belong in homes, they belong in apartments or their parent’s homes. It’s unfortunate that this has happened, but unlike some politicians, the “dream of homeownership” is not dead and will never be dead, it just means, you’ve got to save up, work hard and earn it, not lie on a mortgage application.
The problem is…I could go off on a tangent here about state, federal and local taxation, but that’s another story. What I will do is leave you with a unique comment by my uncle who I spoke with about my website.
My uncle recently told me he visited my website. He said to me, “Tom, why do you have all this ‘negative’ information on your website? Do you think that’s going to ‘get people to list’ with you?” My response was simple. I told him, as I’ll tell my readers, the purpose of these articles and the information is here because it’s what I hear and read, and I’m going to share it - straight up - with my customers, clients and casual website visitors.
The other thing I told my uncle was, “The message of my website is for homeowners who really want to sell and still take advantage of unprecedented real estate appreciation should call me immediately. Otherwise, watch their home values quite possibly drop back to 2003 levels and then ride it out over the next five to ten years. It’s their choice.”
Unprecedented Real Estate Appreciation - click there to get a feel for how “lucky” you still are as a Long Island homeowner who bought at or prior to Januar 1, 2000.

(c) Copyright, 2009 www.tommcgiveron.com
By Thomas McGiveron, Licensed Real Estate Salesperson 1-800-765-3123, Ext. 51

WWW.LISPENDENSBYTOWN.COM

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This is a foreclosure update for the Long Island real estate market. This report features the number of homes that are in the foreclosure process or currently bank-owned throughout a sample of the Long Island real estate market.

Suffolk County Foreclosures

West Islip = 63
Deer Park = 156
Babylon = 30
West Babylon = 173
Lindenhurst = 190
Patchogue = 16
Miller Place = 46
Riverhead = 5
Huntington = 91
Port Jeff = 20
Sayville = 27
East Hampton = 4
Smithtown = 5
Hauppauge = 29
Manorville = 36

Total = 891 (nearly a 7% decrease since last report in December, 2008)

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

All this information was gathered from RealtyTrac. The information is a combination of lis pendens filings with local county offices, public notices of foreclosure sales, and real estate owned properties (properties currently owned by banking institutions).

The average loss of equity from a foreclosure on Long Island is about $8000. So the fewer foreclosures in your area, the better!

A closer look at short sale listings in these same towns above indicates another challenge. According to the Multiple Listing Service of Long Island, there are over 250 homes listed that include the term “short sale” in the towns focused in this article. A short sale is where a homeowner is attempting to sell their home for less than what is owed on the mortgage. A short sale occurs when the value of the property (what the buying market will pay for it) is lower than what a homeowner owes on the property.


Towns from above with the most amount of short sale listings include Lindenhurst (31), and West Babylon (18). Now these short sales may or may not be legitimate opportunities. Consulting a Real Estate Agent who knows what they’re doing, can save a buyer time and effort. For sellers, the same can be said. Imagine trying to sell your home, having 50 or 60 people drudge through your home, only to find that a short sale is not a viable option!

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/.

(c) Copyright 2009, www.tommcgiveron.com
By Thomas McGiveron, LSA

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Long Island house prices are down 14.7 percent for 2008

I am going to take you through a lot of information in this article. The purpose of this article is to lay it all out for you in plain english and simple graphs. That 14.7% figure is directly from Multiple Listing Service data. It is Island-wide, not nation-wide.

Long Island foreclosures are rising.

How are foreclosures affecting the the Long Island real estate market? The foreclosures are setting the market value…because there’s so many of them!

Why would a buyer pay 335k when they can buy the same house for 280k?

This slide shows the difference between asking prices and sales prices. That $92,000 difference is directly being affected by the amount of foreclosures throughout each town.

So I am going to assume that some of you think your town isn’t effected by foreclosures.

I have written multiple articles about many towns throughout Long Island that have been effected by foreclosures. This is just a sample of towns throughout different areas. If you want numbers on your area specifically, call me or leave a comment.

So let’s talk about pricing.

If you’ve read my previous articles about house prices, you’ve heard about me talking about supply vs. demand and months of supply. With over 34,000 homes for sale and only 1,700 sales, that equals out to about 20 months of supply. That means it would take almost two years to sell off all the current homes for sale, without taking on any new homes to the market.

Feng shui not going to get you $40,000 more for the house. It’s all about pricing effectively to begin with. Marketing techniques and effective home enhancements help to seperate a home that shows poorly and a home that shows great.

So where are prices going and what does the future hold? The Case Shiller index is considered the best source for accurate real estate data. Robert Shiller is an American economist, academic, and best-selling author. He has been a research associate of the National Bureau of Economic Research (NBER) since 1980. He is the founder and chief economist of the investment management firm MacroMarkets LLC and is ranked among the top 100 economists of the world.

Again, one of the main items that supports this outlook is the months of supply.

If found this map to be an amazing snapshot at real hard facts. The good news, the map is 6 months old. And the Long Island portion of it is down now to 19.7 months according to the Multiple Listing Service of Long Island.

So if you are thinking of waiting until Spring…or next Spring…or next Spring (by the way that’s 2012), at the very least, I suggest you call me so that I might share more information with you about the market and talk about what value Coldwell Banker brings to the table in order to help a great agent like me sell your home in this tough market. I look forward to hearing from you (877-765-3123, ext. 51).

(c) Copyright 2009, www.tommcgiveron.com
By Thomas McGiveron, Licensed Salesperson

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Time and time again, I have people calling me or emailing me about foreclosed homes. I reply to alot of posts on trulia.com, where home buyers and sellers can ask questions about real estate and I find alot of people asking about foreclosures. So what’s all the hub-bub about anyhow? Are foreclosed homes a good buy or not?

I’ll provide an example. In Deer Park, there is a very nice colonial, priced at $319,000. It is a foreclosure, which means that it is bank-owned. Please note that a foreclosure is an “as-is” sale, where the bank is making no representations and is not going to do anything to rectify any problems with the property, whatsoever.

Now this nice colonial for $319,000 compares with other colonials in the area and they are priced in the upper $380,000 to $450,000. That’s a big difference.

But let’s take a closer look. This is where I like to really help potential buyers get the full picture. Now, at $319,000, this house, without getting into too many details, needs about $40,000 worth of work…that we can see. This doesn’t include any c/o (certificate of occupancy) issues or unseen problems with plumbing or heating systems.

If the asking price is $319,000 and we assume that we can purchase the property at $300,000, with the additional $40,000, plus another $15,000 just to be safe, this would put the total cost at $355,000. Since we assumed a $19,000 negotiable range on this foreclosure, lets apply that to a “normal” house for sale at $380,000. So a “normal” colonial, with only minor updates needed, would cost $361,000, assuming the negotiable price range of $19,000 (same as the foreclosure).

That’s a difference of $6000.

I am not trying to discourage any buyers from considering a foreclosure purchase. Not at all. However, the majority of foreclosure listings are still priced along with the rest of the market. When all is said and done, a foreclosure may not be any different from your average regular listing.

A number of issues should be understood by any buyer who considers purchasing a foreclosed property. Should you have any questions, please feel free to leave a comment or contact me directly at 631.831.9048.

(c) Copyright, 2009 www.tommcgiveron.com
By Thomas McGiveron, Licensed Salesperson

This is a foreclosure update for the Long Island real estate market. This report features the number of homes that are in the foreclosure process or currently bank-owned throughout a sample of the Long Island real estate market.

Suffolk County

West Islip = 70 Homes Pending Foreclosure - this represents over a 50% increase since the last report on Oct. 7, 2008.
Deer Park = 176 Homes Pending Foreclosure - a 165% increase since October, 2008.
Babylon = 34 Homes Pending Foreclosure (nearly 200% increase)
West Babylon = 188 Homes Pending Foreclosure (117% increase)
Lindenhurst = 193 Homes Pending Foreclosure (exactly 100 more foreclosures…in two months)
Patchogue = 17 Homes Pending Foreclosure
Miller Place = 47 Homes Pending Foreclosure
Riverhead = 3 Homes Pending Foreclosure
Huntington = 95 Homes Pending Foreclosure (nearly 100% increase since Oct. 2008)
Port Jeff = 21 Homes Pending Foreclosure (100% increase)
Sayville = 32 Homes Pending Foreclosure
East Hampton = 4 Homes Pending Foreclosure (300% increase)
Smithtown = 11 Homes Pending Foreclosure
Hauppauge = 26 Homes Pending Foreclosure
Manorville = 43 Homes Pending Foreclosure (over 144% increase)

Total = 960 Homes Pending Foreclosure (51% increase since last report in October, 2008)

Nassau County

Farmingdale = 34 Homes Pending Foreclosure
Seaford = 9 Homes Pending Foreclosure (125% increase)
Massapequa = 37 Homes Pending Foreclosure (8% decline)
Freeport = 56 Homes Pending Foreclosure
Wantagh = 10 Homes Pending Foreclosure
Lynbrook = 3 Homes Pending Foreclosure
Elmont = 47 Homes Pending Foreclosure
Oceanside = 6 Homes Pending Foreclosure

Total = 202 Homes Pending Foreclosure

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

It’s clear that Suffolk county had a tremendous surge in foreclosure filings. All this information was gathered from RealtyTrac. The information is a combination of lis pendens filings with local county offices, public notices of foreclosure sales, and real estate owned properties (properties currently owned by banking institutions).

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 increasing. A 50% increase in the number of foreclosures in less than 3 months.

Click the slide to enlarge it. These are some national numbers which seem to correlate with the Long Island real estate market.

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/.

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