May

18

Long Island Distressed Inventory

Filed Under Buyers, Long Island Short Sales, Sellers | Comments Off

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Many buyers are holding off on purchasing a home for many different reasons. Could be due to gas prices increasing dramatically in the past few months. It could also be a result of just general concern about the economic times (i.e high unemployment, state budgets).

And the real estate professionals and the field in general keeps saying, “it’s a great time to buy”.

I think back in 2008, real estate people were saying the same thing, but that’s when the tax credit was available and rates had dropped significantly.

So is now the time to really buy?

The truth is, it’s really never a “bad time” to buy real estate or any investment, as long as you negotiate good terms and a good fair price at the time of purchase.

Real estate is a long-term investment. So buying a home anywhere within the decline curve (2008, 2009, 2010, 2011, ?) at extremely low interest rates, isn’t a “bad time” to buy.

However, if there was one piece of information out there that would have me raising an eyebrow (especially as a seller) it would be the shadow inventory numbers that New York (and specifically), Long Island is facing. Being one of the slowest states to foreclose on homes, Long Island has managed to produce a very sizable inventory of pent up distressed homes.

S&P Shadow Inventory Report

Long Island is “in the red”, when it comes to our shadow inventory.

What we’re faced with is over 120 months of distressed property. That’s 10 years.

Shadow inventory are homes that are not yet on the market for sale, but will be at some point. Of course not every home that is “distressed” currently is going to foreclose. However, the volume of Long Island homes that are (a) underwater (meaning a home is worth less than what is owed on the mortgage) and (b) owned by people who aren’t paying their mortgage, is astronomical.

States like California and Nevada have worked through a large portion of this inventory, expediting foreclosures, short sales and getting new owners on these properties, thus getting rid of all the distressed homes.

The terms “months of supply” simply means the amount of months, at the current pace of sales, it would take to sell all of this inventory.

10 years.

For buyers now, this may be something I would want to keep an eye on. Will prices drop another 30%? Most indications are they will not, however, this distressed real estate market could drag on the real estate values on Long Island for the next 2 to 3 years.

I’m just providing information. I do have an opinion and it’s this: don’t over-analyze your future home needs. I put my money where my mouth is and I purchased my personal residence in the last 2 years. It’s a great time to buy. But don’t plan on selling in the next 3 years. That would make no sense.

If your plan is to buy and live in your home for 5 to 8 years, then don’t hesitate. Stop waiting. Move on from the paralysis of analysis you find yourself in now. If you have solid employment, good credit and can afford a home, buy one. That’s my opinion.

Bottom Line

The purpose of this article (and my others) is to just provide information so you have it. I always like to keep things straight between me and my readers. Will Long Island have a foreclosure mess on its hands in the future? From information like this, it certainly looks that way. Should that prevent you from buying a home (or one of these troubled homes)? Absolutely not.

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Jan

11

Foreclosure VOIDance?

Filed Under Buyers, Foreclosure Info, Long Island Short Sales, Sellers, Sellers & Buyers | Comments Off

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A court in Massachusetts voided two bank foreclosures this past Friday. The decision has already created a ripple effect across the banking community. Will other courts also decide to void local foreclosures? Does this put an added burden on banks when they are trying to complete a foreclosure process? What will it mean to the real estate market? Let’s take a look.
What actually happened?

Though the challenges addressed yesterday might have been brought to light by the robo-signing mess, that situation was not involved in this ruling. The question addressed here was much deeper than someone not checking paperwork. The question was whether the bank could prove they owned the mortgages they were foreclosing on.

There are set legal procedures that must be taken to transfer a mortgage from one person/entity to another. It seems that these requirements were not fulfilled by many banks over the last several years when mortgages were transferred quickly and often.

The court decided that, since proper procedures were not followed, there was no legal transfer of the mortgage to the new bank. If the new bank didn’t legally own the loan, they had no right to foreclose on it.
What does that mean to other foreclosures?

That’s the million dollar question! No one knows for sure. Will every foreclosure be voided? No. Will many? That depends on how the courts rule and how the banks react.

Bloomberg reported:

Joshua Rosner, an analyst at the New York-based research firm Graham Fisher & Co., called the decision “a landmark ruling” showing that at least in Massachusetts a mortgage “must name the assignee to be valid.”

“This is likely to open the floodgates to more suits in Massachusetts and strengthens cases in other states,” Rosner said…

Although the decision was issued by a Massachusetts state court, it will be used by homeowners in foreclosure cases in other states, said Matthew Weidner, a St. Petersburg, Florida, lawyer who represents such homeowners.

“This is a very detailed, very specific indictment of an entire industry’s practices and procedures, and it’s an indictment that is going to send shockwaves throughout the entire mortgage, foreclosure, real-estate servicing industry,” he said.

Couldn’t this cost banks millions of dollars to correct?

Actually, it could cost billions. Market Watch reported:

Bank stocks fell sharply Friday as the highest court in Massachusetts reportedly ruled that two foreclosures were invalid because banks didn’t show they owned the mortgages.

The decision is the latest setback for banks after some lenders halted foreclosures in 2010 following claims they didn’t have proper documentation.

… “These cases fall generally into the class of mortgages where origination paperwork was mishandled or poorly documented,” Mitchell said, estimating that U.S. banks face between $80 billion and $120 billion of potential liability.

What does this mean to real estate?

If you are in the market to buy or sell, realize that the inventory of foreclosed properties that had been scheduled to hit the market in the first half of 2011 may be delayed. The New York Times reported:

An array of federal and state investigations into the way banks foreclose on delinquent homeowners has contributed to a sharp slowdown in foreclosures across the country…

The pace of foreclosures could be curtailed further by courts. In a closely watched case, the highest court in Massachusetts invalidated two foreclosures in that state on Friday…

If the slowdown continued through this month and into the spring, it could be a boost for the economy. Reducing foreclosures in a meaningful way would act to stabilize the housing market, real estate experts say.

Bottom Line

If you are in the foreclosure process and think your rights have been impaired in any way, you should perhaps get legal counsel.

If you are thinking of selling, this has increased the window of opportunity you have to sell before this ‘discounted’ inventory comes to market.

If you are buying, prices may not soften any further to later in the year. Many are predicting that interest rates will rise as we go through the year. If you are thinking of buying in the next six months, now might be an opportune time.

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Jun

12

Shadow Inventory of Real Estate: And How It Will Impact Long Island Home Values

Filed Under Long Island Short Sales, Sellers | Comments Off

These video’s and slide pictures and graphs below feature information on the shadow inventory and how Long Island home values will be impacted. I hope this information about the real estate market helps you to determine what course of action to take if you’re considering putting your home on the market now.

Part I Shadow Inventory

Morgan Stanley Real Estate Market Analysis

Shadow Inventory of Real Estate

Part II Shadow Inventory

Bank Foreclosure Shadow Inventory
This slide below reflects how much the banks are holding back. The banks have millions of homes to sell.

Shadow Inventory for banks

I want to point out that every time I talk about foreclosures, there is a story behind that home. If you’re behind on your mortgage, I urge you to contact me so we can discuss your options and as always, if you’ve watched this video and you want to talk about putting your home up for sale or purchasing a home, you can call me immediately at 631-831-9048.

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May

22

Challenges to Getting a Short Sale Done

Filed Under Long Island Short Sales, Sellers | Comments Off

If you are struggling right now with paying your mortgage, you may be wondering what challenges exist when trying to get a short sale done in order to avoid foreclosure. Among many things, you of course may be in disbelief that this is happening to you and you may also be worried about things like where you’re going to live once you have to move out.

All things like this are tough to think about and I have spoken to enough homeowners, young and old, that have poured their feelings out to me over their situation. One thing I want to make clear though is, this challenge in your life is not just going away.

When I meet with homeowners who have lost their home to foreclosure (after the bank has foreclosed and the homeowners become “occupants”, no owners), I always ask them why they didn’t consider a short sale, even as a last resort. Almost all say that they just thought the problem would go away or that somehow, things would change.

When homeowners call me to discuss negotiating a short sale with their lender, I try to be the voice of sound mind. I try to present the facts and stick to them.

One of the facts about negotiating with your lender to sell your home for less than what you owe on the mortgage is, putting the package together. There are many challenges to getting a short sale done. And here’s the thing about that.

It’s tough enough for families to experience the scenario of losing their home. The last thing you want is to hire a real estate agent and an attorney who do not know what they’re doing when it comes to completing a short sale. They may sound very nice and listen very intently. The agent might even offer very kind words of encouragement and offer a warm smile.

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Mar

13

Short Sales And Why A Buyer Agent Is Necessary

Filed Under Buyers, Long Island Short Sales | Comments Off

In this article I will discuss short sales and why a buyer agent is necessary. For any transaction, as a Buyer’s Agent I am responsible for drawing up a purchase binder, presenting the offer effectively, and prompting acceptance of a good offer. With short sales, there’s more to a buyer’s agent than just these basic qualities.

First of all, as your buyers agent, I will be helping you sift through listings, separating the good opportunities from the “time-wasters”. Many buyers I speak with do a lot of research on their own on websites like zillow.com or other general real estate informational website, but zillow cannot examine a short sale listing and determine if it’s a good deal or not.

And there’s something to be said about the fact that the price, in certain respects, has very little to do with whether a short sale is a “good deal” or not.

What do I mean by that? Well just because a home is listed as a short sale and is priced a lot less than surrounding homes in the area, that doesn’t mean it’s a good deal. How is that possible?

There is such a thing where a real estate agent could list a home too low and actually jeopardize the entire transaction. How so?

A short sale is not a give away. The sellers bank will order an appraisal and a broker price opinion. These are reports which analyze the value of property. A seller who is trying to sell their property for less than what they owe puts the bank in a curious situation. The bank must determine that the sale is legitimate.

When agents price a short sale listing too low, what will happen is the buyers will spend a lot of time waiting for the bank to make a decision, while all along, the deal has no chance of going through because the asking price of the home was too low to begin with.

Result? Rejection! And start over from scratch.

You don’t want to be in this situation and that’s where an expert in short sales can make the difference.

In order for a short sale to have wings and fly, you also have to know what values are in the area. Come in too high with your offering price and your appraisal could come in short. On the flip side, come in too low and you’ll spend all that time waiting for the bank response, only to be disappointed at the result when the seller’s bank rejects your offer or counters too high.

And you can’t get current comparables to know where a property’s value stands on zillow or some other outdated, out-of-area national website. A good local real estate agent who understands values in a given area is necessary.

Better yet, having a buyers agent who completes broker price opinions (BPO’s), like myself, be there guiding you on what short sales are good ones and which aren’t and how much to offer exactly, will ultimately make the process of buying a short sale, much more efficient than going out there on your own, being left to make mistake after mistake.

Should you have any questions, please do not hesitate to contact me at 631-831-9048. If you are behind on your mortgage and have questions about your options to avoid foreclosure, you can email me here.

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keep looking »

May

18

Long Island Distressed Inventory

Jan

11

Foreclosure VOIDance?

Jun

12

Shadow Inventory of Real Estate: And How It Will Impact Long Island Home Values

May

22

Challenges to Getting a Short Sale Done

Mar

13

Short Sales And Why A Buyer Agent Is Necessary

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