The Long Island real estate market in May 2010 numbers are out and I am still waiting on June numbers to be released. With all the commentary about what happened to prices in the market, I think many homeowners are confused as to where the market is and where it is going.

For the purposes of this article, I’m going to look at one thing that tells the story of the entire market. It’s not prices per se, but inventory. I’m going to give you a statistic here that’s kind of scary if you understand it and appreciate it.

The standard of keeping track of statistics mostly centers around comparing one month or quarter to the years previous. So for instance, I’m going to give you May 2009 numbers of homes available vs. homes sold and then I’ll give you May 2010 numbers.

May 2009

Now I’ll provide May 2010 numbers for homes sold vs. homes available.

Now from these two time periods you’ll see that the only major difference is the homes sold were higher in May 2010. The available homes (inventory) appears to be just about the same with some slight variation.

But the real key to stat to look at is, if we just go back three months to February 2010.

Here we see some major changes to the market. Over 12,000 homes were added to the available market from February to May of 2010. That’s a gigantic leap of more than 25%.

That means, in general, in your area, if you had your home on the market in February and didn’t sell it and were still on the market in May, if there were 75 homes for sale in your area in February, there were nearly 100 homes for sale by May. Thus you were competing against 25 new homes for sale in your area. This gives buyers more options and when supply exceeds demand (as it does in all of these slides - there’s a lot less homes being bought then are listed for sale) that means one thing - prices must adjust downward!

This is the reality of our market. I continually go back to this statistic because it tells the story of what exactly is going on in the Long Island real estate market. Prices of SOLD HOMES may have risen during the month of May, as it was reported, but that could be attributed to many factors such as maybe the high end market sold more, thus throwing off the numbers (which is what many local experts are saying).

One thing is for sure, unfortunately for sellers, home values on Long Island are not going up. They are stagnant or declining slightly. One reason for the prices not dropping more rapidly has to do with the low mortgage interest rates.

It takes unique marketing strategies and cutting edge technology to sell homes in this market. That along with current and valuable real estate analysis will go a long way toward helping you sell your home in this very challenging market.

If you want expert analysis of your home’s value and want to discuss my comprehensive online marketing plans, please contact me at 631-831-9048.

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I recently had a conversation with a potential buyer who asked me if now was a good time to buy a home. I sighed and proceeded to review with him the current real estate market conditions and the basic formula for wise investment.

Do you know the basic principle of investing? I’m sure you do if you stop and think about it.

Okay so it’s Buy low, sell high. Great. Easy four word phrase: Buy low, sell high. So let’s see, the Long Island real estate market is down nearly 40% from peak. Is that low enough?

Forget about that for one second and take this into account; the mortgage interest rate is under 5%…still! It’s like this gigantic carrot hanging out there, but potential buyers aren’t reaching for it and if they are, somewhere in the back of their heads, they’re thinking (or perhaps you’re thinking) not yet. It’s still not a good enough time to buy.

Take this theory into account:

What goes down, will eventually go up. When something hits the bottom, it normally doesn’t stay there indefinitely. The mortgage interest rate has no where left to go. It can’t go any lower.

But it could jump up one whole point in less than a month. Right now the rate is low.

I just helped a client buy his first home. He and his family will benefit from a low 4.875% rate for as long as they live in their home, up to 30 years. Think about that for a second. He will be able to deduct his mortgage interest from his taxes and he will benefit from the investment of real estate in a down market where he took the plunge and in his words, “…did the best thing for my family.”

The combination of my professional services and his willingness to listen and follow the my instructions of capitalizing on the mortgage interest rates of our lifetimes, has him in a new home at a great price and a mortgage payment that he can afford.

One of the greatest things to consider from this market is your buying power. Not every agent is going to cover this in their discussions with buyers, but I make sure I cover it with all of them. With rates so low, it’s always wise to remember that your dollar goes a lot further when rates are low. So instead of being able to buy a 3 bedroom/1 bath home, you can probably afford 4 bedrooms, 2 baths and a full basement with a garage!

If you’ve got questions about the rates and about homes for sale and how I can help you make the dream of home ownership a reality, call me today (631)831-9048.

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Mortgage rates remain low after The federal government stops purchases of mortgage backed securities and you might want to ask me why I was wrong about that. I listened to the experts in the industry who said the rates would go up. But this video explains why and the graph below is a direct quote about the markets.

Should you have any questions about this or any other topic related to real estate, please feel free to contact me at 631-831-9048.
By Thomas McGiveron, LSA

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I don’t know about you, but I’m starting to get a little offended at what’s happened to Long Island in the last few years…as a Long Islander of course. I’ve decided to take “the battle” to the streets and created the Long Island Real Estate Market Fan Page on Facebook to start making Long Island great again!

Okay - What’s Facebook?

Now I’m sure if you’re on the internet more than one time in your life, you’ve heard of the website facebook.com. It is the “cleaner” version of myspace.com, and by that I mean, it’s just less advertisements and more connecting with friends, family and more importantly, topics of interest and information.

When I first learned about facebook, I only saw it for one thing, connecting online with…whomever. The more I learn about facebook, the more I see it’s a place to find any kind of information, company, service, product…just anything you can think of. It’s the social “google” if you will.

It’s All About Long Island…

Rather than type into a boring search engine, I can connect locally with a company or a local expert. And that is why I’ve decided to create the Long Island Real Estate Fan Page.

The more I can share with you and vise versa, about this great place to live, the better off we all are, as we educate people on how great it is to live on Long Island (despite high taxes!). And a note about those high taxes, I say it’s like anything else; You get what you pay for! If you want to live where the taxes are $600.00 a year, well then knock yourself out. I did and let me tell you, there’s no comparison! I’d rather pay $6,000 a year or more and live in the best place in the country.

From the climate, to the location to New York City, to the convenience of the ocean and magnificent waterways…Long Island is just a great place to live.

And when this economic “ice age” settles and we survive past 2012 (Nostradamus and Mayans eat your heart out!), Long Island will thrive!

Do we need government officials who believe in spending less and lowering taxes - you better believe it, but let’s get there one fan at a time. I urge you to join me on the Long Island Real Estate Market fan page.

One of the best things about the facebook platform is, the news and information is there when you want it. It’s not like receiving e-newsletters you don’t want or commercials you don’t want to see on Television. If you become a fan and bounce around on there once in a while, for any topic or fan page, it’s so easy and it’s free.

If you’ve read my web articles or gone through my websites, you know that I post pertinent information that can be valuable to the person who’s interested in real estate. That’s what I will be posting on the Long Island Real Estate Market fan page.

I’m also going to be posting things on there from all over the internet. I hope you do as well.

If you’ve got a cause you believe in and it’s local and important, bring it on and share it on Long Island Real Estate Market on facebook.

Again, that’s what’s so powerful about the facebook environment. It’s a community sharing local information from local people.

Now is this a “revolution” on the fan page…Yes it is!

We’ve got to come together and start making it clear that Long Island is better than Tennessee, Georgia, Utah, Colorado, etc. People are leaving here - young people - and we’ve got to help our community grow with youthfulness, not perish with age. That’s what this fan page is all about. I’ve posted the link enough. Just join and let’s start making Long Island great again!
(c) Copyright 2010 www.tommcgiveron.com
By Thomas McGiveron, LSA
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So you’re wondering what’s going to happen to mortgage rates. If you’re a buyer, you’re wondering that because you are trying to figure out how much the cost will rise for your monthly payment. If you’re a seller, you’re thinking about a lot of things and saying to yourself, “I should have sold 3 years ago”. But I digress.

When we look at information available to us, we see that mortgage rates are going to rise and we wonder, how that might impact the Long Island real estate market. Well just like any other market, when rates rise and demand remains lower than supply, prices must drop in order for someone to sell their home.

But let’s really look at the added costs of an increased mortgage rate.

Now this graph is packed with a lot of different information about mortgage rates.

The Impact On Buyers
Well first thing you must realize is that in order for you to buy a home and pay about the same price per month for that home as the rate goes up, you’ll notice that the price of the loan must go down significantly. Let’s say you’ve been looking for a while and you see a few houses or one in particular that you love. But for some reason, you’ve held back for reasons such as…well to put it bluntly, fear.

Let’s face it, this economy has many people a little uneasy about the future. So you hold back for whatever reason, you want to wait until you get married, you need to “save more for the down payment”, prices are still too high, taxes are too much, the dining room is too small, and on and on.

Well look at that graph and ask yourself this: Do you honestly believe that this house you’ve seen or these few houses that are “potentials” will be there 10% from now? What I’m saying you to ask yourself is, will this same house or houses be on the market for sale 5 months from now when rates are quite possibly 1 full percent higher than they are now? Maybe. But more than likely, if you’ve got your eye on a nice house that you really like or love, chances are so does someone else. And if they’re a little less afraid than you, guess what, they’re buying it.

Another thing for buyers to look at is simply the savings. Paying 6% on a loan as opposed to paying 5% on a mortgage rate is a no brainer. You will save more money. And again, this graph is based on prices dropping as the rate goes up. Just because the rates goes up, doesn’t mean that the home(s) you like has to sell (or can sell for that matter - given the likelihood that they have a mortgage to pay off).

The Impact On Sellers
The cold harsh reality of the market is that prices are going to continue to see-saw in a downward spiral. Every economic and real estate expert out there predict a further decline in prices. Here on Long Island, the simple curve of supply exceeding demand will absolutely keep prices from appreciating for the near future (6 to 18 months).

With the flow of homes off and back on the market and increases in foreclosures, this extra supply, as it comes in waves, will continue to keep prices from going up.

Now this graph adds an element that is not seller-friendly. Historically, a 6% mortgage rate is incredibly good. However, given the current economic situation, decreased consumer spending and high unemployment (currently over 7% on Long Island), a 6% rate might as well be 8 or 9% in a “normal economy”.

Buyers on Long Island, with the high taxes and cost of living that exceeds about 90% of the rest of the country, living here isn’t cheap and many buyers don’t have $80,000 to buy a modestly priced home of $300,000. Remember, the standard, “good loan” for a home is 20% down (on $300,000 that’s $60,000) and the other $20,000 is for the very high closing costs associated with buying on Long Island.

So looking at the graph, as the mortgage rate goes up, if you need to sell, you will absolutely be forced to drop your price as the rate goes up. There is no question about this. Why? Because the buying market won’t have buyers to purchase your home at a 6% mortgage rate at the current prices of today (April 2010). And please note, that I’m not even mentioning the home buyer tax credit that is expiring in 2 weeks that’s helping home values remain somewhat stable. Without that, prices will drop.

But there’s definitely hope in that if you hire the right agent, who uses cutting edge technology to market your home, buyers will check out your home more often than just having it sit idle on mls, overpriced. Oh by the way, that “right agent” - that’s me - click here and let’s get started!

So What About The Mortgage Rate Anyway?

Let’s look at what experts are saying.

From Moody’s Economy.com to Credit Suisse to Barclay’s Capital, we see that the experts are predicting increased mortgage rates. Why? Read my article on what’s happened in the last month with the Fed.

National speaker and residential real estate guru, Steve Harney, talks about how since 2006, April to July months have seen mortgage rate volatility.

So to close this discussion out, I think it’s particularly important for buyers and sellers to consider their options. Information like this is invaluable and I hope it helps you make the best decisions for you and your families. If you have any questions at all, I can always be reached at (631)831-9048.

By the way, if you missed the commission discount I’m offering for home sellers, please click here.

(c) Copyright, 2010 www.tommcgiveron.com
By Thomas McGiveron, Licensed Real Estate Salesperson
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If there was a bar called Mortgage Interest Rates Place, right about now, the lights would be getting turned on and it would be last call.

The Fed did what they set out to do - purchasing $1.25 Trillion in Mortgage Backed Securities, and succeeding in their plan to lower home loan rates and help stabilize the housing sector. And even though they stretched out the length of the program slightly - in order to soften the impact of the end of the program - the training wheels are now off, the safety net is gone, and home loan rates have already moved higher.

In fact - as the Fed will now gradually become a seller of their massive holdings of Mortgage Backed Securities - rates are very likely to continue to move higher.

Even after home loan rates took a jump higher last week, they still remain at reasonably low levels - which makes right now a crucial time to take advantage of the opportunities that exist, including the Homebuyers Tax Credit which is down to its last month.

To take advantage of the generous credit, purchase contracts must be signed by the end of April. If you or someone you know has questions about this credit - please don’t wait to get in touch with me.

I know that people, much like myself, are still trying to figure out facebook. The more I visit the website, I learn how to use it more effectively. The information on that website is just incredible. Whatever you’re looking for in terms of information, you can pretty much find on facebook.

What people do is they create profiles and their friends can see their quotes or information or articles they post on the website. There are also pictures you can upload, games you can play and the advertising is very conveniently on the left hand side and there isn’t too much of it so it’s great in that regard. There’s no annoying ads that pop up.

Now I want to advertise my facebook profile in this post because I see that it makes for a very easy way for any of the buyers or sellers I work with, to get information I find on the internet about mortgage rates, housing inventory on Long Island, updates to the financial markets that impact housing, and on and on.

This way, if you join me on facebook, you’ll be able to simply visit my profile and get this information whenever you want. And it’s really good information that I don’t post on my website. This is information on other websites that I share on my profile page.

As an example, I just posted something titled, Interest Rate Forecasting in a Volatile Market, written by Dean Hartman, Chief Planning Officer of a major local Mortgage Bank. It’s on my profile and it’s a very good read about mortgage rates.

Now if you’re a buyer, I’m just recommending that you sign up for my email newsletter and join me on facebook. To me, it just makes sense because I honestly work hard to provide current information on the market that will help you through the buying process. And if you’re a seller, it’s the same reason, only the information will help you price your home right or decide whether selling is right for you or not.

My facebook profile is just a platform to acquire free information from various sources. I also started using it more with family and friends (when I started my profile I only used it for professional reasons, but finding some old friends from college and even grade school has been very interesting, I must admit).

So please, consider joining me on facebook and I look forward to providing you useful information about the Long Island real estate market.

I want to leave you with something that one of my seller clients said to me recently, which gave me the idea to promote my facebook profile more. He said, “I joined your facebook and I read the article from Long Island Business News and I would have never seen that anywhere else because it’s just not something I look for, but on your facebook, I then started reading about the real estate market, it’s great.”

Well that’s all I needed to hear. Sometimes a website is just too much. My facebook profile is simple and I can put a lot of resources on there from other sites. So it’s a whole lot in one place.

I look forward to having you as a friend on facebook!

Years from now, we will all look back at this time in history and say, “Remember when mortgage interest rates were below 6%?”. And I said it, yes ‘below 6%’. The luxury of thinking that 6% is a high interest rate will be gone soon enough. And believe me, I wish this party could last forever. But there’s specific reasons the rate has been so low and if you haven’t read about those reasons, click here.

Unfortunately, it’s coming time for the federal government to make some tough choices. Those choices include pulling out of the Mortgage Backed Securities (MBS) market as planned.

With this pull out, there are multiple repurcussions. In order to better understand what happened just yesterday to the market and what’s going to happen, check out Morgage News Daily’s article about the mortgage interest rates.

Without getting too technical, please keep in mind that demand for something will keep prices high. When demand falls for something - the value of that something must go down in price. This is basic economics.

In order to assist you in reading that article at Mortgage News Daily, skipping to the bottom and reading the last paragraphs will put things in perspective. Now without having to understand the dynamics, all you need to know, as a home buyer or seller, is that when Treasury yields go up and bond selling increases, this causes mortgage interest rates to rise.

We’ll have to take a wait and see approach (as always) but it just seems like this recession and this “looming” feeling of the unknown has been going on for so long. That’s just my opinion. One thing is for sure, if you’re a home buyer (and I feel redundant in saying this), the mortgage interest rates are low now…don’t wait anymore!

Call me and lets get started on an aggressive home search campaign - 631-831-9048.

(c) Copyright 2010 www.tommcgiveron.com
By Thomas McGiveron, LSA

This video article is going to showcase foreclosure information on Long Island, specifically foreclosure shadow inventory. Some previous articles that may help you understand what’s in this newest article are A Closer Look At The Impact Of Foreclosures In 2010 and How Many Homes Are In Foreclosure In Suffolk County.

This video is going to talk specifically about why it is a good time to sell your home if you’re considering making a move, despite the down market. The foreclosure shadow inventory (foreclosed homes that are yet to hit the market) is going to be staggering in 2010 and as we move into 2011.

(c) Copyright 2010 www.tommcgiveron.com
By Thomas McGiveron, LSA

In this past week’s edition of the Long Island Business News (LIBN), there was an article entitled “Builders unprepared for stiffer lead paint regulations” by Michael H. Samuels. The article featured some key insights about continued and increased stressors placed on an already burdened industry - real estate construction and our world in general.

I’m going to start by bulleting a few points from the article. Then I’m going to give my opinion about the overall picture that it paints. For the record, I’m one of those “wackos” that believe the Federal government should spend less time in two places - our lives and our pockets.

So here’s some points the article made:

1. New Federal Regulations (what else is new) requiring contractors to follow guidelines while doing renovations where lead paint is present.
2. The Environmental Protection Agency ordered these rules (micro management of our lives at the “orders” of an overly funded Bureaucracy attempting to “protect” the “innocent victims” of our society…aka destroy as much commerce as possible and put as many businesses and people out of work so they don’t catch a cold, scrape a finger or…have the ability to feed their family - yes that’s right - I said it!). You can click here to read what the EPA says about lead paint.
3. In adults, lead paint can cause miscarriages, hypertension and digestive problems according to the EPA.
4. There were guidelines in place that contractors use anyway when dealing with renovations involving lead paint - another words, when you rehab a home that was built before 1978 (homes built before 1978 stand a very good chance of having lead paint on the walls of the home) the workers wear protective masks and goggles - simple.
5. It’s estimated that 80 million homes throughout the United States have lead paint in them
6. Lead paint was outlawed in 1978.
7. New regulations go into effect as of April 22, 2010 and require all workers at a work site to be certified at a cost of $225 per person to take a class.
8. High Efficiency Particulate Air Vacuum Cleaners must be used, built by HEPA manufacturers, which can’t keep up with demand…meaning there are contractors out there, that are certified but can’t get one of these “High Efficiency” Particulate Air Vacuums.
9. There aren’t enough trainings available to accomodate all the 235,000 or more firms affected by these rules of this federal bureaucracy
10. As of April 22nd, 2010, the EPA can begin fining contractors $37,500 per incident.

Okay so let’s get right to what I think because that’s what’s most important to me:

1. I believe the EPA should make recommendations…not requirements (especially in the midst of a financial meltdown of our country) on any state and for that matter I believe no federal agency should make a requirement upon any state whatsoever. Let the individual states decide on anything that impacts it financially or has any affect on the liberties of its residents. Period.

2. I do understand the need for any government to implement rules to protect people from environmental hazards like lead paint and give businesses guidelines to help it protect their staff, but I strongly disagree that a federal agency should have the right to implement rules against states, their companies and their workers that reside there.

3. The big picture isn’t that there shouldn’t be regulations to help businesses protect their workers and the general public, but to have this insanity imposed against an industry with a deadline right smack dab in the midst of a financial crisis where unemployment is over 17% (the real number - and on Long Island it’s over 7%) and to boot, not have enough trainings offered around the country to accomodate workers and also have manufactures unable to produce the “necessary” (mandatory) equipment to meet demand…….is insane.

4. People need to feed their families. Businesses need to be able to operate so that workers can have a job. The trickle down effect of businesses not being able to make a profit will lead to this republic’s demise. And specifically if construction contractors can’t work because of some stupid machine they can’t get and or their employees can’t get trained, then people can’t feed their families! This is dangerous territory.

5. We need people in our governmental offices that have common sense. Period. These regulations are just another example of a government imposing restrictions and adding cost burdens on businesses at a time when the impact can and probably will be financially crushing to families. Read it.

I’m just at a loss. I read articles like this all the time and I get sick to my stomach. We need jobs. People are hurting and we’ve got towns like Hempstead that have hurt job creation by blocking Charles Wang from developing that hell hole surrounding the embarrassing Nassau Coliseum. That’s just another example of local government being infiltrated by bureaucrats who think like the idiots on C-SPAN (yes - US Congressman and Senators).

People need to work. Period. Businesses need less regulation and less taxes so they can hire more people so that these people can work. I tell you what - go ask someone who’s unemployed right now and has a family to feed. You ask them if the EPA is helping them put food on their child’s plate. You ask them if they think the EPA should impose these demands on a hurting industry or whether he or she would be willing to just throw on a mask and goggles and work on a home their boss has financed so their business can make a profit and the workers can get paid.

Go ahead, ask them. In about a month (April 22nd - the $37,500 per day fine starts), they’ll be plenty of unemployed construction workers…but at least they won’t be “at risk” of lead-paint-related illnesses…they’ll just lose their home and not be able to feed their family. Yeah…that’s what they want.

(c) Copyright, 2010 www.tommcgiveron.com

By Thomas McGiveron, LSA

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