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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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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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.
(more…)

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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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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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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First I want to say this, this is not a doom and gloom article about what’s going to happen to the market. This is information from leading experts and sources that look beyond the headline. It’s information for homeowners to view so they can be educated about what’s happening to Long Island home values.

I’d like to start by saying, from my own personal experience during the last few months, things were very “hot” during the months of April and May. From my phone logs and email contacts and showing activity on my listings, June had a cooling effect where activity from buyers seemed to decline. The June numbers will be out soon and I will be posting them here when they come out.

Here’s what the experts are saying about home values in general. First, this website link - http://www.npr.org/templates/story/story.php?storyId=111494514 - will take you to information broken down by county on foreclosures. Nassau and Suffolk counties are among the highest in the nation for foreclosure and distressed property activity. And remember, foreclosures bring down home values. So this is really point one, Long Island home values will suffer a drag from increased foreclosure and distressed property sales.

This next slide is from Case/Schiller and gives us a look at overall future home prices.

The dip in values to a bottom in May 2011 is a projected bottom, but what’s more significant is the time it’s going to take to get back to current values in 2010! By November 2013, according to Case/Schiller (experts in the field of real estate), we will be back to 2010 values…not 2005 values.

One thing this chart doesn’t take into account is mortgage interest rates and how they’ll impact home values. With the rate so low, buyer activity hasn’t fallen off a cliff. And on Long Island, with high taxes and still relatively high home prices, mortgage rates must remain low in order to keep Long Island home values stable.

A very interesting web link to check out is http://www.forbes.com/2010/06/04/migration-moving-wealthy-interactive-counties-map.html?preload=36103. Now we’ve all heard about the “brain drain” from Long Island and if you haven’t, it has to do with the youth on Long Island (people over 18 through 30) leaving Long Island to live in more affordable areas of the country.

When you bring up this link, allow the interactive map to load then click on Long Island. Red lines represent movement from an area and black lines represent movement to an area. What I noticed right away was that there weren’t too many black lines leading to Nassau and Suffolk county, but red lines (moving away) cover the map!

What does this have to do with Long Island home values? If there isn’t a high demand for people to move here, the buyer pool shrinks or remains stagnant. This is, in my opinion, Long Island’s great challenge - to keep people here and to entice more out of towners to move here! Now combine this “brain drain” with increased mortgage interest rates and what you have is a buyer pool that will not be able to purchase homes because they won’t be able to afford them…unless home sellers…drop their prices. This is clearly something home sellers want to avoid.

Housing analysts have recently grown gloomier about the outlook for home prices as sales slump, with a survey released by MacroMarkets LLC finding that 56% of 106 economists and analysts surveyed expecting home prices to decline this year, up from 40% a month ago.

With a growing number of experts in the field calling for further declines in prices, I’m one to say that if you’re thinking of selling your home, further delay may only hurt your chances of capitalizing on what’s left of home values on Long Island. And with mortgage rates so low, buyers are out there looking. They’re just waiting for the right house to buy.

Feel free to call me to schedule an appointment - (631) 831-9048.

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Part I Shadow Inventory

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.

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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Part II

Part III

My cell phone is 631-831-9048.

By Thomas McGiveron, LSA

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I want to preface this two words, “Buyer Beware”.

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