Feb

3

Long Island Real Estate Market: Home Depreciation

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In my previous article, Home Pricing Update, January 2009, I commented on depreciation and how Long Island would be affected by the high months of supply. I wanted to revisit the slides for a closer look at the number one, most important aspect of the real estate market.

seller-double-digit-map-li.JPG

This slide shows the breakdown of the months of supply in Long Island and down state area of New York. Between Queens, Nassau and Suffolk counties, the months of supply is over 15.

But what does this mean? The months of supply is simply the amount of months it would take for every listing to sell at the current rate of home sales. Nationally, it has been reported that December saw a spike in home sales. On Long Island, a “spike” might mean 50 more homes were sold in the month of December than November.

While every bit helps, that’s what represents the small improvements that will eventually help the Long Island real estate market stabalize. As the supply of homes decreases and the demand remains steady, the depreciation of homes will cease and correct back to a modest appreciative value.

When I sit with homeowners, these are the statistics I share with them.

seller-double-digit-dep.JPG

As you can see, a 9+ months of supply in any given area, automatically equates to double-digit depreciation. Combining this slide with the map of the Long Island area clearly indicates that 2009 and into 2010, Long Island home values will continue to decline.

Click here for a free comprehensive market analysis of your home or feel free to call me at 631.831.9048.

(c) Copyright 2009, www.tommcgiveron.com

by Thomas McGiveron, Licensed Salesperson



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