Jul

20

Long Island Real Estate Market: What’s Next?

Filed Under Buyers, Sellers, Sellers & Buyers |


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So what’s next for the Long Island real estate market? That’s a great question. Do I have an answer? You bet! Let’s just take a look at what experts are saying.
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The Federal Housing Finance Agency was created to assist homeowners with information and updates overseeing the mortgage market in America. The FHFA report is about future pricing and this statement about the “trough” or bottom is very important. I find that many people mistakenly think the market is going to just “pick up”. No doubt it will start to go up again, but not like it did from 2002 through 2006! The “pick up” will be slow and steady, like throughout the history of real estate.
This point is so very important for homeowners to understand. Once we have reached a bottom, it’s going to take time for the market to recoupe what it has lost. I cannot stress this point enough.
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Fortune.com’s prediction as of 6/19/09, is right in line with the numbers on Long Island. The comment about some prognosticators saying 2013 is suspect. But in terms of a bottom, let’s just stop and think about something. I will be posting June’s numbers within a week or so. But let’s “ballpark” the numbers: 33,000 listings for sale and 1800 sales for the month of June. That adds up to over 20 months more of inventory that either has to sell or expire off the market and it doesn’t include future listings that will come to the market.
So right there we’ve got 20 more months of supply exceeding demand. It’s that simple. I would go as far to say that, locally, on Long Island, we’ve got about 2 more years of a downward trend in pricing (20% more decline in prices).
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Love’em or hate’em, the Mortgage Bankers Association does know the numbers. And we know that they know mortgage delinquencies because they’re the ones that got us here! Mortgage defaults are the shadow of the market that will either bust the back of the housing market and cause a 30% to 50% decline in home values or by some miraculous chain of events, the economy will turn around and people will be able to hold on through this tough time. One thing is for sure, mortgage delinquencies are high and they’re increasing every month.
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There is more talk about the market “leveling off” and “staying flat” for severals years to come. I don’t see the data that tells me this is going to happen. But it could be a “hang over” effect where interest rates go very high and thus discourage buyers from entering into the market and sellers from selling.
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I wanted to finish with this comment because it has a very key point to prove. The housing inventory must shrink. Now this is a “national” outlook, but Long Island and New York City will fall right in line with the rest of the nation, because, we are the “mecca” of the financial and housing market. As we go, so does the rest of the country, in general.
One of the key points to pay close attention to over the next 12 months is the New York City commercial real estate market. Because NYC and Long Island are lagging behind in terms of the total meltdown seen in Nevada, California and Florida, some say that we’ve got the worst yet to come.
I disagree with this mainly because New York City isn’t Nevada or those other states. It’s diverse economy, made up of thousands of different industries, fantastic moderate climate and diverse population make it much stronger than the likes of a Florida or Nevada.
All in all, the overall outlook isn’t what most sellers would like to hear. And for buyers, the time to buy now is so good and will continue to get better as time goes on (just watch those interest rates!). What’s next you ask? Twelve to twenty-four months of continued decline of home prices on Long Island. No doubt about it.

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



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  1. Long Island Real Estate Market | Tom McGiveron | Coldwell Banker Realtors on July 20, 2009 1:19 pm

    […] 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. […]