Long Island Real Estate Market

I'm going to make this short and sweet because I'm busy making money.  While I appreciate the opportunity to have exposure on activerain for free and while I appreciate with their search engine rank help with my websites, I have to complain (of course) about their unwillingness to feature blog posts.

My last blog post entitled How many People Do You KNow That Have Lost Their Job In Past Few Months, has about 5 comments. 

In my humble opinion, I think it has great potential to get alot of replies if Activerain featured it because the unemployment rate is going to be front and center during the next year or two.  It is going to impact the real estate market directly in an alarming manner.

Please visit the post.  I kept it short and sweet, basically asking people to write a comment about how many people they know who are unemployed - then just add it to the previous poster.

The number of people unemployed (who people on activerain know of) went from 5 to 42 in just 6 posts.

ATTENTION ACTIVERAIN PEOPLE WHO SUPPOSEDLY READ THESE POSTS AND CHOOSE WHICH TO FEATURE:

Please consider featuring that article. 

Thanks.

Those who aren't activerain people who supposedly read these posts and choose which to feature - please visit the link and give some feedback along with how many people you know who lost their job recently.

:)

Strange thing. I hear on the news about all this unemployment and it slowly creeps into your backyard. I know several friends and some family members who have lost their job. So I started to pay closer attention to what's going on in our backyard here on Long Island. I decided to write about the Long Island unemployment rate to inform my reaqders of what is about to happen to the Long Island real estate market.

First I must state that I am personally concerned about what is going to happen with our local economy.

I am doubly concerned about how this economy is going to impact the Long Island real estate market in general.

As a Realtor, I see it as my personal mission to help educate the public not only about this or that house, but about the overall picture of what is going on and the unemployment rate increasing by 36% in one year in Suffolk county is something that raises my eye brow...alot.

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It's no secret that mortgage rates are low right now. Just about every buyer I talk to knows that rates are low. But it seems that most are not aware that they are historically low. I think many people, especially Long Island homeowners, firmly believe in the saying, "What goes up...must come down".
Well for the interest rates, maybe buyers should be watchful for the opposite when it comes to the interest rates.

This slide shows us that the trend during the last year, was for interest rates to be quite volatile. Whereas in the past, mortgage rates generally rose over a three month period, during 2008, rates were jumping up over a point in just 5 weeks. And even now, from week to week, it seems on a Monday, the rates spike to 5.4%, then slowly go back down.

My question is, what happens if the rates don't go back down? Now I've gone over the whole "it costs a lot more for a mortgage at 7% than it does at 5%" thing and I'm not doing it here again.

Now this graph is probably the most interesting you're going to get on the internet...anywhere! Statistics was never my bag, but when you look at them and step back, you really can see the big picture. Rates in 2008 were going up. And they went up until the government stepped in, for better or for worse, and implemented a "bail out" of Fannie and Freddie Mac.

Then shortly thereafter, as mortgage rates went up rather swiftly, the gigantic bail out occured and rates went back down. So where does that leave us?

With another "bail out" of sorts coming, in the form of a "stimulus" package from the federal government, it appears like for now, the rates will remain low. However, inflation is something that does not mold well for low mortgage interest rates. And there's not a whole lot the government can do to change the natural course of the financial markets.

Without government intervention, at least from where I'm sitting and writing this article, it sure seems like rates want to go...up.

(c) Copyright, 2009 www.tommcgiveron.com

www.lispendensbytown.com

Time and time again, I have people calling me or emailing me about foreclosed homes. I reply to alot of posts on trulia.com, where home buyers and sellers can ask questions about real estate and I find alot of people asking about foreclosures. So what's all the hub-bub about anyhow? Are foreclosed homes a good buy or not?

I'll provide an example. In Deer Park, there is a very nice colonial, priced at $319,000. It is a foreclosure, which means that it is bank-owned. Please note that a foreclosure is an "as-is" sale, where the bank is making no representations and is not going to do anything to rectify any problems with the property, whatsoever.

Now this nice colonial for $319,000 compares with other colonials in the area and they are priced in the upper $380,000 to $450,000. That's a big difference.

But let's take a closer look. This is where I like to really help potential buyers get the full picture. Now, at $319,000, this house, without getting into too many details, needs about $40,000 worth of work...that we can see. This doesn't include any c/o (certificate of occupancy) issues or unseen problems with plumbing or heating systems.

If the asking price is $319,000 and we assume that we can purchase the property at $300,000, with the additional $40,000, plus another $15,000 just to be safe, this would put the total cost at $355,000. Since we assumed a $19,000 negotiable range on this foreclosure, lets apply that to a "normal" house for sale at $380,000. So a "normal" colonial, with only minor updates needed, would cost $361,000, assuming the negotiable price range of $19,000 (same as the foreclosure).

That's a difference of $6000.

I am not trying to discourage any buyers from considering a foreclosure purchase. Not at all. However, the majority of foreclosure listings are still priced along with the rest of the market. When all is said and done, a foreclosure may not be any different from your average regular listing.

A number of issues should be understood by any buyer who considers purchasing a foreclosed property. Should you have any questions, please feel free to leave a comment or contact me directly at 631.831.9048.

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

I'm new to Twitter - not sure what to make of it - but this post helped me get there!

Costar Quote:

"The nation shed nearly 2 million jobs through November of 2008, and still counting. Corporate downsizing drove a wedge into property fundamentals, with rising vacancies, falling cash flows and plunging values pummeling investor confidence. With flat or negative absorption in many U.S. markets, job losses likely will spell trouble for year-end absorption totals, further dimming the outlook for office and industrial space in 2009." 2008 Year in Review

Great article.  Now as the commercial market takes a beating, how do you think this will impact the residential market?

It's amazing how homeowners do not fully appreciate the brevity of their situation.  It's so delicate.  In one month - they could lose - LOSE as much as 1.5% equity value in their home.  Yet they still think that it's going to turn around in Spring...like they thought last spring and the spring before that.

What I also find troubling is that many homeowners honestly feel that they know more about the market than a professionally trained real estate agent.  Granted - only about 10% of us actually know what we're doing - but when I walk into a home - I mean, I've got all the latest information and it's not the crap they watch on CNN.  I pay for my information...anyway - I find homeowners saying "yeah, tommy it will turn around in a few months."

Sad.

More are inclined to believe me but they're still "holding off" until Spring.  It's tough to convince a homeowner that time is NOT on their side.  If they need to get out - GET OUT!  Get into the drivers seat...buyer's seat!

This is a foreclosure update for the Long Island real estate market. This report features the number of homes that are in the foreclosure process or currently bank-owned throughout a sample of the Long Island real estate market.

Suffolk County

West Islip = 70 Homes Pending Foreclosure - this represents over a 50% increase since the last report on Oct. 7, 2008.
Deer Park = 176 Homes Pending Foreclosure - a 165% increase since October, 2008.
Babylon = 34 Homes Pending Foreclosure (nearly 200% increase)
West Babylon = 188 Homes Pending Foreclosure (117% increase)
Lindenhurst = 193 Homes Pending Foreclosure (exactly 100 more foreclosures...in two months)
Patchogue = 17 Homes Pending Foreclosure
Miller Place = 47 Homes Pending Foreclosure
Riverhead = 3 Homes Pending Foreclosure
Huntington = 95 Homes Pending Foreclosure (nearly 100% increase since Oct. 2008)
Port Jeff = 21 Homes Pending Foreclosure (100% increase)
Sayville = 32 Homes Pending Foreclosure
East Hampton = 4 Homes Pending Foreclosure (300% increase)
Smithtown = 11 Homes Pending Foreclosure
Hauppauge = 26 Homes Pending Foreclosure
Manorville = 43 Homes Pending Foreclosure (over 144% increase)

Total = 960 Homes Pending Foreclosure (51% increase since last report in October, 2008)

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I am currently implementing the strategies of Darryl Davis. I have had his stuff for a long time - I benefit from being partners with one of his former power agents. :) Anyhow - he has a book on Amazon. Check it out

http://www.amazon.com/gp/product/0071385207?ie=UTF8&tag=real...

If you just graduated out of the class and are getting your license - this is a MUST READ:

http://www.amazon.com/gp/product/0793154375?ie=UTF8&tag=real...

Anyhow - for some more books - I put a site together with links for a bunch of real estate related information:

http://www.tomsresource.com/real-estate-agent/

Enjoy - good luck!

The STAR program for New York state is one of those elements of Long Island real estate that talked about alot, but understood very little. Most people refer to the STAR program as a simple real estate property tax decrease. STAR is an acronym for School Tax Relief.

The STAR program application is completed by homeowners one time and provides an exemption from school taxes for non-owner occupied, primary residents. The deadline for filing is generally March 1st of each year, however it is best to check with your local tax assessor.

A great resource for information on the STAR program is http://www.orps.state.ny.us/star/index.cfm.

Long Island Short Sales

Long Island short sales are on the rise. The numbers are staggering. According to the Long Island Board Of Realtors, short sales will continue to rise and real estate agents will be scrambling to assist homeowners in danger of losing their homes to foreclosure.

However, in my travels as a professional real estate salesperson, I find that many homeowners do not know anything about "short sales". A short sale occurs when the seller's lender (the bank that holds the mortgage on the house) accepts a discounted pay off in order to release the existing mortgage. Basically, the bank agrees to take less than what is owed on the property and the homeowner is able to walk away from the property without having any further debt owed to the lender.

On Long Island, short sales are becoming increasingly "popular" with homeowners who cannot pay their mortgage due to mortgage resets on adjustable rate mortgages.

The main reason why short sales are the most viable loss mitigation alternative is because the effect on the homeowner's credit is much less damaging than a foreclosure. On a FICO score, the average loss is 300 to 400 points when a homeowner goes through the process of foreclosure. However, if the homeowner chooses to negotiate a short sale, the drop in FICO score may only be 80 to 100 points, assuming their mortgage is the only debt they can't pay.

The short sale "package" that many homeowners will need to submit to the bank will include...

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