Long Island Real Estate Market

WHY SELLERS SHOULD "SELL" AND BUYERS SHOULD "BUY" RIGHT NOW!

Lately many buyers are asking themselves is this the right time to buy? It seems a major contributor to this uncertainty and question is because buyers are wondering if they would be better off taking the gamble that home prices will continue to fall. Is this gamble a smart one? Should you wait and take that risk? The answer to both of these questions is "no"! While yes, it's true that home prices are likely to continue to fall some, the more important factor that needs to be considered, and is also likely to occur, is that home mortgage rates will continue to climb. This is in large part due to the fight of growing inflation, increased foreclosures and the sub-prime mortgage mess. While the average mortgage rate for a conventional 30-year fixed rate is still relatively low compared to historic rates, aggressive buyers who wait around for rates to go lower have little time to react once rates start to climb.

But what about the seller? Should they wait to see if a buyer is willing to pay what they're asking or even close to the asking price? Well, to answer that question, we have to consider several factors. 1- What is the motivation of the seller? Are they looking to purchase another home or even better yet, are they already in contract to purchase their next house? In a majority of cases, this seems to ring true for a large portion of sellers. If this is the case, it is far better for a seller to consider lowering the price of their house "now", or have a realistic price set in their minds that will attract buyers, than to wait for that "one " buyer who is willing to pay top dollar...it's not going to happen, not in this market!

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Filed Under Buyers, Foreclosures, Sellers, Sellers & Buyers |

Sellers Beware! Buyers Beware!

According to www.LIRealEstateReport.com , Suffolk County saw a dramatic increase of foreclosure filings, as did Nassau County. Nearly $870,000,000 of real estate inventory in Suffolk County is facing foreclosure. As of July, 2008, there were 18,638 total listings in Suffolk County according to the Multiple Listing Service. There are currently 2,723 Lis Pendens filings in Suffolk County alone. Let me repeat - 2,723 homes facing foreclosure in Suffolk County.

Click here for help to avoid foreclosure

In Nassau, there are 1,620 facing foreclosure with a median price tag of about $380,000, while Suffolk's price tag for a home in foreclosure is about $319,000.

This data suggests that the epidemic of foreclosures facing our area alone is very concerning.

If you are on the market now, drop your price. If you are thinking of selling your home, find out your exact motivation for doing so. If you need to get out (and really ask yourself the tough questions to get the real answers), then don't wait around. With every home that enters into foreclosure in your area, the impact on your home's value will drop approximately $8,000. That's instant equity loss.

I have written on this subject numerous times. I just hope who ever is reading my articles that they actually take into consideration the severity of the housing and foreclosure crisis that faces us.

I'm not a doom and gloom type. In this market, there's a great opportunity to sell your home. You won't be selling it for the price you could have gotten a few years ago, but remembering the 25% annual appreciation that was realized from 2003 to 2005/2006, should help remind you about that great benefit to your home's value, even now.

For buyers, there's two main things to consider. One is that it's a great time to consider buying a foreclosure or short sale. There are a few legal items to consider, so make sure you consult your attorney before buying a foreclosure, pre-foreclosure at auction or short sale.

Secondly, for buyers, it's important to know what's going on in the area you're looking in. This is very important. I work as a buyers agent, representing buyers in the largest financial transaction of their lives. I pride myself on providing them with the best information possible about any area so that they make an informed decision.

For a Comprehensive Market Analysis of your home's value, or to call me to inquire about finding a home to buy (or both), call me at (631)831-9048.

(c) Copyright, 2008 www.tommcgiveron.com

By Tom McGiveron

As we progress through this challenging market, one of the glaring differences between successful selling agents and unsuccessful listing agents is how they are advising homeowners. There are plenty of real estate agents doing business like it was 2004 all over again. They are the agents who are telling homeowners anything they want to hear and promising just about anything to "get the listing".

The importance of appraisals will have a major impact on the long island real estate market moving forward into the end of 2008 and the beginning of 2009.

Why?

Simple. Appraisals are tightening up, much like the mortgage industry. Banks are not simply window shopping loans. Banks are now involved in the process of establishing appraised values on homes throughout the Long Island area.

The business of real estate sales has changed dramatically in the past 2 years. That's why the National Association of Realtors (NAR) lost over 100,000 members in the first three months of 2008. Understanding the business of real estate is an absolute requirement. The days of getting your license and slapping a sign on a piece of property, only to sell it 4 days later are gone and with those days, so are the people who got into this business without a clue as to how it really works.

Now, appraised values are increasingly difficult to determine. I am a very conservative market analyst. The numbers I provide my prospective home sellers are as accurate as possible and close to what I believe a home is truly worth - according to a bank - as possible. I am not a certified appraiser. I provide comprehensive market analyses of home values based on recent and pending sales.

Pricing a home for sale correctly can also help the buyer. If a buyer puts in an offer on a home that is overpriced, goes to contract and then finds out the home won't appraise for what they offered, they could find themselves in a predicament, depending on the contract stipulations (I think it's safe to say that a buyer, especially in this market, doesn't want to be paying more than fair market value).

So moving forward, it's important for homeowners to listen to an agent who gives them the goods on homes sold in the area as well as pending sales. What's more important is also a combination of events in the market, comparative data from last year given a matching time period, mortgage industry news and much, much more. Personally, my presentations may not be the prettiest thing going, but they are packed with information that's useful to helping a prospective seller price his/her home correctly to acheive maximum buyer interest and ultimately qualified and acceptable offers.

(c) Copyright 2008 www.tommcgiveron.com

By Tom McGiveron, Licensed Real Estate Salesperson

For a free comprehensive market analysis of the value of your home, please call me at 631.831.9048.

Long Island Real Estate Market: Foreclosure Update, August 2008

This is an update for the foreclosures that are pending in Suffolk County. I decided to include some towns in Nassau County and Queens as well.

Suffolk County

West Islip = 27 Homes Pending Foreclosure (10% decline)
Deer Park = 61 Homes Pending Foreclosure (39% decline)
Babylon = 25 Homes Pending Foreclosure (No change)
West Babylon = 98 Homes Pending Foreclosure (No change)
Lindenhurst = 109 Homes Pending Foreclosure (20% Increase)
Patchogue = 15 Homes Pending Foreclosure (7% Increase)
Miller Place = 33 Homes Pending Foreclosure (58% Increase)
Riverhead = 4 Homes Pending Foreclosure (20% Decline)
Huntington = 57 Homes Pending Foreclosure (14% Increase)
Port Jeff = 10 Homes Pending Foreclosure (33% Decline)
Sayville = 22 Homes Pending Foreclosure (8% Decline)
East Hampton = 1 Homes Pending Foreclosure (No change)
Smithtown = 8 Homes Pending Foreclosure (25% Increase)
Hauppauge = 16 Homes Pending Foreclosure (13% Increase)
Manorville = 26 Homes Pending Foreclosure (8% Decline)

Total = 512 Homes Pending Foreclosure (1% Decline)

Nassau County

Farmingdale = 16 Homes Pending Foreclosure
Seaford = 4 Homes Pending Foreclosure
Massapequa =32Homes Pending Foreclosure
Freeport = 47 Homes Pending Foreclosure
Wantagh = 6 Homes Pending Foreclosure
Lynbrook = 7 Homes Pending Foreclosure
Elmont = 34 Homes Pending Foreclosure
Oceanside = 5 Homes Pending Foreclosure

Queens

Flushing = 184 Homes Pending Foreclosure
Bayside = 29 Homes Pending Foreclosure
Jamaica = 1123 Homes Pending Foreclosure
Howard Beach = 30 Homes Pending Foreclosure

If you want information on a specific town, leave me a comment or call me at 631.831.9048.

This information is very useful for both sellers and buyers. For sellers, it will give you insight as to how the foreclosures in your area will damage the value of your home. I will provide a complete report on foreclosures on Long Island next month that will include exactly how a foreclosure in your immediate area impacts your home's equity. We all know it has a "bad impact" and is negative - but just how much are we talking? Come back next month and find out.

For buyers - the information provides you with a snap shot of just how many foreclosures there are (active and pending) in a given area. For instance, I would say that Jamaica, while a large area, should be avoided by buyers who are looking strictly to purchase and occupy a home. It's a great area for investors, but not for the average home purchaser, based solely on the fact that the number of foreclosures is so high. As a buyer in this market, you want to buy low...in an area that is not being riddled with foreclosures and lis pendens filings.

Good Resource for 1st Time Buyers

(c) Copyright 2008, www.tommcgiveron.com

By Tom McGiveron

Long Island Real Estate Market: Quit Your Whining!

Filed Under Buyers, Sellers |

Attention Readers: This is a vent session. I'm going to share with you my personal insights about the general feelings I sense from others impacted by the current Long Island real estate market. During a "vent session", the golden rule is not to hold everything someone says against them, rather, you just "let'em vent." Thanks for your understanding.

Okay, so for fellow agents, I've got to point out a few things. We are all working with buyers who are really shoppers. They are shopping, plain and simple. They are taking you from house to house and even when you get that "feeling" like, "They are gonna love this house. This is it..." - what happens? They don't like it. Sigh...back to the drawing board...and a thought - "This market is crazy!"

You see, we as professionals (those of us that take this business very serious and understand it) realize that now is without a doubt, a fantastic time to buy. The old rule is, "Buy Low. Sell High." Well prices are low [and interest rates are still good]. But trying to convey that to "buyers"...or shall I say, "shoppers" is very difficult. For some reason, because we are "Salespeople", our word is suspect and we're only saying things to "get them to buy."

It's insane! I agree. But...quit your whining. I realized that the more I whined about working with shoppers, the less effective I was with moving them along to a successful crossing into homeownership. Whining about them is of no use and is simply not an effective strategy for conveying a mindset that is focused on one thing - helping them find a home.

Sellers. The number one phrase I hear from sellers is the following:

"...Yeah, the market's bad, but I'm not going to give my house away."

This statement is uttered by more sellers than I can count. If I had a quarter everytime I heard this, I would seriously have enough money to take a vacation in Italy...twice...for two months...each.

"I'm not going to give it away", coming from someone who (if they owned prior to 2001) experienced over 100% appreciation in 5 years.

Now here I could "whine" about how I "can't stand" hearing that statement. And a few months ago, I would probably have said that. But I'm not hear to whine about other peoples whining behaviors.

I like hearing it now because I delve right in and determine whether they're serious about selling or not. If they're not, I do not take the listing. Period. This saves me time and money. I also convey this, rather strongly, to the prospective seller. I tell them honestly, that I will not take their listing if it is priced too high (to even appraise for the number they want to ask).

My advice is always the same - "Quit your whining!" (Again remember the golden rule - this is a vent session). Being positive about what is good with a situation will yield better results. Thinking in the terms of "giving away" your home is not a winning attitude - it's a whining attitude that leads to increased frustration and despair.

If you lose money on it - then so be it. Move on. It's tough. It's stinks. You want to kick yourself...hard. The alternative is to not sell. Or think about it this way.

You bought it for $50,000 (let's just say you purchased in the early 80's). You refinanced and pulled money out to pay for your daughters wedding, fix up the house, pay off the boat, lend money to your son, redo the landscape, and go on a gigantic vacation overseas. So you turned your cash into...trash. Get over it.

Your home was worth $750,000 in the winter of 2005. And now, you can't get $499,000. You're sick to your stomach because you owe $400,000.

Now here's where I scratch my head and ask, "Yes, but didn't you take out all that money and GET THE MONEY?" Whether you spent it or not, you still received the benefits of your equity. And luckily, you're in a position where you can sell the property, pay a commission to a professional and put what's left in your pocket. You can also buy a house for less money, which is a trade off in equity.

Again, a whining attitude will get you to think about the negative. A winning attitude will help you realize that the market is what it is. Your decisions in the past have impacted your current place in this world. Rather than have X amount of equity, you're stuck with the fact that you spent your equity on other things and didn't plan on the economic slow down and real estate correction...and neither did your mortgage consultant, real estate agent, aunt, uncle, dad, mom, brother, sister, friend, politician, President Bush, President Clinton, Alan Greenspan, Citi Mortgage, Chase Bank, Wells Fargo, Deutche Bank, all the mortgage companies and banks that have gone under, and probably even God Himself!

So, don't beat yourself up. Don't blame others for your "misery".

Move forward. Quit your whining.

To all agents and sellers, realize that there are buyers out there or shoppers who will eventually become buyers. You have to focus on winning them over, because whining over them will not produce successful results.

Get over it. Move on. Life is too short. Oh and thanks for letting me vent! I hope my vent session helped you realize a thing or two about your situation.

For a comprehensive home value assessment, Click Here. I will be in touch within an hour.

(c) Copyright 2008 www.tommcgiveron.com

By Tom McGiveron

Deer Park Real Estate: Market Update August, 2008

Filed Under Sellers |

I'm going to compare June 2008 data with July 2008 data. I never liked math in school and I especially disliked statistics. However, like Mr. Alberding said in my 11th grade Math II Regents class (which I repeated from 10th grade due to complete and utter failure), "These statistics are useful."

According to the Multiple Listing Service of Long Island as of July 8, 2008:

1. 215 = The amount of homes available for sale in Deer Park (11729)

2. 14 = The amount of Closings for the month of June, 2008 in Deer Park.

3. 15.3 = The amount of months of inventory there is in Deer Park

According to the Multiple Listing Service of Long Island as of August 15, 2008:

1. 219 = The amount of homes available for sale in Deer Park (11729)

2. 12= The amount of Closings for the month of June, 2008 in Deer Park.

3. 18.25 = The amount of months of inventory there is in Deer Park

So in this basic analysis, we see an increase in the number of homes available. The market took on 4 more new listings while selling 2 less homes in the month of July. That means we're taking on more inventory and selling less (this is not good). The average sale price in Deer Park for the month of July was $378,992 compared to $367,928 for June. Aha! The market is coming around! Prices are going up! No it just means that the group of homes sold in July had a few homes in Deer Park that sold for over $500,000, thus boosting the average sale price higher.

I added the average sale price in there to prove Mr. Alberding's point. Statistics are more than just averages. In my analysis, I take (3) factors that provid an overall sense of where the market is. Months of inventory allows us to measure against the amount of homes for sale and the actual number of sales in a given month. This gives us our outlook for inventory.

The number one market factor impacting the value of homes on Long Island is the available homes for sale. There's just so much to choose from and there's simply not enough buyers to purchase every home.

If you want to sell your home, pricing it right is an absolute must.

Need to know the value of your home? Click Here. I'll be in touch within an hour.

(c) Copyright 2008, www.tommcgiveron.com

By Tom McGiveron

There's two sides to the real estate business. There's the emotional side where the person is buying [or selling] and then there's the business side, the non-emotional, logical and rational side. The emotional side is made up of the excitement, frustration, euphoria, fear, etc. that the buyer feels when they're going through the process of looking at houses, making offers, arranging furniture in their minds as they look at homes, etc.
The business side is the side that most homeowners and prospective homeowners don't look at. Homeowners and prospective homeowners do not pay attention to this important side.
Therefore, they get involved with real estate agents who are like them. They don't pay attention to the business aspect of real estate and thus, do not (can not) consult their clients accordingly. These real estate agents know about the market and homes in general. They can tell you alot about a home, type of construction, the heating system, the history of the neighborhood, local home values, etc. But on the business side is the most vital because in the transaction of real estate, is a business transaction. We're talking about a financial transaction of over $375,000 on the average in the Long Island real estate market.
That is a major business and financial transaction that is cut throat and perfectly rational. It is based on municipal regulations, real estate laws, appraisals, and thorough analysis of the conveyance of title. It requires insurance policies to be executed and title insurance to issued in order to assure clear conveyance of ownership.
The business side of the transaction is where the turkey is talked about. In this market, with changes in the mortgage markets from day to day, if an agent is not thoroughly entrenched in the business side of real estate, they could certainly cost a homeowner and prospective homeowner thousands upon thousands of dollars.
A real estate agent must be empathetic to the emotional needs of his/her clients, while at the same time proficient in representing their business interests which includes helping their bottom line.
I know for me, personally, I pride myself on being "in the know" about mortgage markets, where they're going and how it will effect both my selling clients as well as my buying clients. For example, higher interest rates will effect my sellers by shrinking the already small buyer pool. Higher interest rates combined with a banking industry that has tightened it's lending practices so much already, will only make things more challenging for my selling clients because these two important aspects will drive the buyer pool down.
Higher interest rates for my current buying clients/customers means one thing - find a home now, while prices are still down and interest rates are still low because with higher rates comes higher monthly interest payments, which translates to thousands of dollars leaving their income column and going into their expense column. Sure they will get to "write off" the interest at the end of the year, but high cash outlays during the month of say August, totally overshadows the fact that sometime in the future you'll get a "write off" in taxes.
I consider myself a counselor, consultant, and businessman. While I am human and very much enjoy helping people find a home to buy or help them sell the one they have and buy a new home, I also am a businessman who takes the responsibility of representing my clients business interests very seriously.

(c) Copyright 2008 www.tommcgiveron.com

By Tom McGiveron, Licensed Real Estate Salesperson

This is just a good resource for your first-time home buyer. 

Home Buyer's Checklist

Covers alot but well worth it.  I used it to give myself some insight as to what it's like to be a first time home buyer...again. 

You're in the business 24/7 - you can forget what it's like to be on the other side sometimes.

Plus it's a good resource for your clients - kind of like a good item to lend out to a needy client.

Good luck!

For Sellers:
"Home prices may fall 25 percent to 30 percent from their peak in 2006 and not hit bottom until 2010, with greater drops still in subprime mortgage debt markets." - Peter Acciavatti, credit analyst and managing director at JP Morgan Securities Inc Source: Reuters 6/11/08

"Home prices, based on the S&P/Case-Shiller data, have fallen about 15 percent and I am expecting them to drop another 10 percent before reaching a trough in the spring of 2009." - Mark Zandi, chief economist at Moody's Economy.com Source: Reuters News 6/26/08

What these two quotes tell me about the Long Island real estate market is that if you're in a position where you're really going to need to sell, you'd better get it on the market now, rather than wait until next year or even the year after.

I am all for people not selling their homes now. Really! You may think and ask, "Yeah right, how would you make money?". The truth is people will always need to sell and their will always be people looking to buy. If less people put their homes on the market, that would be a good thing - but only in large numbers. Supply and Demand dictate the pace of the market. When there's an over supply, the more dramatic it gets, the more prices will come down. So, really in that scenario, I, as a real estate agent, will do well in the business, whether the homes are priced high or low.

If the Long Island real estate market shed about 50% of the houses currently for sale (about 17,000 homes), this would drastically improve and stabilize declining prices and, again, as a real estate agent, I would fair well because this would help even out supply and demand would increase (more buyers).

However, I really don't like being in a position where I'm working with someone (seller) who is frustrated and dissatisfied with the results of "market feedback". Market feedback is what buyers tell you, simply by their actions. If their actions are to avoid your home and not see it, either by themselves or with another agent, this says one thing loud and clear, "The price is too high." It may also signal the fact that the home:

A. Is not photographed well.
B. Is outdated or in need of updates in key areas of home.
C. Is cluttered in the pictures (see A).
D. Is not differentiated from other homes.
E. Is not advertised fully or in high traffic areas (i.e. internet - and not just MLS).
F. Lacks a real estate agent managing the listing correctly.

Now, of course, some of these items are outside the real estate agent's overall responsibilities (to an extent). Sellers must be willing to do "their share" in order to increase the sale-ability of the property.

Market feedback can also tell you the home has all "the goods" (i.e. move-in condition, updated, etc), but priced too high. How so? Simple. No offers. A lot of showings with no offers should tell an agent that the price is a bit too high and only a slight price adjustment and remarketing of the property is needed to get buyers to the table. Now I highlight the word "should" because it's not a foregone conclusion that every agent will hear the market talking to them.

Homeowners working with real estate agents like to focus in on "a lack of marketing" by their respective real estate agents. And I will definitely say, that in some cases, they are right. But more times than not, especially in this market, it has little, if anything, to do with the marketing of the property. Why would I say this?

There are approximately 34,000 homes for sale in Queens, Suffolk, and Nassau Counties.

Now hiring an agent who works full-time and thus - has a vested interest in selling your home because it's food on their table - is probably a good idea. But here's a tip for prospective sellers - use google.com. Search the name of agents you're interviewing. See how involved they are in the field. If they're not involved...chances are they're a nonentity in the business. The selling of real estate is a business. It's not who's the nicest person (although that goes a long way) or who has a good recipe for chocolate chip cookies (although they're very yummy). It's about who sells real estate. Who is apart of the 7% of agents that make 93% of the business? See Teammusso.

For Buyers:

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Bush Offers Plan to Save Fannie, Freddie

Read this very carefully. I want you to think about this one question.

Why are tax payers bearing the cost of bailing out a company or an industry?

Think about this for a second. Is it necessary for the tax payers of this country, or any country, to make sure a failing industry can continue to fail or overspend itself into oblivion?

This is just food for thought.

This situation of uncertainty in this day and age is startling. When the government "scrambles" to do anything, I get a funny feeling in my stomach. When politicians like Sen. Chuck Schumer support something that basically gives more control to the federal government (as usual), I get a pit in my stomach.

If you have any questions about what exactly these companies do, please feel free to leave a comment.