Long Island Real Estate Market

I recently sat with a homeowner to discuss the fair market value of their home and to talk with them about the Long Island real estate market. We sat to talk and started talking about the market. She had lived in her home for 35 years and was curious about selling.

As we talked, I showed her all the information that I normally review. This information contains the latest insights from experts in the real estate industry as well as my expert analysis of the Long Island market.
Halfway through our discussion, she said, "Oh, so prices are dropping?"

This interaction helped me realize that I, and my colleagues in the real estate business, have our work cut out for us. There are a number of homeowners out there that just do not pay any attention to what's happening. And there are some that do listen and know a little, but still think Spring will bring higher prices.

With nearly a 28% drop in prices since 2006, Long Island real estate [NEWSFLASH] prices are dropping. This graph shows just how different the Long Island real estate market is today as opposed to the 1990's. I recently had a discussion with an investor in Babylon who told me, "We've been through this before in the 90's. We'll ‘bounce' back." Well this graph breaks down both the 90's and now and what you see is that long line going down...we're over 200% worse off now than we ever were in terms of lost equity/value. The depreciative numbers are staggering.

The current inventory, as of February, 2009, for homes available for sale on Long Island was 32,746 homes for sale. As for demand (buyers), 2486 closings ocurred in February, with Suffolk county seeing the most sales at 905 units sold according to the Multiple Listing Service. And remember, those closings are homes that went into contract most likely in November/December, 2008 and some in January of 2009.

Click here for more information on Inventory and how it's affecting price.

For the past 3 years, we've heard about mortgage defaults and lots of people talking about the "subprime loan crisis" but Option ARM mortgage defaults will shortly become the unfortunate talk of the town. Option Adjustable Rate Mortgages are mortgages that reset after a specific time to a capped mortgage rate and they adjust with market pricing. Watch the video to get a better insight into these and similiar loans.

Now if you watched the video, you'll get a sense of doomsday. Others that I've talked to about the next wave of mortgage defaults and foreclosures say the government will solve the "problem" by mandating massive loan modifications and just buying more banks. Let's take a look at some information first before we say the government can solve the problem.
If you look closely, you'll see that the subprime mortgage crisis is "behind us", although we're still feeling the pinch from this because many of those borrowers have their homes on the market as a short sale or have already foreclosed. However, looking forward, you'll notice a gigantic increase beginning halfway through 2009 and through 2011, that Option ARM loans and Alt A loans will see their resets begin to occur. This means those homes (many are already behind on their mortgages) will see an increase of their mortgage payments (that they can't afford now).
The amount of these loans that were written are astounding as well. Option ARM's make up nearly 18% of every mortgage in America (that's nearly 2 out of every 10 household). If that doesn't make you scratch your head and say, "Hmm", you're either brain dead, simply really don't understand (call me), or you don't care. And to get to the point of the title of this article, while I don't have statistical data as of yet, it's a very well-known fact that "a ton" of these types of loans were written here on Long Island. That's where a lot of people, made a lot of money.
When you think about 50% of these loans being unable to be paid, that's alot of loans in default. And to touch on the point about the government "saving the 'victimized' people from losing their homes", who's to say that after the government "saves" them, that they'll continue to pay the mortgage or maybe people who are paying their mortgage will scratch their head and say, "Why am I paying my mortgage...

Click Here To Read The Rest Of The Article

Foreclosure Sites

"So this guy I know is a real downer..."  Ever talk about someone like that?  Every time they open their mouth you kind of ask to yourself, "Oh boy, now what?"

I think President Obama is that kind of guy.  He can't help himself from using sensationalistically fatalistic language when talking about the economy.  It's like, "Okay dude, we get the picture - banks are hurting, people are hurting..." 

It's like the local news at 10pm - "We've got bad news. More bad news.  Extremely bad news - oh and now the weather. Okay more bad news.  Now sports. And more bad news at 11..." - only with Pres. Obama, it's like local news on steroids, namely because he's the president and anything he says is magnified.

I speak to more people who increasingly say, "Man, that guy (President Obama) won't shut up about talking down the economy."

Conservatives like Rush Limbaugh, got flack for saying they don't want him to succeed.  Well it's kind of like the president doesn't want the US economy to succeed.

Here's a hint Pres....try not to insert foot in mouth - keep it shut for a few days.  Talk about the flowers on the East Lawn or something.  Give out some more DVD's or something.  Watch a happy movie.  Chill...

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.

:)