Have we hit bottom yet?

The question on many peoples' minds is "Have we hit bottom yet?" This is not an easy question to answer. My belief is that there are some areas in the country that have not hit bottom yet and there are others that are darn near close. On Long Island we have seen some drastic reductions in price compared to just one short year ago. Homes that had sold for $400,000 in early 2007 are now selling for $300,000. For buyers this should seem to be good news however there still is a segment of buyers sitting on the sidelines waiting to see if the market will fall even further. My belief is that there still is some room for further price reductions in certain market areas however in other areas the price is probably close to bottom. Smart and motivated buyers are now in the position to scoop up homes that should far exceed their previous expectations. I have seen w/my own two eyes some pretty amazing deals. I would also like to point out that these incredible deals have been noticed by buyers since they have generated bidding wars with full and over full priced offers. I know that many people will find this hard to believe considering our current market environment but it is true.

Yet the news continues to sound ugly. Today's news pointed out that 1 in 194 homes had foreclosure notices filed. Home prices are down 12.7% through February 2008 and consumer confidence sank to a 5 year low.

Most people tend to become frightened when they hear this news and fright and fear breed inaction which causes the market to further stagnate. When I hear this news I tend to have 2 reactions. My first reaction is sadness for all of the homeowners out there who are losing their homes and all of their neighbors who will be stuck living next to a foreclosed property which can attract vandalism and blight. My second reaction is excitement over the many possibilities for well qualified buyers to get into their first home or the trade up home of their dreams. Home prices have finally fallen to realistic levels where the average person has a shot at home ownership without having to work 80 hours per week just to pay the mortgage. We have now entered into a time of wonderful opportunities for the next generation of home owners. I'm happy to say 'it's about time'!

How to fix what's broken

It seems as if Long Island is losing more buyers than it is gaining. Why is this happening when we all know what a beautiful place Long Island is? The short answer can be found in our ridiculous property taxes. It seems that even if you are one of the lucky few seniors who have paid off your mortgage, so what? You still will most probably have to pay real estate taxes that may be in excess of $1000 per month and you can still count on outrageous homeowner's insurance policy costs associated w/our living on an island. Heck, those wonderful companies like Liberty Mutual and State Farm decided to arbitrarily cancel people's policies even if no claim for damage was ever filed. The insurance companies cited too great a risk to insure in a coastal area. I guess Hurricane Katrina really woke them up.

Now back to our criminally outrageous real estate taxes.......... Do you know that real estate taxes on Long Island bear no resemblance to real property value? I'll give you some actual examples. How about a 3 bedroom, 1 bath ranch home w/no basement and no garage in Mastic selling for $151,000 that has real estate taxes of $7300? How absurd is that? If you were to purchase that home and put 20% down on it your actual principal and interest payment would be less than the combined cost of your real estate taxes and homeowner's insurance. Ooh wait, I have another example for you, how about a foreclosed 4 bedroom cape in Central Islip with an asking price of $199,000 that sports real estate taxes of $12,000? Now I ask our wonderful politicians out there, who the heck is going to buy a resale home (not new construction) in Central Islip that has taxes of $12,000????? Guess what? The NYC millionaire who wishes to buy a summer home in Southampton that is three times the size of the Central Islip home will only have to pay $9000 in real estate taxes. Where is the equity in that?

The lower middle class and the middle class are gettting squeezed out of home ownership by our elected politicians who refuse to make any meaningful changes to our outmoded system of real estate taxation. There tends to be neither rhyme nor reason when it comes to assessed valuation. It's high time that changes.

People want to buy on Long Island but not at a price they can't afford. Now that our home prices have fallen to more realistic levels isn't about time our real estate taxes also decrease to realistic levels?

Can you trust the news?

It seems that everyday there is some more news concerning the housing market. Yesterday the news appeared to be good, more buyers were getting back into the game. This news caused the stock market to rally. Today's news wasn't so good. Home prices fell to historically low levels with the average market dropping more than 10% from last year with Florida and Nevada suffering losses of close to 20%. Yesterday's good news had the National Association of Realtors saying that prices may begin to increase in the second half of 2008. Today's bad news had other industry experts saying that we haven't hit bottom yet.

Who are you going to believe? Watch out for the National Association of Realtors since they have a vested interest in promoting a healthy real estate market even if the facts do not support such a rosy picture. Beware of the Harvard and Stamford educated economists since they are way too busy sitting in their ivory towers pontificating on the world at large. They are not on the front lines and the data they base their decisions on is usually at least 6 months old so therefore they can not see trends happening.

In America, our idea of news is more closely related to gossip and innuendo than it is to real facts and real trends. Before you decide who to listen to, regarding real estate news, try listening to your own needs first and base your decisions on those needs not the news of others.

Foreclosures, Short Sales and Desperate Sellers

As an active Real Estate Investor and Buyer's Agent I have the opportunity to view a whole lot of homes (via MLS) on a daily basis. What is very interesting is that there are many homes that have been on the market for a very long time and they are dropping in price in gigantic increments. It is no longer unusual to see $50,000 to $100,000 price drops. Many of these properties are either in foreclosure or going into foreclosure. The banks holding these non-performing loans in their portfolios are getting pretty antsy about being long term property managers. At first they were not very amenable to deal with when trying to put together a short sale but slowly they have been coming around. I still find it easier to deal directly with very motivated sellers who are not in foreclosure but really do need to sell. Many good deals can be found this way if you know what to look for. I often employ my own buyer's agent when I am interested in a property since this saves me time and money. They will go out and preview up to 6 houses per day for me and submit offers on whatever ones sound good. They get paid a commission from the sale and they are extremely helpful when it comes to negotiating in my best interest. It is also very helpful to be removed from the negotiation if you are the buyer. This practice puts a third party negotiator in the middle of the deal so nothing becomes too personal when going back and forth on terms and price.

I know a lot of buyers are still sitting on the sidelines waiting for home prices to drop even further. I, too, agree that this will happen however there are always good and even great deals out there. Waiting is not always the best strategy unless you are sure that you are the best market timer in history. Even for us professionals, it is difficult to gauge the top of the market when one should sell and the bottom of the market when one should definitely buy.

Enjoy what's left of Winter and get your garden trowels ready for Spring.

Happy New Year!

Greetings everyone. I am thrilled to be alive and well and still practicing real estate. It's been a difficult past year in the market place. Lots of changes have taken place and are still taking place as we speak. It's much more difficult to get a mortgage today however the interest rates are very low which should be very attractive to anyone who plans on buying or refinancing in the next few months. I do not see rates trending higher since the economy is in the dumps and there is a political election coming up this year. If anything, rates will trend slightly lower. That's very good news and then home prices have dropped quite a bit so this is a perfect opportunity for buyers who have sat on the sidelines, saved up some money and have decent credit. Buyers who are able to easily get a mortgage or who have lots of cash will truly be in the catbird seat as this year hums along.

There are so many choices in housing today available to well qualified buyers that shopping for a house is a little like being a kid in a candy store. This is also an awesome time to be an exclusive buyer's agent. I just love being able to negotiate from a position of strength not weakness. Listing agents are literally falling over themselves trying to be nice and cooperative when we show our buyer clients homes. One of my agents just put together a great deal today and the listing agent profusely thanked her for bringing such a good buyer. This is all good news for the intelligent and well qualified buyer since they will be able to obtain excellent representation and in most cases it will not cost them a dime since all commissions are included in the purchase price. This really is a great time to be a buyer since it is as if all the planets are in alignment.

Well I wish everyone a happy, healthy New Year and a home of one's own.

Home for the Holidays

Well, Tis the Season. So what will be under your Christmas tree or your Chanuka bush? It is that time of year when everyone is in such an utter state of panic to make sure that holiday cards are sent out, presents are bought, travel plans are made and menus are planned that most of us forget the true purpose of the holiday season. It is a time to reflect back on the past year and to also look ahead to the New Year. It is a time for gratitude and appreciation for all that is in your life and all that can be part of your life.



This time of year can be difficult for many of us because of the losses that may have occurred during the past 12 months. Still, if you truly look around, you can find enough blessings to be grateful for. If you have a roof over your head you are luckier than many people. If you have enough food to eat and clothes to wear you have more than others in third world countries. If you have someone in your life that loves and cares about you than you are truly blessed.



Money may be the currency of countries but love is the currency of our souls. Take some time out from all the running and mad dashing from store to store this season and reach out to someone you haven't spoken to in awhile. Send a check to a charity you believe in. Volunteer your time if you don't have enough money left over to write that check. Give your family the gift of time which will always be treasured more than another toy or video component.

Turn you house into a home by making sure that there is always love and laughter within your four walls. These are the things that are remembered way after the season has come and gone.



Wishing you and yours a most memorable holiday season,



Bethany

A Tidal Wave of Doom and Hope

Every day the news get a little worse. The War in Iraq is still claiming lives on a daily basis. Suicide rates are jumping for returning veterans as well as their homeless rate. Foreclosures are at their highest level in years. The National Association of Realtors have forecast that we will be in for another tough year. Every day I get a call or two from desperate people who need to refinance or sell their homes. Every week I get a new notice from another bank I've done business with that says they are no longer in the business of loaning out money and writing mortgages. Consumer confidence is hitting some serious lows and the retail businesses are bracing for the worst holiday season ever.

Will this snowball of doom and gloom ever end? Of course it will. It always does. The War will eventually end. A new President will be chosen. New business technologies will emerge. Banks will begin loosening their credit requirements again. People will begin selling their homes easier and faster. Buyers will start to buy again with confidence. The cycle will start all over again. This is the way it has been for ages and the way it will be again. There is just so much doom and gloom we can take as a species before we create lasting paradigm shifts in our reality. The time is coming and it will be here before you are even aware of it. Concentrate on one good thing you can do for yourself or others and the good times will be here sooner than later.