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The sales numbers doesn't reflect a drop though. The houses that are selling are still selling on average for the same prices as they were last year. Now granted some areas may have declined, but some areas have increased (which equals an average).
Houses in my area of Old Bethpage are still moving, and moving for big numbers. You would never guess there was a housing crisis here. I am sure there are other areas in Nassau with the same results.
OB has been flat for the last two years... following an over 100K drop in average home prices.
The tax credit the 2nd time around did not help. We need to see the real estate market in it's true form without it. Real estate is local. Overall Long Island will see a drop this year. All I know is that in the Town of Babylon we are seeing less price reductions, and sellers and agents pricing at market value. Homes are selling. In Babylon, homes in the 500k+ price range are taking longer to sell. But, the luxury home market is doing better in Babylon.
Some areas across Long Island have a lot of short sales and foreclosures right now. This will be a factor in how much of a drop Long Island real estate will go down as a whole.
If anyone has the time, they should go back to 6/09 or even 6/08 and read the real estate stuff posted in the LI section of CD. You will find the same opinions, stats and predictions posted over and over. Lot's of arguments too. Good stuff.
But this time, it's different.
Yeah and I was involved in quite a few of those threads... and each time it resulted in the market going further down over that next year. Are you looking at the YoY stats? Did you see the numbers?
So, it's not different at all... it's going to be more of the same over the next year. Bet it's the same rhetoric in 6/11.
Quote:
Originally Posted by OhBeeHave
Not looking to dispute, but to relate local sales with the OP's post..
The OP wrote:
The sellers received decent advice somewhere. The homeowner could very easily have said it's worth half a million because it's north of 25A, and then sat on it for who knows how long. Realistic pricing moved the house quickly.
The second house was purchased at the height of the market. The owners put a few bucks in making the outside have curb appeal. They bought somewhere else as the market started to descend, but priced this home at or near what they paid a few years earlier. No one wanted to pay that for this house, given better homes with nicer locations were available for less. When they dropped the price and brought it into the realm of what buyers thought it was worth, it sold.
Call it a microcosm or what you will, but ultimately the free market determined what the value was of house #2.
OB has been flat for the last two years... following an over 100K drop in average home prices.
Ironically I see prices moving up again. A large Colonial not too far from me just sold for 715k. And that's OB zip, with Bethpage scools. Unbelieveable. Even the 1 story ranches in OB zip are selling for mid 400s now.
Ironically I see prices moving up again. A large Colonial not too far from me just sold for 715k. And that's OB zip, with Bethpage scools. Unbelieveable. Even the 1 story ranches in OB zip are selling for mid 400s now.
I can't speak for everyone. People on LI are delusional when it comes to RE.
Ironically I see prices moving up again. A large Colonial not too far from me just sold for 715k. And that's OB zip, with Bethpage scools. Unbelieveable. Even the 1 story ranches in OB zip are selling for mid 400s now.
I am around the corner from you (relatively speaking), in Plainview with both Bethpage and POB schools and see the same thing-a house around the corner was listed for almost $800K! It had better be mint, because, even in this area, prices have gone down, but not to what I would think is an extreme extent...
I noticed something last year when house shopping and I think it still seems to be true. I check back on the real estate site that i used when buying to see what's still selling and for how much.
Houses listed in the "sweet spot" - say, 350K to 450K are still selling pretty quickly (assuming it's not really a 200K knockdown). This is where first time homebuyers, putting 10% or so down can get a good conforming loan. These are not the buyers who need to sell a home (that they may be taking a loss on) to get the new house. What's still seems to be happening is that nicer and nicer homes are falling into that price slot and still seem to get snapped up pretty quick.
Move up to 600K, 700K and up...and jumbo loans - different story. Now we're talking about people who are taking a hit on their existing house - holding out for whatever they can because they need the "equity" to buy the next house. These houses seem to sit longer.
Frankly, when I closed a year ago August, I knew there was a good chance I could lose another 10% in the short haul... so i picked a house we could really AFFORD to make the payments on and figured, if "value drops" then we can ride it out. We shopped for a modest house, in a great neighborhood and a selling price no more than 2X our yearly salaries.
I noticed something last year when house shopping and I think it still seems to be true. I check back on the real estate site that i used when buying to see what's still selling and for how much.
Houses listed in the "sweet spot" - say, 350K to 450K are still selling pretty quickly (assuming it's not really a 200K knockdown). This is where first time homebuyers, putting 10% or so down can get a good conforming loan. These are not the buyers who need to sell a home (that they may be taking a loss on) to get the new house. What's still seems to be happening is that nicer and nicer homes are falling into that price slot and still seem to get snapped up pretty quick.
Move up to 600K, 700K and up...and jumbo loans - different story. Now we're talking about people who are taking a hit on their existing house - holding out for whatever they can because they need the "equity" to buy the next house. These houses seem to sit longer.
Frankly, when I closed a year ago August, I knew there was a good chance I could lose another 10% in the short haul... so i picked a house we could really AFFORD to make the payments on and figured, if "value drops" then we can ride it out. We shopped for a modest house, in a great neighborhood and a selling price no more than 2X our yearly salaries.
Your "sweet spot" at the old traditional lending guidelines of 3x gross (I think you're correct in this going more towards 2x in this economy) would mean these "first time" homebuyers would be making about $120k/yr minimum - closer to $180k/yr for someone being conservative like you.
That's way more then the median salary of most of LI! Granted a good portion of folks do make that much, especially with dual incomes... But I don't think that's the long term "sweet spot" when you consider the salaries on the entire island.
Don't you think that much of the current activity could be bolstered by downsizers? Dropping down into the lower price points with large downpayments.
Your "sweet spot" at the old traditional lending guidelines of 3x gross (I think you're correct in this going more towards 2x in this economy) would mean these "first time" homebuyers would be making about $120k/yr minimum - closer to $180k/yr for someone being conservative like you.
That's way more then the median salary of most of LI! Granted a good portion of folks do make that much, especially with dual incomes... But I don't think that's the long term "sweet spot" when you consider the salaries on the entire island.
Don't you think that much of the current activity could be bolstered by downsizers? Dropping down into the lower price points with large downpayments.
I'm sure there are downsizers in the mix... too. We noticed a lot of first time buyers when we shopped... drop in rates + drop in prices finally put houses within reach.
Lots of older "first time buyers" out there. I was 40... so. those salaries might be a bit higher. Fair number of people making the move from renting in Manhattan to buying in the suburbs (that's what we did). Our mortgage, taxes and insurance payment is actually a couple hundred lower than our rent was on a one bedroom in a luxury building... so, with the tax savings on top, it felt like a good time to buy.
Can't speak to the "sweet spot" in relation to median salaries... I can only give thoughts on what I saw anecdotally - good houses in that range sell much more quickly then houses in the 600K and up range. A good house below 450K in a decent neighborhood will not be on the market long right now.
Think the big thing is, we didn't view the move as something we can flip in 5 years. it's a nice little place by the beach where we can have friends out, I've got room for my stuff (instead of paying for mortgage) and set up an office for my side gig. I can hunker down if I have to... or rent it if we have to move.
Median salary in Nassau for 2008 was 95,000. Using a conservative lending standard of 2.5 gross you get to 237,500. Since it is an island maybe you'd be willing to stretch to 3x and 285,000.
But last time I checked Nassau median prices were close to 400,000. That is 4x gross median salary. So the median household cannot afford the median home. I don't think that means massive price declines because people on LI treat RE like a religion. What I think will happen is that prices will move sideways for a very long time.
There are people who grew up in the area knowing nothing but home price appreciation. Homes have become like shrines where residents have invested a significant portion of their time, money and self-worth. This is not a market where sellers are going to knock 100K off the price for a fast sale. They will instead let a home sit on the market for months, or years, at an asking price that made sense back in 2006 and then give up in disgust. i know several people who have done just that. The fantasy that their home had secured them a comfy retirement is an illusion that is very difficult to release.
However, the fact remains that the median household can't afford the median home.
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Good stuff.
