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I should add the only thing keeping prices slightly lower in Nassau is the property taxes here. I recently saw single family houses in desirable areas in Queens that needs a lot of work asking 1.5M
Barring another economic collapse, prices will likely be trending up, but nowhere near the boom levels of 10 years ago or what we are seeing currently in Brooklyn and portions of Queens
Barring another economic collapse, prices will likely be trending up, but nowhere near the boom levels of 10 years ago or what we are seeing currently in Brooklyn and portions of Queens
I think some parts of Nassau County are now past the boom numbers of 2005.
Houses were $50k, $200k at one point. Of course they trend upward over decades.
OP is likely asking for short term - see his other posts - he's looking to buy.
As an individual with a choice to make, buy now before the rates rise even more for you. That will hurt more over 30 years than a $20k home price increase. You'll see if you use a mortgage/amortization calculator. And you can't time these price drops if you're already in the market anyway. It takes months to even find a good place.
Over the time real estate prices do go up, but my concern is Nassau county property tax. Majority of aging population is looking to relocate from the island, due to high taxes. Plus rising interest, along with prices and taxes, is a recipe for disaster.
Over the time real estate prices do go up, but my concern is Nassau county property tax. Majority of aging population is looking to relocate from the island, due to high taxes. Plus rising interest, along with prices and taxes, is a recipe for disaster.
I doubt an increase to still historically low levels of 5-6% will do much to dampen demand, assuming most people take the traditional 30 year fixed mortgage.
The only thing that I see short-term that will hurt is if interest rates spike and the people with ARMs get hurt.
As the population of Long Island has been pretty steady for 30 years (Nassau's 2014 population of 1.358 million is only slightly larger than 1980's 1.321 million) there will continue to be the trend of retirees leaving and people from NYC relocating to the island. As long as these people can still earn NYC salaries this should remain pretty much the same.
However, should the major firms start to pay less, or should functions get moved away from NYC I can see a slowing demand for LI properties. For people not working in NYC I see a decline in manufacturing which is a bit of a concern.
April 1, 2016 low flood insurance rates start to fade away. Obamas Flood Insurance affordability act stopped the huge hike of Biggart Waters but starting that day it starts moving at renewal up to 18% a year till full risk.
Combine that with the county wide reassessment in Jan 1,2018 and a lot of South shore homes low property taxes and low flood insurance will get hit hard. Add in mortgage rates project to rise in 2016 that 700K all new four bedroom split bought today with $400 flood insurance and $8,000 in taxes and a 3.75% mortgage wont look that good in 2022 with to new buyer with $2,000 flood insurance, $15,0000 taxes and a 6 percent mortgage and ten year old sandy renovations showing age. And that is without another flood
It's topping now (calling it), but there's not much any of us can realistically do about it. As long as you remain in the RE market (i.e. need a place to live), all hedges have pretty much been covered. Rental prices are shooting through the roof as the big TBTFs monetize renters now. They're ahead of the curve and know what's coming - squeeze play.
Everyone seems to think interest rates is the major driving factor for housing short term, but I would disagree. Most people confuse the stories they read about the Fed raising interest rates as some direct correlation to mortgage interest rates. They are not the same thing. So if the Fed fund rate does go up 75 or 100 basis points as threatened in September (doubt it), this does not mean much for mortgage interest rates in the short term. However, it is significant at a macro economics level.
Credit in general is an overriding issue. Debt and the ability to pay it back are the problem. Banks borrow essentially at ZERO percent today - you can't make it much more attractive than that. But everyone else (including municipalities) borrow money based on their credit score. Look at Greece.. Venezuela... Argentina... Puerto Rico... Brazil... these economies are a disaster and they cannot pay their bills - and that's not even a near full list. Global commodities are tanking led by oil. The stock market is essentially held up by the government (POMO, QE, "printing money", or whatever you want to call it). Taxes will continue to go up. Healthcare will continue to go up. All while wages, for the people who do work, continue to remain stagnant.
This is not a big picture I look at and think of as a good forecast for housing in Nassau county. Sure we can argue that Nassau will ride NYC's coat tails, but that isn't looking pretty these days. We're finally starting to see crime stats look pretty ominous there. I guess we can blame that on de Blasio and the rest on Obama.
It's a big, scary world.
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