Why Long Island House Values Must Plummet (Hauppauge, Bath: sale, oceanfront)

[zulu400]

Some of these mortgage companies who have tie-ups with real estate companies organize these so called "seminars" where you are totally brainwashed about how "this" is the best time ever to buy a house..... not yesterday and certainly not tomorrow but NOW !

I understand the concept.... they have to sell to make money.... but if you look at some of the prospective buyers who come to those seminars, seems like these companies can influence their thoughts through those jazzy presentations... (love those !)... have you guys ever been to one of those ?

[modmondays]

Originally Posted by zulu400

Some of these mortgage companies who have tie-ups with real estate companies organize these so called "seminars" where you are totally brainwashed about how "this" is the best time ever to buy a house..... not yesterday and certainly not tomorrow but NOW !

I understand the concept.... they have to sell to make money.... but if you look at some of the prospective buyers who come to those seminars, seems like these companies can influence their thoughts through those jazzy presentations... (love those !)... have you guys ever been to one of those ?

No, never been- - I dont sound "Brainwashed"...do I? LOL....

[tomonlineli]

This isnt the first, or last time this has happened.

The funny part of that statement is that it IS the first time, since data has been collected, that the US housing market has depreciated on a national basis over one year.

[Elke Mariotti]

Originally Posted by MikeyKid

I did some MLSLI.com searchs and it's far from perfect... Actually quite disappointed with the UI in general and the way the search criteria results count as a "hit". I get the fact that it's really designed to be a sales tool and when in doubt - "show the listing". It's just not functioning the way I'd like. If a Realtor could help refine these counts it would be appreciated.

Not sure I understand your question/request about "refining these counts"??

Originally Posted by MikeyKid

Anyway, here's some counts for Suffolk county only... to reiterate, there are overlap and dups because of the way the site operates. That aside, this is fairly telling for where the glut of inventory is sitting. Sitting at or above what your average (even above average) first time home buyer can afford. All this inventory needs sales of other inventory in order to feed the huge down payments needed to get these mortgage payments into a reasonable amount... Bear in mind that most of these homes will be in the 7,8,9k tax range - at minimum!

Who is going to buy these homes?

991 - 1m+
321 - 900k-1m
357 - 800-900k
439 - 700-800k
706 - 600-700k
1,127 - 500-600k
1,926 - 400-500k
3,241 - 300-400k

I personally have a few (first time) buyers right now. Yes, they're looking in the lower groups, but they're serious. Long Island is a market unlike any other, for different reasons to different people, and IMHO will always attract buyers, even if the number has gone down at this time.

The big difference I see is that buyers are more prudent when it comes to affordability - hooray!

[I_Have_Your_Wallet]

Originally Posted by zulu400

Some of these mortgage companies who have tie-ups with real estate companies organize these so called "seminars" where you are totally brainwashed about how "this" is the best time ever to buy a house..... not yesterday and certainly not tomorrow but NOW !

It's very simple. It is the best time for a buyer to buy ... FOR THEM AND THEIR WALLETS! Look at it from their point of view. Don't you want to provide their big payday?

[modmondays]

Originally Posted by Elke Mariotti

The big difference I see is that buyers are more prudent when it comes to affordability - hooray!

This very fact is what I mentioned a few posts back - - it will ultimately determine the market. Buyers are the market makers for the forseable future, and if Sellers do not seriously adjust their pricing goals to "The New Reality" they simply will not be able to sell.

Its as simple as that. If buyers dont come to the dance, there is no dance. And if there is no dance, then come NEXT Spring, inventory might be even further through the roof.

As Richard Lefrak said in today's Wall St. Journal: "Excess Inventory is the Mortal Enemy of Housing Prices"

[Jrprofess]

Originally Posted by modmondays

Fair enough -

But IMHO dont see any analytics in your above assessment. I see nothing about the "new economy", nothing about "the new credit", nothing about "the incredibly shrinking work force" and nothing about the "new dynamics of Manhattan and Surrounding communities without Wall Street as we knew at" (and THANK GOD for that!!!!!)

Why is it "fair to say" housing will drop 5-10% with only dumps falling further? What are the market facts over the next 5 years that make your assumptions believable to you?

What are the positive market forces that you see that allows you to believe that we are being cushioned - - when in fact - - Manhattan, Brooklyn and The East End are just starting to enter "free-fall" city?

Alrighty Mr. Academic ....I stopped out of a doctoral program so I can climb up into my ivory tower and get all fancy "statistical" on you if you prefer

You do realize that your assertations, although they have an analytical feel are pretty subjective as well. As for analytics, there is no "new economy/credit" in my opinion, just a return to the sane standards of credit pre-1999/2000. I was raked over the coals in 1999 for my mortgage and debt ratio, and that prudence has returned. It is not new. Regarding excess housing inventory being an issue for a market free fall, I simply think you will see many of these homes simply get pulled off the market, as I mentioned before. Ergo pulling back on inventory. Long Island does not have tracts of "drive until you qualify" gated communities that were slapped up in states like Nevada, Arizona and Florida, many who were simply speculators. I think that is why it avoids a full scale free fall. I do not think it is out of line to think that a 3 br Ranch, full basement, 2 bathroom on .25 acre in Hauppauge for example, maybe listing for 400k now, corrects another 10% as I mentioned to 360, and then stagnates as a price point for 5 years. In that time historical norms for the region may catch up (3.5-5% increases year over year historically). That is just one man's humble opinion...

[Elke Mariotti]

Originally Posted by Jrprofess

Regarding excess housing inventory being an issue for a market free fall, I simply think you will see many of these homes simply get pulled off the market, as I mentioned before. Ergo pulling back on inventory. Long Island does not have tracts of "drive until you qualify" gated communities that were slapped up in states like Nevada, Arizona and Florida, many who were simply speculators. I think that is why it avoids a full scale free fall. I do not think it is out of line to think that a 3 br Ranch, full basement, 2 bathroom on .25 acre in Hauppauge for example, maybe listing for 400k now, corrects another 10% as I mentioned to 360, and then stagnates as a price point for 5 years. In that time historical norms for the region may catch up (3.5-5% increases year over year historically). That is just one man's humble opinion...

IMHO by and large, this sounds like a fair assessment...

[zulu400]

Guys... someone please explain this to me...

Jump in Home Construction Raises Hopes - WSJ.com

This article sites that there is approx 14 months of inventory... I guess for the entire country.... anyway, why would builders start building new houses now ? Is 14 months the average lag time for the home builders.... looks like the construction may be happening in certain pockets but this article is not clear on that (what do you expect ?).... know of any new constructions going on in Suffolk ?

Also on a side note what exactly constitutes a housing start ? I mean is it when someone submits a plan for a house/condo "to be built" or is it when the house/condo is completely finished ?

[mathjak107]

those seminars remind me of when i was first starting out as an investor and we had the wave of no money down seminars... you remember the likes of carlton sheets and those other loosers...

that was a plan that worked great- until it didnt then it caved in like a house of cards.... everyone of those high profile authors and seminar givers went bankrupt at some point from following their own goofy advice