LI Home Prices Far From Reality? um...yup! (Union, Westbury: 2010, renting)

[totallyfrazzled]

Originally Posted by I_Love_LI_but

Don't forget the forced "gratuity" check of $300.00 +/- that they command you to write personally to the title closer! (They don't do this other places.)

The going rate now for the title closer gratuity at Long Island closings is $100 ... not $300.

If your attorney told you to write a gratuity check for $300 you should have screamed bloody murder right there at the table because that is WAAAAY above and beyond the norm!

[djdairyp]

" ... Prices weren't just down 19% over the past year. They fell 2% just between February and March. And it's not the worst-hit markets that worry me the most -- Phoenix is down 53% from its peak, Miami 47%. That smells of capitulation. It's the other markets. New York and Boston are only down 20%. Denver's only down 14%.


Overall the ten- and 20-city Case-Shiller indices are merely back to mid-2003 levels. After the biggest boom and bust on record, history suggests things don't stop getting worse until they've gotten a lot worse than that."


Is Your Home A Good Investment? - WSJ.com

[thepokerdepot]

Originally Posted by djdairyp

" ... Prices weren't just down 19% over the past year. They fell 2% just between February and March. And it's not the worst-hit markets that worry me the most -- Phoenix is down 53% from its peak, Miami 47%. That smells of capitulation. It's the other markets. New York and Boston are only down 20%. Denver's only down 14%.


Overall the ten- and 20-city Case-Shiller indices are merely back to mid-2003 levels. After the biggest boom and bust on record, history suggests things don't stop getting worse until they've gotten a lot worse than that."


Is Your Home A Good Investment? - WSJ.com

I read this Article and the comments:
Although there are flaws with his calculations,..The point is, "How will real-estate settle within buying/renting ratio. Nobody will know,..I predict real-estate prices will settle soon,..and vary great between high and low. Just like gas prices in last 2 years. You may see prices go up soon and go down more than May 2009. Nobody will know for sure until it happens because there are some many variables.
The comment below is very interesting for those who believe everything they hear as gospel.::

While the article is much needed, as are the comments, there are still some missing factors:
First, the IRS-mortgage interest deduction is NOT equal/constant. At the beginning of the mortgage most of the payment is deductable interests, great if you have income. At the end of the mortgage most of the payment is principal, almost usless against your income. You need to understand the interest/principal "cross-over point" in your home & tax planning - AND, especially when you retire.
Second, location: Here in Phoenix "They" tell you that homes have lost 36% of their value, this year. Not quite true - some areas have lost little or NONE of their value since 2006-7 - some areas have lost 50% or more of their value, just since last July 08.
Third, many assume that they can just buy Their Home and forget it. Just as some assume that you can buy a foreclosed home, as is, where is..., not even close to being true. Not all roofs will, and appliances will not, last the full life or your mortgage, even if YOU do.
As Paul Harvey asked U.S. - do you know..., the rest of the story.

[djdairyp]

While the article was half about how a home 'investment' makes nominal returns over time and has many extra costs associated with it, I thought the author made an interesting point that NY and Boston are on the radar as they have not seen the same declines seen elsewhere.

I am not saying we will get the same declines as the worst places, but it seems there needs to be more correction.

Some would argue that its different here as there was not as much growth and we are somehow insulated from this... well we were not insulated from the massive gains and bubble, and money was flowing wildly then so why should we be insulated from the declines and contraction seen elsewhere as well.

[I_Love_LI_but]

Originally Posted by totallyfrazzled

The going rate now for the title closer gratuity at Long Island closings is $100 ... not $300.

If your attorney told you to write a gratuity check for $300 you should have screamed bloody murder right there at the table because that is WAAAAY above and beyond the norm!

You said your nephew paid $175 to tip the title closer in January or so. I figured it must be going up like everything else ... not down! Are you sure it's gone down to $100?

Remember this thread (nobody in other parts of the country who answered the thread had even heard of tipping the title closer):

http://www.city-data.com/forum/mortg...n-closing.html

[Elke Mariotti]

Originally Posted by I_Love_LI_but

You said your nephew paid $175 to tip the title closer in January or so. I figured it must be going up like everything else ... not down! Are you sure it's gone down to $100?

Remember this thread (nobody in other parts of the country who answered the thread had even heard of tipping the title closer):

http://www.city-data.com/forum/mortg...n-closing.html

At my last closing, the buyer's attorney advised his clients to write a check for $150

[thepokerdepot]

Originally Posted by djdairyp

While the article was half about how a home 'investment' makes nominal returns over time and has many extra costs associated with it, I thought the author made an interesting point that NY and Boston are on the radar as they have not seen the same declines seen elsewhere.

I am not saying we will get the same declines as the worst places, but it seems there needs to be more correction.

Some would argue that its different here as there was not as much growth and we are somehow insulated from this... well we were not insulated from the massive gains and bubble, and money was flowing wildly then so why should we be insulated from the declines and contraction seen elsewhere as well.

Seems areas that experienced a moderate to high building rate of the last few years are being hit harder,...Agree?
Although I would like to see prices on the Island go down another 20%,..as an investor,..I am picking up a few diamond real-estate properties priced well,.."well" as in compared to the last 2 months sales.

Although some have picked up a few "good shaped" foreclosures here,...( you need an iron stomach ),..I think many others are finding it less stressfull to rent now than buy.

Long Island will have another hill to climb in coming years,..I believe property taxes over 2% value of homes are counter productive to our developement towards a fair and balanced economic society.

It simply doesn't make sense to buy real-estate as primary residence,..and hasn't since School/Property taxes have risen.

I lived in L.A. for 3 years in the mid-90's and seen what Long Island will become,..And it's not pretty. Uncontrolled rises in School taxes will be the bullet in the foot.

When I see the signs at the budget votes,.."Do it for the Kids", I vote "No" because I don't want my kids or anybody's elses', to live on a broke Island where they will never afford a place to live. Poor Kids.

Your thoughs?

[djdairyp]

Originally Posted by thepokerdepot

Seems areas that experienced a moderate to high building rate of the last few years are being hit harder,...Agree?
Although I would like to see prices on the Island go down another 20%,..as an investor,..I am picking up a few diamond real-estate properties priced well,.."well" as in compared to the last 2 months sales.

Although some have picked up a few "good shaped" foreclosures here,...( you need an iron stomach ),..I think many others are finding it less stressful to rent now than buy.

Long Island will have another hill to climb in coming years,..I believe property taxes over 2% value of homes are counter productive to our development towards a fair and balanced economic society.

It simply doesn't make sense to buy real-estate as primary residence,..and hasn't since School/Property taxes have risen.

I lived in L.A. for 3 years in the mid-90's and seen what Long Island will become,..And it's not pretty. Uncontrolled rises in School taxes will be the bullet in the foot.

When I see the signs at the budget votes,.."Do it for the Kids", I vote "No" because I don't want my kids or anybody's elses', to live on a broke Island where they will never afford a place to live. Poor Kids.

Your thoughs?

Definitely agree that the 'building growth' locations got hit the worst. This is clearly shown by the data. Also agree the prospect of renting is a nice comfort zone for many.

Found this little chart today

The Mess That Greenspan Made: More record home price declines

Its interesting to see that NY is now at the top of the Case Shiller index, not really a good place to be. Its declines have been slower, but have been happening and would seem to last longer and continue the downward trend for awhile. I personally believe this is necessary to make the housing market sustainable and allow a return to affordability encouraging ownership.

The property tax question is a real sticky one. If prices do decline even further as data suggests, the high taxes become even more burdensome and out of line, which will put a lot of pressure local govt to do something about it. When someone buys a new house and their tax burden is equal to or possibly more than the mortgage itself, red flags start to go up.

How this problem is fixed is hard to imagine and would probably take massive reform across the board. It would be hard to cut current levels of school and other budgets but future limitations on growth could be possible. Increased healthcare and pension contributions from all civil servants across the board? ... couldn't really get away with eliminating it all together for current employee's, but creation of new tiers in the state system for new employee's entering public service with more restrictions. LI income tax?

Who knows, but when looking at the situation logically, it does seem something major has to change in the coming years, the system simply cant sustain itself. I am not in favor of massive 'cuts', but do see the need for more fair of a pay for benefits system ... admittedly I am biased on the matter, but I do see the need for a slowing of the bleeding and can admit that unchecked taxes have the propensity to become outrageous.

[thepokerdepot]

Originally Posted by djdairyp

Definitely agree that the 'building growth' locations got hit the worst. This is clearly shown by the data. Also agree the prospect of renting is a nice comfort zone for many.

Found this little chart today

The Mess That Greenspan Made: More record home price declines

Its interesting to see that NY is now at the top of the Case Shiller index, not really a good place to be. Its declines have been slower, but have been happening and would seem to last longer and continue the downward trend for awhile. I personally believe this is necessary to make the housing market sustainable and allow a return to affordability encouraging ownership.

The property tax question is a real sticky one. If prices do decline even further as data suggests, the high taxes become even more burdensome and out of line, which will put a lot of pressure local govt to do something about it. When someone buys a new house and their tax burden is equal to or possibly more than the mortgage itself, red flags start to go up.

How this problem is fixed is hard to imagine and would probably take massive reform across the board. It would be hard to cut current levels of school and other budgets but future limitations on growth could be possible. Increased healthcare and pension contributions from all civil servants across the board? ... couldn't really get away with eliminating it all together for current employee's, but creation of new tiers in the state system for new employee's entering public service with more restrictions. LI income tax?

Who knows, but when looking at the situation logically, it does seem something major has to change in the coming years, the system simply cant sustain itself. I am not in favor of massive 'cuts', but do see the need for more fair of a pay for benefits system ... admittedly I am biased on the matter, but I do see the need for a slowing of the bleeding and can admit that unchecked taxes have the propensity to become outrageous.

I hope to never see the Real-Estate market ever bubble this violently in my life time again.,....very ugly chart. But I try to believe that Real-Estate equity will act like a rubber mat,..rebounding the dropped bowling ball or atleast stopping it from going through the ground. I firmly believe we wont see a decrease of more than 10% in the next 12 months.

As far as what can be done about property taxes,....reform?
Now,..I'm a happy Union worker,...I work on State jobs,..Schools,..Hospitals,..County Buildings,...But this only accounts for 10% of work,..and mostly when things are slow in the business sector.
Unions motto,..Fair days work for fair pay.

Now,..I don't have a big gripe for County workers,..most make 50k a year plus benifits and it keeps the middle class stable.
I might have a little gripe with Police,..I think the retirement package is a bit extreme.

The fat is the Teachers,..hate to say it,..but it's the fact,....80% of your school tax goes to Teachers and their benifits. If Teachers where to take a 30% decrease in Union package,.(Health Plan,..Annuity,..R Fund),..we would see a 17% decrease in your property taxes.

So your 14k tax bill would be 11.6k
This would add 50k in equity to your home and all Long Islanders would see a similiar much needed increase in equity,...incuding those who work for the School system.

And the best part,..your kids might one day be able to buy a home next to you.

Three of my cousins work for the School system,..they all started in Queens,..and when two of them got jobs on the Island it was like they hit the Jackpot.

I hope reform is coming but most importantly people understand why we need to reform so we don't make the same mistake twice.

[modmondays]

Originally Posted by djdairyp

Definitely agree that the 'building growth' locations got hit the worst. This is clearly shown by the data. Also agree the prospect of renting is a nice comfort zone for many.

Found this little chart today

The Mess That Greenspan Made: More record home price declines

Its interesting to see that NY is now at the top of the Case Shiller index, not really a good place to be. Its declines have been slower, but have been happening and would seem to last longer and continue the downward trend for awhile. I personally believe this is necessary to make the housing market sustainable and allow a return to affordability encouraging ownership.

The property tax question is a real sticky one. If prices do decline even further as data suggests, the high taxes become even more burdensome and out of line, which will put a lot of pressure local govt to do something about it. When someone buys a new house and their tax burden is equal to or possibly more than the mortgage itself, red flags start to go up.

How this problem is fixed is hard to imagine and would probably take massive reform across the board. It would be hard to cut current levels of school and other budgets but future limitations on growth could be possible. Increased healthcare and pension contributions from all civil servants across the board? ... couldn't really get away with eliminating it all together for current employee's, but creation of new tiers in the state system for new employee's entering public service with more restrictions. LI income tax?

Who knows, but when looking at the situation logically, it does seem something major has to change in the coming years, the system simply cant sustain itself. I am not in favor of massive 'cuts', but do see the need for more fair of a pay for benefits system ... admittedly I am biased on the matter, but I do see the need for a slowing of the bleeding and can admit that unchecked taxes have the propensity to become outrageous.

Good, thoughful post....