NY Housing Article: Any thoughts? (Accord: how much, home sales, neighborhood)

[propain]

Originally Posted by Burb

What's going to happen in 6 months? Inventory levels aren't climbing anymore, prices are pretty stable , sales cycles are just slower than they used to be. This link below shows the last few years of inventory levels and asking prices on LI, The theory that there is a dam that is waiting to break does not hold water, pun intended. Asking prices and inventory levels have held firm or improved YOY, houses are being bought and sold every day.

I have a flawless crystal ball. In 6 month the market will be either a little better, or a little worse. The idea of a finite bottom to housing deflation is a red herring. There is no absolute bottom, we are in a cycle favorable to the buyer. Today, as was 5 years ago, and as will be in 5 years, there are great deals to be found right next to overpriced and current market priced homes.

Buy if it makes sense, rent if it doesn't, but don't count on a landside correction.

HousingTracker.net | Median Home Asking Price & Inventory Data for Long Island, New York

Well said. In 6 months interest rates will be higher and house prices may fall 5% at most. Pretty much putting you in the same, if not worse situation you are in now if you can afford a home.

I said it before and ill say it again, if you cant afford a home today on LI you most certainly wont be able to afford one next year either.

This waiting for the water well to dry up so you can collect the pennies is not going to happen.

[ClarkStreetKid]

Upgrades don't mean diddly if no ones buying.

mprovement 1. Upscale siding replacement costs $13,177 and adds $11,424 to your home's value, or 86.7% of the cost.

Improvement 2. Adding a wooden deck costs $10,601 and adds $8,676 in value, 81.8% of the cost.

Improvement 3. Minor kitchen remodeling costs $21,246 and adds $16,881 in value, 79.5% of the cost.

Improvement 4. Replacing windows with midrange wood windows costs $11,512 and adds $8,946 in value, 77.7% of the cost.

Improvement 5. Midrange bathroom remodeling costs $15,899 and adds $11,857 in value, 74.6% of the cost.

Improvement 6. Renovating an attic into a bedroom costs $48,398 and adds $35,694 in value, 73.8% of the cost.

Improvement 7. Finishing a basement costs $61,011 and adds $44,467 in value, 72.9% of the cost.

Improvement 8. Adding a second story costs $146,538 and adds $103,553 in value, 70.7% of the cost.

Improvement 9. Adding a garage costs $57,272 and adds $38,161 in value, 66.6% of the cost.

Improvement 10. Adding an upscale bathroom costs $74,345 and adds $49,100 in value, 66.1% of the cost.

Unless I'm misreading this, none of the upgrades add more to the value of the home than you actually put in. The article seems to make a case for not redoing that old kitchen.

[propain]

Originally Posted by ClarkStreetKid

Upgrades don't mean diddly if no ones buying.



Unless I'm misreading this, none of the upgrades add more to the value of the home than you actually put in. The article seems to make a case for not redoing that old kitchen.

That is correct. I thought that was obvious. If I put in a 100K in an area where 100K kitchens are common my return on my investment will be about 75% of the kitchen cost. Thus if my home was valued at 400K and I put in 100K into the kitchen my home would now be values at 475K.

The same applies for other upgrades. The list is showing the return on your investment. The very thing the guy above was saying meant nothing.

1. I'm not selling. I put them in to enjoy them. I dont plan on moving for 20 years more at least.

2. If I was selling my granite kitchen would sell my house faster than your non granite kitchen. People LOVE a nice kitchen. That and bathrooms.

[ClarkStreetKid]

But you're not getting a return on your investment, you're just getting a nice kitchen. Also if you upgrade now, don't sell for years and tastes change you once current kitchen may actually work against you. Those old avocado and burnt orange kitchen appliances you see in older homes were once stylish and state of the art.

[seren77]

Originally Posted by propain

Well said. In 6 months interest rates will be higher and house prices may fall 5% at most. Pretty much putting you in the same, if not worse situation you are in now if you can afford a home.

I said it before and ill say it again, if you cant afford a home today on LI you most certainly wont be able to afford one next year either.

This waiting for the water well to dry up so you can collect the pennies is not going to happen.

I have to say this is bad advice. I don't know where you get the 5% number, but what you are suggesting is that affordability will actually go down.

My question to you would be: Which economic indicator suggests such an outcome? For all we know, affordability is still low compared to historical trends; we are in a recession so less people actually have money to make such a purchase; unemployment rates are still going up decreasing the demand further; banks are unwilling to make mortgage commitments despite government efforts.

Nothing suggests that housing will be somehow less affordable in the near future. Sales and prices are still going down (year to year comparisons) despite low interest rates plus government incentives such as 8K tax breaks. Any increase in the interest rates will pressure the prices even further down at a faster rate. An arbitrary number such as 5% undermines this effect dramatically.

Let's not kid ourselves. Housing will not recover before the rest of the economy recovers. There is no sign of such a quick recovery from this recession.

[Egobop]

I believe another problem with the housing issue is just the supply and demand end of it. I think the pushing of everyone to own a home that was going on lead to less people that need one. This obviously makes more homes available for sale than people that are actually in the market for one. This means less first time home buyers. I believe there are more people looking to sell their home and buy another one than there are people whom do not own a home looking to by their first one. If the person looking to sell their home to buy one somewhere else can't sell it he or she is stuck where they are. California is one of the worst places as far as the values of homes go. Why? Maybe it has something to do with the fact that the state is just about bankrupt so who would want to relocate there from another state and buy a home? If anything a lot of the people there are looking to sell their home to get out of the state which means that other home owners there will not be selling theirs to buy another one in the same state. The way I see it, Long Island will eventually be suffering the same fate. I know when I finally do sell my home it will be to move away from here altogether, not to buy another home on Long Island. I know of two families whom I was friends with whom sold their homes near my house within the last year. One family moved to Virginia and the other to Colorado. Long before I moved to Long Island from Queens people from the city would move to Long Island to get away from the hustle and bustle of the city but still be close enough to work there. The houses were actually cheaper than the houses in nice areas in the city as well. The way things have turned out now is that in some areas the houses are obviously more than they are in the city and even when they are cheaper the high taxes make the mortgage the same as a more expensive home elsewhere. I also know that when I first bought my house around twelve years ago the traffic I encountered going into the city was not as bad as it was a few years after. This now makes people whom figure a one hour to one hour and thirty minute drive to work in the city is not so bad not want to move out here when the drive could be as long as two hours or more going to and from the city. I have no statistics or article to support my theory but I can say that I do personally know a number of people with homes for sale and can honestly say that none of those same people are looking to buy another home on Long Island. None of them are even looking to buy another home in this state.

[MiddleIslander]

Originally Posted by propain

Well said. In 6 months interest rates will be higher and house prices may fall 5% at most. Pretty much putting you in the same, if not worse situation you are in now if you can afford a home.

I said it before and ill say it again, if you cant afford a home today on LI you most certainly wont be able to afford one next year either.

This waiting for the water well to dry up so you can collect the pennies is not going to happen.

Do you have any justification for all of your figures other than gut feeling, denial, and wishful thinking?

Go ahead, lay it all out there. I'm sure it's good.

[propain]

Originally Posted by ClarkStreetKid

But you're not getting a return on your investment, you're just getting a nice kitchen. Also if you upgrade now, don't sell for years and tastes change you once current kitchen may actually work against you. Those old avocado and burnt orange kitchen appliances you see in older homes were once stylish and state of the art.

You are absolutely getting a return on your investment. Not only are you able to upgrade and enjoy your home, but the money you put into it will increase you home value by a % based on the type of work you put it.

The thing your looking for is profit. No, there is no profit on your investment. Putting money into your house is a savings plan for the future. Its one of the best investments you can make if done right.

Cars on the other hand are the worst possible thing you can buy. You purchase one and it does nothing but depreciate and its worth nothing. That is not the case with home upgrades. Putting work into your home guarantees you keep your investment in top condition. In some slim cases the return might even be profit. Depends on the area ive heard of increases in investments on bathroom of 110%.


In the end you have to live in it. If you don’t want to put money into your home to make it nice, that’s your choice. I choose to upgrade and make it beautiful. When I sell it the money I put into it will be long paid off but and at the same time I will have enjoyed living there. My equity will also have increased.

[propain]

Originally Posted by MiddleIslander

Do you have any justification for all of your figures other than gut feeling, denial, and wishful thinking?

Go ahead, lay it all out there. I'm sure it's good.

I stayed in a Holiday Inn last night.

Yes, I have plenty of justification. I really don’t care to give you a lesson in finance though so you will just have to take your chances.

Is your opinion based on what everyone else tells you and wishful thinking?

What you people fail to understand is I have no stake in the direct results of this market correction. I am not moving or selling for at least another 20 years. In 20 years my home will be worth WELL over 1 million and I will cash out on 100% of whatever its worth. More is better but its all profit at this point. I make a very solid living and im not in any financial trouble at all.

Im putting out my theory on what I feel will happen based on my training in the field. Take it or leave it. The funny part is im already correct because you people are here WISHING and HOPING that home prices drop and they aren’t. If you were right you wouldn’t be here complaining.

You will not see huge 40% drops in housing on LI. LI housing will never be as affordable as you want it to be. Its been that was for 30 years and this crisis will not and is not here to serve your agenda of plummeting prices. You will not see Pre 1995 prices on homes. You need to wake up and smell the coffee. Most of you need this good dose of reality.

[zulu400]

Originally Posted by propain

I really don’t care to give you a lesson in finance though so you will just have to take your chances.

Take it easy my friend.... seems like you prefer to hang out at the extremities.... 5% in one post and 40% in the other.... way to go....
But more important I feel is that you are having a hard time coping with people who are not in agreement with your views.
You feel housing has hit the bottom, others feel it hasn't.... no big deal.... you got one thing right.... no one here needs a lesson in finance from you or anyone.... just viewpoints or thoughts are good enough.... exactly what the OP asked for !!