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What do you think is going to happen re the economy's effect on the LI real estate market? Are people going to likely hold off on selling or might many people try to sell sooner to get in on the last of the high prices? Tom Moser and realtors esp, any thoughts? What trends are you seeing?
Do you think prices will most likely stablize or are we truly looking at a huge market decline, or market correction as people say?
Last edited by Glad2BHere; 09-27-2008 at 06:48 AM..
I"m curious to hear what's happening on the front line too (great thread, by the way).
My amateur guess is that it's too early to know what's going to happen. The primary factor anticipated in driving prices down were people facing bankruptcy due to nightmare mortgage terms that they couldn't keep up with. Thus they'd either have to sell for whatever the could get or their lender would seize the property and sell if off at a "best offer" level to move it off their books. However if the government is going to purchase these assets its likely they'll make it easier for people to stay in their homes. This would greatly reduce the urgency to sell.
Of course even for those cleaner transactions out and about where a well-qualified buyer is attempting to purchase a home from someone who is selling for normal reasons (e.g. retirement, job relocation, etc.) it won't be quite so simple anymore. Banks don't have access to funds like they've typically had and the values of homes are likely to be scrutinized (another major factor in this mess, assessors pretty much agreed with whatever the offer price was to move the loans along). So even if you're trying to buy a home for $400k with 20% down it's going to be difficult to secure financing for the remaining amount.
And in another month we'll be heading into the traditionally slow holiday season. I suspect that the uncertainty about the overall economy plus the upcoming election might make that slow period start a little sooner this year than previously. We haven't seen any steep decline in listing prices in the mid-500s to low/mid - 600s range though, even throughout the summer. It would be nice if that would change (we're currently buyers) but IMO most sellers will probably hold back from listing (unless they absolutely can't wait) until March in order to see how everything shakes out. If I was a seller that's what I would do.
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My fiance is guessing that there will be more foreclosures in the winter when people will have to pay to heat their homes. We're looking to buy a foreclosure, but don't know if that will happen for another few years. We're thinking of getting a co-op in eastern Queens. We aren't totally sure what we should do.
Obviously home prices on Long Island will have to adjust to the market variables; interest rates, metro employment rates as well as median family incomes, energy prices, inflation on basic commodities, and tightening lending standards. Also, will the bailout even work?
There seems to be perfect economic storm now brewing which has combined high fuel prices, inflation on basic goods, tightening credit markets and stagnant family incomes. Therefore, it seems reasonable to expect home prices to decline further. This will happen despite whatever bailout Congress puts together. It is quite possible that home prices will continue to fall by at least another 10%, perhaps as much as 20%.
The areas that will see the biggest declines would be those furthest from the New York City. However, desirable areas closer to NYC will be most likely to retain their values and possibly increase in value. In fact the best places to buy will be in Brooklyn and some parts of Queens.
What do you think is going to happen re the economy's effect on the LI real estate market? Are people going to likely hold off on selling or might many people try to sell sooner to get in on the last of the high prices? Tom Moser and realtors esp, any thoughts? What trends are you seeing?
Do you think prices will most likely stablize or are we truly looking at a huge market decline, or market correction as people say?
Hyper-inflation would seem most likely course of events.
Obviously home prices on Long Island will have to adjust to the market variables; interest rates, metro employment rates as well as median family incomes, energy prices, inflation on basic commodities, and tightening lending standards. Also, will the bailout even work?
There seems to be perfect economic storm now brewing which has combined high fuel prices, inflation on basic goods, tightening credit markets and stagnant family incomes. Therefore, it seems reasonable to expect home prices to decline further. This will happen despite whatever bailout Congress puts together. It is quite possible that home prices will continue to fall by at least another 10%, perhaps as much as 20%.
The areas that will see the biggest declines would be those furthest from the New York City. However, desirable areas closer to NYC will be most likely to retain their values and possibly increase in value. In fact the best places to buy will be in Brooklyn and some parts of Queens.
Maybe, but I think alot of the stuff out East was really,really undervalued pre 9/11.
I doubt I'll see my home at 125k again but if I do, Ill buy another one in a heartbeat.
Stuff around here has been going sideways for the last year.
I think alot of the pains been priced in already.
Remember house prices didnt really go up....it was the dollar that went down.
I doubt I'll see my home at 125k again but if I do, Ill buy another one in a heartbeat.
I don't think you will see that severe of a drop, but a 10% or 20% drop is probable. I mean how could home values double in just eight years since 2000. Did family house hold incomes double in the same time period? Was there little or no inflation?
Typical appreciation is about 3% or 4% a year. Given those numbers, a home on Long Island, since 2000, should have only gone up in value by about 24% to 32%. Thus a $200,000 home in 2000 should be worth $250,000 to $270,000 now.
Work out the numbers for your home based on 2000 valuation and multiply by 24% to 32% to get an expected true value for your property. I think it might be prudent to expect home values to sink for another couple of years until such a market equilibrium is reached.
Although Congress and the Federal Reserve is trying deperately to induce to inflation. So the opposite might happen and home values might soar, but it won't matter because income will lag. The bailout strategy is to buy out the bad debts and then inflate away the debts by paying of todays debts with cheaper dollars in the future.
However, if you don't plan on selling in the next few years what difference does it make. Your home is a place to live and shouldn't be used as a debit card. Just keep paying down your mortgage and make needed home improvements.
This whole situation has got me depressed because our government has been revealed to be so corrupt and inept. We are on the march towards oblivion.
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This whole situation has got me depressed because our government has been revealed to be so corrupt and inept. We are on the march towards oblivion.
It sure is frightening.
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