Monthly Archives: May 2012

Armonk NY Homes | House Poor: Hope, Faith and Equity

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Have you ever seen someone tease a dog?  It doesn’t take long to turn a perfectly friendly pooch into a nasty, mean mongrel.

That’s exactly what happy-days-are-here-again real estate forecasts do to me. When I hear that home values are finally going to go up, I get all excited.  I look up the value of my home online and figure out how far I have to go to get above water (I’m deeper underwater than the Titanic).   Even though it will take years to restore any positive equity in my home, I’m feel excited.  At last, things will be going in the right direction.  I do a little happy dance and I take my wife Felicity out to dinner at IHOP to celebrate.

Then I wait.  And wait.  And wait some more, checking my home’s value every day, only to find out that it was a false alarm.  Sales hadn’t turned out like the experts thought they would.  Or a new bunch of foreclosures screwed things up.  Or maybe they hadn’t calculated something quite right and got a little too optimistic.  The first time this happened I was disappointed.  The second time, I was annoyed.  By the sixth time, I had turned into an attack dog, foaming at the mouth.

So you can imagine how I reacted when not one but two bona fide real estate experts announced the other day that THE RECOVERY HAS BEGUN.  Oh boy.  But in two weeks, my home value actually bumped up a little.   In six weeks, it was up even more and by the end of two months, I was recouping lost ground for the first time in six years!

My real estate agent, Bea Meriwether, sent me a special edition of her newsletter.  The local market was going crazy.  All the big real estate investors were scrambling to snap up the remaining bargains before they disappeared.  Home buyers who have been sitting on the fence for months were calling them in panic to find how much time they had to put a contract on something.  “I almost feel sorry for them,” she said. This time I took Felicity to Red Lobster for Legendary Lobster Night and we had both had Key Lime pie for dessert.

What happened next is almost too sad to tell.  The next morning, my home value stopped rising.  For a week it didn’t budge.  I figured the data was slow since there was so much action.  When it finally moved, it was going the wrong way.  I wanted to cry when it didn’t stop where it had started to rise weeks earlier but kept falling.  The so-called experts, the same guys who were all happiness and glee, now wrung their hands over the “double dip” in home prices.  Those guys can even make ice cream sound awful.

So Bea explained it all to me.  Seems that when priced rose, lots of people who have been waiting for years to sell their houses listed them for sale.  She called it “pent-up supply”.  When there were too many houses for sale, sellers started cutting prices and the miniboom was over.  I felt stunned and betrayed.

“Homer, have faith,” said Bea.  “Someday soon all the demographic forces and the market forces will come together like a perfect storm.  The next generation will wake up one morning and want to buy homes.   We’ll look back at these times as a temporary blip in an upward slope. ”

Part of me truly wanted to believe her.  However, another part of me felt like howling at the moon and looking for some living room furniture to shred.

via realestateeconomywatch.com

Realtors® Confidence Index: Residential Market Recovery Continues | Pound Ridge NY Realtor

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The recent Realtors® Confidence Index survey shows that the residential real estate markets continue to recover. Respondents continued to note problems associated with real estate transactions:

  • Obtaining a mortgage continues to be difficult for individuals with lower credit scores or individuals with non-standard credit characteristics, e.g., self-employed.
  • Bargain hunters and low-price bids continue.
  • The short sale process continues to be slow and frustrating.
  • Pricing continues to be a challenge.
  • The appraisal process continues to be a problem.

However, fewer respondents noted major problems than had previously been the case. In contrast, a growing number of respondents indicated a growing number of cases of multiple offers, fewer seller concessions, low inventories, and some increase in buyer interest. Many respondents noted that correctly priced properties sell quickly.

The graph for “Total Home Sales” on a twelve month roll (i.e., total sales for the current and previous 11 months reported monthly) shows a market achieving stability from a sales viewpoint, with modest improvement expected based on continued economic and employment expansion. This is consistent with the survey conclusions.

The media has discussed home prices in detail for the last four years. The graph “Prices By Month” indicates that home prices have been headed towards stability. NAR’s forecast is for the attainment of stable prices this year.

The available data indicate continued expansion in residential real estate markets. Like all forecasts, this conclusion is subject to market risks affecting the outlook:

Potentially Negative News

  • The Economic Recovery is slow and weaker than normal: Unexpected and unfavorable economic news (i.e., a European bond default, an additional run-up in gas prices) could have a negative impact on the recovery.
  • Credit standards imposed by financial institutions in making a mortgage are reported as excessively stringent.
  • Job gains are well below normal.
  • Consumer Confidence is lower than would otherwise be expected.

Potentially Positive News

  • Falling Inventories of homes for sale.
  • Stabilization of Distressed Sales in the neighborhood of 30 to 35 percent.
  • Home Affordability: Low interest rates and attractive prices continue to facilitate home purchases.
  • Demographics: Sales are at a level of approximately 10 years ago, but the population has increased significantly.

The economic recovery is clearly weaker than the historical norm, but appears to be proceeding. Realtor® confidence and price expectations are higher than was the case a few months ago, rising rental rates have favorable implications for home sales, and time on market continues to decrease. Prices and interest rates continue to be lower than has been the case in the past. These are the reasons that we continue to view the outlook as favorable for home purchases.

Given that the typical homeowner will occupy a house for approximately 8 years and that home ownership is basically a lifestyle decision, one can make a very good case that this is a good time to buy a house, remembering that staying within a reasonable budget and acceptable mortgage is important. Additional information on a variety of topics related to current residential market conditions may be found at http://www.realtor.org/reports/realtors-confidence-index.

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via economistsoutlook.blogs.realtor.org

Bedford NY Real Estate for Sale | New Home Sales

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In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses new home sales.

  • Continuing good news regarding the housing market as new home sales rose in 3.3 percent in April from the prior month and up 9.9 percent from one year ago.  The improvement is roughly in line with yesterday’s figure on existing homes.
  • The latest median price of newly sold homes was $235,700, which is an increase of 4.9 percent from one year ago.  New homes nearly always sell at a higher price than existing homes.  But the gap has opened wider in recent years as many existing homes, particularly the foreclosed properties, were selling below the replacement cost.  That could also imply faster price recovery in the future for existing homes.
  • There are two key differences between new and existing home sales.  First, new home sales are not closings but are new contract signings.  There is no official figure on closed sales of new homes, but one would expect that all the newly built ones will eventually sell at some point despite short-term contract fallouts.  Second, new homes comprise a very small market share.  Normally, new homes would make up about 15 percent of total home sales.  In recent years, new homes have made up only 5 to 8 percent of all home sales.
  • New home sales are likely to rise 25 percent this year and another 20 to 30 percent jump next year.  Inventory levels are very thin.  Housing starts suffered much more than the existing homes market and new home sales are now primed for a stronger recovery.  Unfortunately, the larger builders are likely beneficiaries at the expense of small builders because of very restrictive lending for construction loans to smaller-sized homebuilders, while the big builders can tap Wall Street funds.  Larger banks getting bigger and larger builders getting bigger at the expense of smaller players may be the unintended result of the Dodd-Frank bill.

via economistsoutlook.blogs.realtor.org