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North Salem NY

The Federal Reserve Board’s big mistake | North Salem Real Estate

September 24, 2018

The Federal Reserve’s main interest rate will likely vault over their preferred inflation gauge this week

The Federal Reserve’s main interest rate will jump past the central bank’s preferred inflation measure for the first time in a decade this week, when policymakers announce a widely expected rise in interest rates.

The Fed funds rate– the cost of borrowing “excess” Fed reserves overnight, unsecured by collateral by banks and other financial institutions – will rise above the central bank’s favorite measure of the US economy’s inflation rate, the “personal consumption expenditure” index, for the first time since September 2008.

The Fed and central banks around the world slashed interest rates in the wake of the crisis, with some even introducing negative interest rates for the first time in history. But with the economic recovery gaining ground, the Fed started raising interest rates in 2015, and other central banks are now following in tightening monetary policy.

“The question is what rate is high enough to slow the economy,” said Anne Mathias, a senior strategist at Vanguard. “We’ll hopefully know it when we see it.”

The US central bank has increased its interest rate target range twice already this year, to 1.75-2 per cent. That has raised the Fed funds rate – the primary target it attempts to move with its interest rate corridor – to a 10-year high of 1.92 per cent. 

Fed raises rates despite trade war concerns The Fed is widely expected to lift its corridor by another quarter percentage points when it meets on Wednesday, and that will probably in tandem lift the Fed funds rate to about 2.17 per cent. 

That means that the “real”, inflation-adjusted US interest rate will be in positive territory again, and investors and analysts are now questioning how much further the Fed will raise interest rates. 

Indeed, another rate increase in December is widely expected, which will probably lift the Fed funds rate above the ‘core’ inflation rate that excludes food and energy costs. However, opinions differ significantly on how much the central bank will tighten policy in 2019.

“This is the riddle they will have to solve in 2019,” said Jim Caron, a bond fund manager at Morgan Stanley Investment Management. “There’s little danger of an inflationary breakout, so why keep hiking?”

Markets are starting to price in the possibility of two more quarter-point increases in the Fed’s interest rate in 2019. The Fed has indicated that it will raise rates three times, while Goldman Sachs’ economists predict the central bank will have to lift rates four times to prevent the economy from overheating. 

The US stock market bet the Fed killed the economy through the October-December 2018 quarter. The real estate economy is contracting because of this.

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New Home Sales Nudge Forward | North Salem Real Estate

The number of new homes sold in November increased by 4.3% from a downwardly revised October level to 490,000 on a seasonally adjusted annual basis. On a year to date level, sales are up 14.5% from the eleven month total in 2014. Inventories of new homes also increased to 232,000, the highest since January 2010 even as builders continue to seek workers and lots.

New Home Sales – Monthly and Annual
The increases in sales and inventories signifies continued builder optimism and customer demand growth. However, the levels remain disappointing given the amount of pent up demand and the low level of turnover in existing home sales. Most new home sales are to existing home sellers so the weak sales of existing homes and low inventories of existing homes produces fewer potential new home buyers. On the positive side, home equity is up, employment continues to increase and mortgage rates remain low by historic standards. On the negative side, few first time home buyers are in the market as credit standards remain restrictive and young individuals remain living with their parents. Existing home owners are reluctant to sell when the inventory of existing homes remains low, a double-edged retardant to a more robust new and existing home market.

Regionally, Northeast sales dropped 29% but from a high October and within the smallest region. Midwest sales also fell 8.6%. The South and West increased 4.5% and 20.5% respectively. For the year, the same is true: the Northeast is behind last year’s total to date by 12.3% and the Midwest is virtually unchanged from the same 11 month period in 2014. The South and West are ahead of last year’s 11 month sum by 18.8% and 19.5% respectively.


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Buying a North Salem FSBO | North Salem Real Estate

Selling your home without an agent is entirely possible and, in some ways, easier today than in the past. Going for sale by owner (FSBO) could be a huge cost savings, since the real estate commission is the largest expense of any home sale. But FSBO is not for everyone.

If you go this route, you must be deliberate each step of the way. You’ll have to do your research and learn your market to discover what works and what doesn’t. Are homes staged? Do people price low for multiple offers or price high and wait? Is it a strong buyers’ market, or do sellers rule? Sometimes it can be hard to know, as markets can shift by neighborhood — or even by block.

In real estate today, sometimes you only get one chance to make a first impression. If you make a mistake your first time out, the market may punish you later on. Here are some other FSBO considerations for the next-generation home seller.

Online access to pricing makes going FSBO easier today

One of the biggest hurdles for sellers is pricing their home correctly and knowing the comparable home sales. It’s easier to understand pricing today, given how much information is online — particularly for someone who lives in a home where the recent comparable home sales are cut and dry. An example of this is a newer suburban development where the floor plans, layouts, fixtures and finishes are all similar.

Research your market offline, too

Learning a real estate market doesn’t take a huge amount of effort, but it does take time. Go to open houses and see what is for sale. Start this process early, and do it often.

Monitor a few nearby homes from listing to close. Real estate agents do it day in and day out, which makes them uniquely qualified to understand a market.

Be prepared to detach emotionally

Selling a home has both financial and emotional implications, whether you sell it yourself or through an agent. Knowing that complete strangers will be running through and potentially criticizing your home is enough to make any home seller feel like a wreck.

Imagine dealing with these strangers directly. If you go the FSBO route, you are front and center from start to finish. You can’t let your emotions get the best of you, and you must focus on the investment aspect of your home.

Sometimes sellers who can’t emotionally detach find themselves leaving money on the table, alienating perfectly good buyers, or both. But if you think you can see your home objectively, as a third-party product, then you might be good to go with FSBO.

It can become a part-time job

Remember the last time you sold a car or some furniture on Craigslist? It probably required time and energy to photograph your goods, post the listings, field calls, and show the items before you finally made the sale. With real estate, you can amplify that effort 10-fold.

Going FSBO can be excellent for someone with a flexible schedule or who works from home. But getting the home ready to sell means doing all of the standard sale prep work that you would do as a seller — and then taking it a step further. You need to be ready to show the home at a moment’s notice, do follow-ups, and manage the open houses and scheduling, not to mention negotiate and see the sale through firsthand.


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11 Ridiculous Facts About Your New Dream Job: Estate Manager | North Salem Real Estate


Attention, earnest young strivers whose skillsets have yet to find practical application in “the real world” and whose applications have yet to catch the eye of the casting directors of The Real World: The Wall Street Journal has found the perfect job for you and it is sooo Downton Abbey. You, yes you, could rake in as much as $200K a year as an estate manager, and all you would need to do is cater to homeowners with “a lot of home to handle,” many of whom only live in their palatial mansions for a few months a year. Use the following steps as a sort of job description, and before you know it you could be managing an L.A. estate for members of a Saudi royal family with a staff of 75:

1. Be ready to perform duties including “everything from patrolling the tennis court to stretching the owner’s Manolo Blahnik heels.” (Maybe try putting water-filled Ziplocs in the toe and setting them in the freezer?)

2. Going off the experience of one estate manager who lives in the guest quarters on his client’s Beverly Hills estate, an average 12-hour shift involves entering the house 10-20 times a day for “regular security sweeps, meetings with the housekeepers and landscaper, and a maintenance inspection of all nine refrigerators, eight air conditioners and 12 bathrooms.”

3. It’s important to know where to draw the line, though: “I don’t fold people’s laundry or underwear, but I am an accommodator.”

4. You could also draw the line at taking care of tropical fish. “When they die and the owner cries for a week,” says one manager, “I’m not going to be responsible.”

5. Still, you can expect to find the following on a list of chores: “Check the salinity level of the indoor saltwater pool; polish about 15 bronze statues, including a giraffe and a mermaid; tidy up the meditation room with the large Buddha statue; regularly flush all seven toilets and run the steam showers.” Between tidying up around the Buddha and accommodating your clients’ lack of toilet use, remember your mantra, “I am not an accommodator.” Repeat it often.

6. Other duties may include taking the boat out on the lake “to warm up the engine,” and spending five years nurturing a pair of prized bonsai trees “that needed to be treated like children.”

7. Absolute discretion is key: “My children don’t know who I work for—my parents don’t know who I work for.”

8. Other helpful attributes include “reliability” and “moxie.” Positions go to everyone from ex security professionals to former fashion models, though for one estate manager, being from a “big Italian family” was qualification enough.

9. Colorful duties said backgrounds would make you perfect for include scouring the country “for a manufacturer of a specialty tile imported from Italy,” finding a “voodoo priest to bless the owner’s new house,” and carrying “non-FDA approved drugs” for clients. These kinds of responsibilities are why “trust is so important.”

10. Think of it this way: You are, In the words of an L.A. estate manager, “running a company, and the company just happens to be a family of five.” Be sure to inquire about stock options.



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Zillow: Fewer homes underwater in second quarter | North Salem Real Estate

Although the percentage of underwater homeowners continues to heal, the remaining pain is left to struggling borrowers of low-price homes, according to an article in The Wall Street Journal:

About 28% of homes with a mortgage within the bottom third of home values were underwater at the end of the second quarter, meaning they were worth less than the balance of their mortgages, according to real-estate information service. That compares with about 16% of homeowners in the middle tier and 9.2% in the top tier.

As a result, the article explained that it could prevent owners from moving up to larger homes and thus put a damper on purchases by first-time homebuyers.

Overall, the percentage of homeowners who were underwater in the second quarter dropped to 17% from 24% a year ago. 

Source: WSJ

The Baby Boomer housing sell-off | North Salem Real Estate


When Arthur Nelson, a professor at the University of Arizona, went shopping for a home in Tucson recently, he found plenty of senior citizens trying to sell their homes — but at prices far more than what they were worth. “I was amazed at the number of homes that were overpriced by about 25% where the owners were seniors,” he said. These seniors would barely counteroffer, taking so little off the asking price that it wasn’t worth negotiating, Nelson said.


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Teatown Lake Reservation News | North Salem Real Estate


Movie Night
on the lawn behindTeatown’s Nature Center
“A Birder’s Guide to Everything”
rated PG-13
The movie, partially filmed at Teatown, uses birding as the starting point for a tender and gentle coming-of-age story.
Weather for Friday is looking good!
Bring the kids and join us
Friday, June 6th *
7:15 pmBring your own seating and picnic dinner
8:15 pmMovie begins
*Raindate : Saturday June 7th
same time as above
Rain on raindate – movie is cancelled
Not a member and would like to attend the movie?
For more information
call Jean at
914-762-2912 x 124
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Teatown Lake Reservation
1600 Spring Valley Road
Ossining, NY 105

Spain Property Market Outlook 2014: Home Price May Fall By Another 15% | North Salem NY Real Estate

After five years of double-dip recession, Spain’s economy seems to have stopped sinking. But the recovery will be a prolonged one. Despite having fallen almost 40 percent since the housing bubble burst in late 2007, home prices in the euro zone’s fourth-largest economy are expected to drop by another 10 percent to 15 percent before they stabilize.

“Recovery in the housing sector in Spain hinges on an improvement in employment and access to credit, both of which are prey to uncertainty,” Souheir Asba, an analyst at Societe Generale, said in a note.

Here are the reasons why Asba thinks Spain’s property market has yet to hit the bottom.

While a recent trend indicates an improved appetite for distressed Spanish real estate assets, it’s not significant enough to call for a revival of the market.

Spain has finally overcome a slump triggered by the end of the real estate boom. The country emerged from recession in the third quarter of last year and its economy expanded 0.3 percent in the final three months of 2013, the fastest rate of quarterly growth in almost six years.

The Spanish government expects gross domestic product in Real Estate to grow by about 0.7 percent this year, and for job growth to resume in the second or third quarter, including the buying and renting market. You can even check out villas to rent in Spain here on this website and get to live your life in the most comfortable way ever.

The fact that investors are once again buying up Spanish government bonds is a big vote of confidence. As a result, the government is now paying much lower interest rates to borrow money. Yields on 10-year treasury bonds are down to 2006 levels.


7 Homebuying Mistakes to Avoid | North Salem Real Estate


For most people, a home is the largest purchase they’ll ever make, so choosing the wrong property can have disastrous implications for their wallets and well-being. Still, many homeowners feel a strong sense of pride in putting their mark on the property, building equity and having a place to truly call their own. Whether you’re a seasoned or first-time buyer, here’s a look at seven homebuying mistakes to avoid.

1. Using the wrong real estate agent. Just because your sister’s college roommate’s friend just got a real estate license doesn’t mean she’s the right agent for you. San Francisco real estate agent Herman Chan suggests vetting agents and looking for someone who does real estate full time and knows the local inventory. “You can lose an offer if you’re not responsive in a couple of hours,” he says. Request the agent’s sales data, and find out how he or she communicates. Chan recommends asking questions like these to gauge the agent’s tech-savyness: “Is it OK if I text you? Is it OK to DocuSign things? If I can’t make an open house on Sunday, can you shoot me a video?” If you prefer to check texts and emails on your phone, you may not want an agent who insists on faxing contracts.

2. Shopping before you get preapproved. Before you get serious about buying real estate, find out how much mortgage you qualify for and get a preapproval letter from your lender. “If you fall in love [with a property], write that offer and then find out you can’t afford it, it’s an emotional roller coaster you can’t afford,” Chan says. Many agents won’t even take buyers to showings until they have a preapproval letter for that very reason.




If you’re going to refinance, first do this: Spruce up your house | North Salem Real Estate


For anyone selling a home, sprucing up is a no-brainer. Repairs, upgrades, painting and landscaping can raise the sales price. But homeowners who are staying put and refinancing often don’t bother with these improvements. If you’re not looking for a buyer and have years to get around to these things, why bother?

Because the home’s condition will be reflected in the lender’s appraisal, which will determine whether you get the new mortgage and how large it can be.

Appraisals start with an analysis of comparable sales data — the prices of nearby homes that have sold recently. Homes that have merely been refinanced are not included. Because most home sellers do spruce up, the comparable prices likely reflect homes in good to excellent condition.

In the second step, the appraiser makes adjustments for differences between the home and what he or she believes to be the standard among the comparables. So if you have a kitchen from the ’70s and the recently sold homes were more up to date, your appraised value will suffer.

After all, the point of the appraisal is to make sure the home is valuable enough to serve as collateral on the loan. The homeowner may perceive the “value” as including all those nagging improvement plans as if they’d be done, as they surely would be before a sale. But the lender wants to know what the home would fetch as is, in case it had to be unloaded after a foreclosure. A homeowner with enough financial troubles to land in foreclosure is unlikely to spend big money on repairs and improvements.