Long Island Real Estate Markets 411 Trends for 2012
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Edie Katz Presents Long Island Real Estate Markets 411 January 2012 Webinar titled Trends in Resident Real Estate on Long island for 2012
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Long Island Real Estate Markets 411 Trends for 2012
- 1. ~ 2012 WEBINAR SERIES ~ Hosted by Edie Katz | Licensed Associate Real Estate Broker Laffey Fine Homes ekatz@laffey.com www.ediesellslongisland.com 516-639-1172
- 2. WELCOME ….
- 3. AFFORDABILITY "Housing affordability has improved dramatically… The monthly mortgage payment for a median-priced single-family home is now $700, compared to $1,140 in 2006 —a decline of nearly 40%. Nationally, purchase mortgage payments now account for only 13% of monthly median family income, the lowest percentage on record (since 1971), and compared to 23% in the 1Q of 2006.” - David Stiff, Chief Economist at Fiserv
- 4. 100 YEARS IN THE MAKING
- 5. OVERVIEW What History Tells Us…Case Schiller Reports from 2011 Nov 9, 2011 Fiserv Case-Shiller Home Price Insights: Greater Affordability and Strengthening Economy Restoring Price Stability to U.S. Housing Market • Home prices in the U.S. expected to decline 3.6 percent into mid-2012, and then rebound 2.4 percent in second half 2012 through first half 2013 • Price declines and low mortgage rates have resulted in dramatic improvement in housing affordability • Ratio of monthly mortgage payment to median family income lowest on record; Monthly mortgage payment for a median-priced single-family home nearly 40 percent lower than at peak Feb 1, 2011Fiserv Case-Shiller Home Price Insights: After Five Years of Record Declines, U.S. Home Prices Begin To Stabilize • 75 percent of U.S. metro areas expected to see stable prices by end of 2011 •San Diego, Washington, D.C., and San Francisco home prices have stabilized •Minneapolis, New York City and Portland, Ore. will stabilize by end of 2011 Nov 15, 2010 Fiserv Case-Shiller Home Price Insights: U.S. Single Family Home Prices Up 3.6 Percent, but Double-Dip Decline Expected In Many Markets • Metro areas with early 2010 price bounces expected to experience corrections through 2011
- 6. NAR Reports are upbeat… Washington, DC, December 29, 2011 - Pending Home Sales Rise Again in November, Highest in a Year-and-a-Half - Pending home sales continued to gain in November and reached the highest level in 19 months, according to the National Association of Realtors®. The Pending Home Sales Index,* a forward-looking indicator based on contract signings, increased 7.3 percent to 100.1 in November from an upwardly revised 93.3 in October and is 5.9 percent above November 2010 when it stood at 94.5. The October upward revision resulted in a 10.4 percent monthly gain. The last time the index was higher was in April 2010 when it reached 111.5 as buyers rushed to beat the deadline for the home buyer tax credit. The data reflects contracts but not closings. ~~~And Prior Reports State the Same~~~ Washington, DC, December 21, 2011 - Existing-Home Sales Continue to Climb in November Existing-home sales rose again in November and remain above a year ago, according to the National Association of Realtors®. Also released today were periodic benchmark revisions with downward adjustments to sales and inventory data since 2007, led by a decline in for-sale-by-owners. Although re-benchmarking resulted in lower adjustments to several years of home sales data, the month-to- month characterization of market conditions did not change. There are no changes to home prices or month’s supply. The latest monthly data shows total existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 4.0 percent to a seasonally adjusted annual rate of 4.42 million in November from 4.25 million in October, and are 12.2 percent above the 3.94 million- unit pace in November 2010
- 7. ABOUT LONG ISLAND …. • LARGEST ISLAND IN THE U.S.A. • 118 MILES LONG COVERING OVER 1400 SQUARE MILES • LOCATED EAST OF THE ‘BIG APPLE’ – NYC • LARGER THAN THE STATE OF RHODE ISLAND • POPULATION FROM 2010 CENSUS 7.5 Million+ Long Island has a wide range of demographics, cultures, lifestyles and wealth An area where a $120,000 studio co-op is less than 3 miles from a $9.8 million waterfront estate. From cottages & houseboats to colonials and estates, Long Island has it all!
- 9. WHAT YOU SHOULD LOOK FOR IN THE LOCAL MARKETS… Nassau County
- 10. HYPERLOCAL MARKETS • PORT WASHINGTON MARKET SNAPSHOT
- 11. PORT WASHINGTON Under Contract PORT WASHINGTON - Residential Jan Feb Mar April May June July Aug Sept Oct Nov Dec Total 2009 14 11 11 18 23 26 15 16 20 21 11 17 203 2010 6 19 22 22 16 24 12 15 10 16 16 11 189 2011 9 11 19 17 24 18 23 17 11 12 18 16 195 Overall Closed Market Stats: Median SP Average SP Units Average DOM 2011 as of 12/31 692,500 720,011 184 112 2010 662,500 703,101 170 103 2009 667,500 697,540 167 127 2008 730,000 774,330 110 116 CONTRACTS UP MARGINALLY BY ALMOST 3.2% IN 2011 MEDIAN CLOSED PRICE UP SLIGHTLY BY 4.5% IN 2011 AVERAGE DAYS ON MARKET UP FROM 2010 BUT STILL LOWER THAN 2008 FIGURES
- 12. SANDS POINT Under Contract SANDS POINT - Residential Jan Feb Mar April May June July Aug Sept Oct Nov Dec Total 2009 1 0 2 3 3 4 3 0 1 2 1 2 22 2010 1 1 2 3 5 2 1 7 3 1 1 5 32 2011 3 2 2 3 3 1 4 1 0 1 4 1 25 Overall Closed Market Stats: Median SP Average SP Units Average DOM 2011 as of 12/31 1,525,000 2,717,448 29 203 2010 1,717,500 2,118,603 29 198 2009 1,900,000 2,155,294 17 147 2008 2,500,000 2,528,295 11 119 All figures approximate. All info should be independently verified. As Per MLS Closed & Under Contract 1/1/08 to 12/31/08, 1/1/09 to 12/31/09, 1/1/10 to 12/31/10, 1/1/11to 12/31/11. CONTRACTS DOWN 21.8% IN 2011 MEDIAN CLOSED PRICE DOWN 11.2% IN 2011 AVERAGE DAYS ON MARKET INCREASED OVER LAST 4 YEARS
- 13. THE FACTORS … • CONSUMER BUYING POWER • THE VALUE OF EXPERIENCE • CLEANING UP THE FINANCIAL LOG JAM • SOUND INVESTING
- 14. MORTGAGE RATES – 30 YR FIXED 1/01/2011
- 15. LESS DIY…
- 16. IMPACT OF SHADOW INVENTORY & FORECLOSURES Rising foreclosure start rates will add to the distressed property inventory and drive home prices further down, according to a report from Fitch Ratings, reflecting the impact of last year's robo- signing scandal. More than 10% of severely delinquent loans in private- label residential mortgage- backed securities are now moving into foreclosure each month. That's nearly double the rate from a year ago.
- 17. RETURN ON INVESTMENT (January 1, 2000 – December 1, 2011) MSN Money.com, Case Shiller
- 18. RECAP & REVIEW STATISTICS Consider what’s happening nationally Maintain focus on what’s happening locally Stay informed about what’s happening in your town, neighborhood & street MAKING A DECISION TO PUT YOUR PROPERTY ON THE MARKET Consider all of the above PLUS • What is Your Time Frame? • Are Permits Valid? • Pre-Inspection Necessary? • What is the Value of your Home in the current market? WORK WITH A PROFESSIONAL Advanced online/offline Marketing of your Property Confidential, Professional and Expert Service PEACE of Mind
- 19. THANK YOU!!! ~ 2012 WEBINAR SERIES ~ Hosted by Edie Katz | Licensed Associate Real Estate Broker Laffey Fine Homes ekatz@laffey.com www.ediesellslongisland.com 516-639-1172
Editor's Notes
- Welcome… acknowledge listeners… time appx 30 minutes… with Q&A afterwards.. All mute… and a little bit about Edie Katz…
- The VISUAL reality… John R. Talbott ‘predicted the crash’, predicted the end of the housing bubble and he is now firmly touting… BUY! BUY! BUY… why are we telling you this? Because with everything we know about the housing market today, it really still remains the best investment for the longterm. Today we will cover… Where we have been citing Case Shiller’s 100 year plus analysis, why we are so upbeat over the coming 2-5 years, what you as a consumer (seller or purchaser of real estate) should really be looking at in terms of trends and indicators…what is really happening in your area – Port, Sands Point, Manhasset, etc..the factors impacting our perspective…and a little bit about the foreclosure markets impact on the Gold Coast’s short term outlook.. And finishing up with the reality of owning real estate.
- Doesn’t really compare to our hyperlocal markets but you get the idea of consumer sentiment
- I just love this chart.. Not because it is chock full of history but because it is the only truly realistic visual of economic changes throughout our timeline… Bottom line is that boom times were followed by returns to levels consistent with the 1950’s… however the index has risen over 83% since 1997. but also not the precipitous decline topping out in July 2006… look closely at the forecast… returning prices falling to ‘normalcy’…
- Most important, the November Case Schiller Report – predicts a decline in housing prices thru the first 6 months of 2012.. Followed by a rebound … while most sellers are uncomfortable with the short term predictions, the actual momentum (shadow inventory not withstanding) will begin to gradually increase through 2015 with gradual price appreciation.
- Even the latest stats from NAR are more positive…
- So that’s the national front… how about our beautiful Long Island markets? Considering that we could very well be our own state with these factors…. (cite a few above) it is clear that we are unique in our geographic, demographic and socio-economic landscape. I always find it amazing when I tell friends from outside the tri-state area that within a 3 mile radius, we can show buyers a lovely one-bedroom condo in a doorman building and in less that 15 minutes show a grand waterfront estate with views of the Harbor… Our density has its merits.
- So, what is our focus today? Perhaps the map will give you perspective…
- What should you be looking for? What indicators and benchmarks will provide telltale signs of the direction of home prices? Is it a buyers or sellers market? From a realtor’s point of view, we look at Contract Prices and the leading indicator of the direction of home prices. Think about it…. The Sold price for any home on your block could be anywhere between 3 months and a year PRIOR… whereas the Contract price is a snapshot in real time… today, yesterday of what homes are selling for… More often, sellers look at the list price in the neighborhood… not the offers or the contracts… so, we monitor Contract.. Remember this is nassau county… we will be looking more indepth in the coming slides…
- Lets take a look at one of my primary service areas – Port Washington. There are two distinct charts… Pending Sales for the three years since 2009, and the Pending Sales for the last 24 months for all property types. Note the differences in the home prices from the Nassau County Chart (by selecting the criteria only for zip code 11050)… look closely at the marginal increase in single family home prices from 2009 to 2011… there is improvement albeit minimal… Even the pending sales, while slightly declining are still hovering around the $725-$730 mark…
- Gauging market direction, transactional activity: listings, under contracts and closed home sales is an art and a science… This chart is a simple breakdown of homes under contract by month since 2009 and the Closed transactions since 2008 for single family residences. Also note the average selling price at $720K plus… still rising from 2009 levels.. (note the three bullets at the bottom of this chart…
- Same for Sands Point… again, this is a short term snapshot of market activity and transactional data… but the perspective is still the same… Median selling price at $1.525 Million versus average selling price at $2.7 Million plus… the highest reported in the prior 4 years running.
- In addition, homes are selling here.. Pending home sales have an upward momentum, inventory is falling – perhaps a return to ‘normal’ markets; working with experts in the field of residential real estate with a longstanding history of solid marketing and negotiation skills, but also the waiting game in terms of the foreclosure markets log jam with ‘shadow inventory’…
- Just look at interest rates… HISTORIC lows… buyers can afford more house…
- Less for sale by owners on the market… overinflating the listing price because of lack of information, lack of research… in 1991 almost 20% of homes were fsbos… today, less than 10%...
- So up until now we’ve spoken bright and upbeat… but the looming foreclosure rates will start to rear their ugly heads once the banks in the northeast come up for air… As a result, there is the potential to begin to see downward price pressures on distressed property coming to market by the banks shedding inventory. Talk about the Sand states and the fact that the foreclosures have slowed considerably to what can be deemed the normal rate of foreclosure for that market….
- In wrapping up… this is one of my favorite reaffirmations of how buying real estate is ALWAYS a good investment….Over an 11 year period from Jan 1 2000 thru Dec 1 2011, the average real estate investment – aka home purchase – experienced over a 40% return on assets… while for the same period… the S&P and the DOW were in a sorry state… only the dow came close in positive territory at 2nd place ….
- Being aware of the national trends, cyclical movement affected by bank log jams, shadow inventory… and the myriad of important factors to consider like historically low mortgage rates, cheap money, less pressures from the FSBO market with ill-fated listing prices… sums up that this is and always will be a great real estate market…..Working with me, my firm’s almost 40 year track record on the Gold Coast and the basket of professionals I surround myself with… home inspectors, mortgage consultants, attorneys…. Will provide you with information, knowledge and the peace of mind to place your home on the market or purchase one with me!!!