Archive for the 'Current Issues in Real Estate' Category
Back in the 1980s there was a commercial for NY State Lotto. At then end of the commercial there was the tag line “But you’ve got to be in it to win it!” Now, I’m not suggesting that we all go out and buy $50 worth of lottery tickets each week – but I do think the line “you’ve got to be in it to win it!” applies to real estate.
Now, If you bought at the height of the boom, chances are you are hurting right now and would firmly believe that anyone who would suggest that you go out there and buy real estate needs a lobotomy.
However, if you are a thinking of buying a home in Westchester NY – and you have the means to purchase – then CONGRATULATIONS! you have won the real estate lottery!
Real estate is on SALE right now….
Prices are down from about 20-35% across lower Westchester. That’s a SALE folks! If this were a BMW, some Jimmy Choo shoes, a new flat screen or an iPad, you would have everyone crawling all over each other like a re-run of Black Friday. With the low interest rates that we now enjoy, affordability is at highs not seen in over a generation. Further, much of the lower Westchester housing market is flat or increasing in price. Pockets that are declining are pretty much bouncing along the bottom. The big dramatic downward moves have morphed into very slow, slight declines, flat lines or a gentle increases. The market is flat – not tanking.
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A few days ago, I wrote a post “Meet the new real estate agent… same as the old agent.” The article was posted on here in The Westchester View and on Active Rain which caters to the real estate industry. Based on the lively comment thread on Active Rain, some agents misunderstood what I was trying to say. The article was not meant to imply that all listing agents were the same and that it didn’t matter at all who the homeowner picked. That is most certainly not true.
What I was emphasizing in that first post was that an agent can not defy market forces. If prices are down and the market is a bear which is the case for most of Westchester homes for sale, then even the most stellar agent will NOT be able to get you a 2006 price in 2011. The notion that the “right agent” will get the seller “their price” is a fallacy which dies a slow hard death for many sellers.
The Expired Listing Gold Rush:
The real estate industry created this urban legend in many ways. Let’s take expired listings as an example. If you are a home owner who had a listing expire – you know what I mean. The minute your listing expired, seemingly thousands of agents came out of the woodwork trying to convince you that they could do a better job. They descend upon sellers like sharks in a feeding frenzy. Sellers don’t like to think about their homes a chum – but sadly, that’s the reality.
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A few months ago an agent responded to blog I wrote about first time buyers. Her comment was that “First time buyers today don’t know what is good for them. They want their cake and ice cream before they’ve had their main meal. “ I wish I could remember the blogger’s name – but I forgot the post and only remember the quote. I had understood what she was saying, but at the time, felt the judgment was more than a little severe. However, recently I’ve recently had a cooperative for sale in a very lovely building and sometimes selling something small in a complex where everything is easily compared brings buyer behavior into sharper focus. Having observed the sales in that building – such as they are because volume was very low until just a few weeks ago – the agent is largely correct…wanting the glitz without the substance IS impacting the decision making process of first time buyers – and I predict that it will come back to haunt them when they sell.
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This is a tough topic for me to address objectively. However, I have seen many blogs recently from agents touting their expertise as “local experts”. Meanwhile, I’m also seeing quite a number of other agents bragging about the number of listings that they have. Most of these agents can not possibly accumulate the raw numbers by being local. Many of these agents have listings that are scattered far and wide – sometimes in more than one state or at least in several counties.
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Right now we’ve got a renting bubble. At this point it is almost as irrational as the housing bubble of 2005. Just as scarfing up McMansions with no money down loans was irrational – now many potential buyers are obsessed with renting to a point where they are hurting their own self- interest.
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Recently, I’ve had several inquiries from would be home sellers about whether now is the time to consider downsizing their home. Scaling back is never easy and should not be undertaken lightly as it means a significant change in your lifestyle, but from a financial standpoint, I would have to say that the answer would be a very strong “YES!” if you are a Larchmont homeowner.
In the midst of a national housing crisis many would-be sellers are sitting on the fence asking whether now is a good time to scale back into something smaller. This is particularly true of empty nesters or soon-to-be empty nesters. With real estate – as with all large ticket items – it is best to buy low and sell high.
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There is a lot of hype circulating in the real estate industry about local experts. A recent post about the topic was posted by an agent on Long Island…Paula Hathaway “Chaff….Schmaff! A bad attitude or just a better way of doing business.” With all due respect to the author – I felt that the emphasis on being a “local expert” implied that agents who were not already established in the area were merely chaff – while the established area agents were actually the “wheat.” We all start out as chaff – and chaff has no opportunity to become wheat if they aren’t given a chance. That appears to be a bit too convenient for the very local agents in any area. Because it implies that they are the only game in town…
Real Estate is Surprisingly Competitive:
There is a saying within our industry that you can’t swing a cat without hitting a real estate agent. It is also paired with “you can’t throw a rock without hitting a real estate agent”….Well you get the idea. There are a lot of agents out there. Many good, many not so good and separating the wheat from the chaff is a tough task for the average consumer. Many think we are all created equal and anyone who can stick a sign in the ground or unlock a door will do.
That is as far from the truth as it gets – but it gets to the heart of this blog – and that is that the real estate industry manufactures agents on a conveyor belt with little regard to quality. Its all about quantity. As a result – the confused public that is supposed to do the wheat vs. chaff determination is totally confused and disappointed in the quality of agent they encounter. Agents, for their part, try to separate themselves from the crowd by indicating that they are “special.”
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Westchester Homes have always been expensive. They are expensive to buy and expensive to maintain. Taxes are high here and any home that is less than an hour to midtown Manhattan by Metro-North is going to be expensive. As I say to buyers, who think the housing recession means that they can buy a palace for pennies – there is no free lunch. But for those would-be sellers who have been hunkering down – hoping that the housing recession would pass and the market would roar back to 2006 levels – it may be time to consider downsizing.
In the past couple of weeks, I’ve had a couple of prospective sellers come to me with the question – should I consider downsizing?
For Many the Westchester housing market has made quite a recovery:
If you are lucky enough to live in one the more affluent areas of our county – you may be very much in luck. Prices have been recouping much of their lost ground. We aren’t back to 2006 levels – but these markets are sturdy and very resistant to recession.
Meanwhile, while prices have recovered the cost of living in these communities is quite high. So for those for whom living on a fixed income or those whose job has been downsized or are unemployed, now might be a good time to consider a move. The condo and cooperative markets have seen a major adjustment over the past year. So, on the buying side you can get a great deal and on the selling side, you will still do well.
Other communities are flat or still trending down:
For those not fortunate enough to live in a community where prices are recouping lost ground, the issue is more complex. For people who want to downsize from a house to something more modest – you will find that your home is worth a whole lot less than you would like. You may need to make upgrades to your property in order for it to sell. So all of this has to be calculated against the cost of living and the lifestyle changes in order to come up with a solution that makes sense for you. On the bright side, the condo and coop market has gone down significantly over the past year, so if you are downsizing from a house to a condo you will do better this year than in previous years.
There is no right or wrong answer:
This is not a one-size-fits-all situation. The answers will be as different as each client’s lifestyle and tolerance for risk. I will say that if you are waking up in a cold sweat every night wondering how you will pay your bills, that the time has probably come to move on – no matter how painful the decision may be. If you have lost a job and it looks as though you will be unemployed for some time to come, then again, a move is likely to be in order. If you see your overhead soaring with no end in sight – it might be time to downsize before it gets beyond you. If things are going well, but you are worried about a falling knife – unless you are in one of those municipalities that is going up in value, I don’t know that downsizing makes sense. Prices appear to be bouncing a long the bottom in many communities – and prices are more likely to rise than fall over the next five years. But for those who have a high overhead – I’m not expecting the market to boom over that period – so selling and downsizing may well be the better decision.
Bottom Line – You need to crunch the numbers:
Look at where you might go after you sell and take a careful look at what the cost of living will be in your new home. Think mortgage, taxes, maintenance fees (if you are buying a condo) energy costs, parking fees, transportation to work. Put all the numbers together and compare it to what you’ve got now. Open your mind to several locations and homes and crunch the numbers for each of them. Different living situations can have dramatically different costs. Some homes may cost more but have a much lower overhead. Your real estate agent can help you think through the different scenarios.
If you want to talk about your options feel free to contact me by phone (914-374-5529) or email – ([email protected]) or you can simply fill out the form below – whichever method you prefer. Don’t worry – I do not sell, spam, or otherwise abuse your information!
© 2011 Ruthmarie G. Hicks – http://thewestchesterview.com – All rights reserved.
Waiting to buy a home could be an expensive mistake….
That’s what! Plain and simple. Ever since the knife dropped in on real estate – buyers have been alternately flooding into the market and holding back. Don’t get me wrong…these are difficult times. I understand the hesitancy – however, for those who have a stable job and a stable income with good credit, I have to think that a little green monster called greed is entering the picture. We all see the little green monster in ourselves from time to time – but we need to watch that monster and to tame it. For as Jim Crammer of “Mad Money” fame often says – “Bulls make money, bears make money, but hogs get slaughtered.”
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Crystal Hawkins-Syska is a short-sale specialist who has the answers for people who need the help.
Seven out of Ten Homeowners go into foreclosure with out any visible sign intervention or call for assistance.
Why is that the case? It could be because they don’t know where to turn for help and accurate information. On September 7th we will be discussing the process of foreclosure and foreclosure alternatives. 1 in 6 homeowners are delinquent in their payments. Do you know someone at work, your place of worship, on in your family who:
Has lost a job?
Had an illness or death in their family?
Will be retiring in 1 year or less?
Refinanced their house in the last 5 years?
Purchased their house in the last 5 years?
Their Employer is downsizing?
Their business is struggling?
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