Real Estate New York
Market Update September 2008
Positive Signs in Real Estate Outlook
A positive sign has emerged in the U.S. real estate outlook as forecasters project the nation will not fall into an overall economic depression as a result of the housing depression.
Destin, FL ( PRWEB ) September 2, 2008 -- Despite having few signs of stabilizing, the U.S. housing market won't trigger the national economy to fall into an overall economic depression, providing a rare positive sign in the nation's real estate crisis, according to a new report by Housing Predictor.
The positive news is provided by real estate analysts, who spent more than two months compiling data and pouring over it to determine their findings for the forecast. Housing Predictor forecast the nation's foreclosure epidemic and the housing depression long before either became a reality in the day's headlines.
In fact, the likelihood of a Great Depression occurring like that of 1929 when the stock market crashed and unemployment hit 25% is so remote that analysts aren't even providing a percentage. Signs of an improving housing market are beginning to appear, and should become apparent in 2009 in the majority of housing markets.
Housing Predictor profiles the nation's economy and its study in a new online report. As the majority of housing markets struggle through the worst real estate deflation since the Great Depression, more and more people are turning to Housing Predictor for its forecasts. More than 250 local housing markets are forecast on an annual basis on the web site in all 50 states.
Financial markets all over the world have been severely impacted by the credit crisis, which has sent stock prices to near record lows in many cases and caused the largest increase in U.S. bankruptcies since the early 1990's. The epidemic of foreclosures has topped 3-million units nationwide since the housing crisis started more than a year ago.
Read more: from Housing Predictor: Independent Market Forecasts
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Rescuing Your Deal
The days of easy mortgages are long gone. And with it, seemingly, the dream of home ownership central to the lives of most Americans.
Qualifying ratios are being cut off at the knees, the 100% loan is gone, and many home buyers are ending up short of the funds to come up with the 15% to 25% down payment requirement now common in the market.
Find out what Realtors are doing to help our clients make the deal happen through creative financing. Here are the topics:
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Consider seller financing.
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Suggest leasing with an option to buy.
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Keep an eye on credit unions.
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Turn to IRAs.
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Tap family members.
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Know all the programs available.
Read more: from the National Association of Realtors
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Mortgage Math Made Easy
The Internet is full of mortgage calculators, making it easy for buyers to determine how large a mortgage they can afford and what their monthly payments at different loan amount will be. (Sites with good mortgage calculators include Bank of America , Homefair , and Wachovia . Be sure that the payment amounts include taxes and insurance as well as loan principal and interest.)
If buyers haven't done these estimates online, you can also suggest using some standard rules of thumb to estimate how much of a home they can afford.
• Monthly mortgage payments (including property taxes and insurance) should not exceed one-third of monthly gross income. The ideal range is between 28 percent and 33 percent of gross month income
• Total monthly debt payments (including your mortgage payment) should not exceed 36 percent of total gross monthly income.
• The price of a home should not exceed 2.5 times total gross income.
But before buyers can start plugging in numbers to a calculator, they need a clear picture of their current financial picture. Use these lists as a guide to help them get a better grasp on their finances:
Read more: from the National Association of Realtors
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Architectural Coach: Split Levels
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Split-Level Homes: Outdated or Underrated?
Popular in the Capital Region, they often get a bad rap, but split-level homes have many perks buyers will appreciate, starting with affordability.
Back in the 1950s and ‘60s—when the USSR's launch of Sputnik made outer space the new frontier, and the Beatles were transforming rock and roll music—the split-level home began to emerge on the American suburban landscape.
At the time, the style appealed to a wide swath of buyers because it was a fresh design and it was grander than the modest bungalows that dominated many neighborhoods, yet could be affordably built on a smaller lots than a sprawling ranch.
The design is no longer considered modern, but it is still practical for many of today's buyers. Here's a look at how the split-level came to be, and why it still deserves respect.
Read More by Barbara Ballinger
Should You Accept A Home Builder's Loan Offer?
Buyers of new homes, particularly in this buyer's market, are often showered with financial incentives from builders such as the payment of closing costs and the inclusion of optional features. But accepting these incentives comes with a catch: the majority of builders require that buyers work with their preferred lender and title company in order to earn these incentives.
Should consumers accept these loans? When it comes to losing out on thousands of dollars of closing costs and perhaps a finished basement, it just makes sense to work with the builders' preferred companies. Builders put this system in place because they want to make sure the loan is completed on time and the settlement is as smooth as possible.
Read more from: Michele Lerner of the Real Estate Examiner
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Danger of Seeing a Home with the Listing Agent
What's the Problem With Calling a Listing Agent to See a Listing?
A reader asks: "We saw this house online and fell in love with it. So, we called the listing agent and went to see it. She asked us if we were working with an agent and we said no. We called her again a few days later to show it to our parents. Now we want to buy the house and found a different agent to write the offer for us. Our new agent said we should not have called the listing agent. I don't see why not. What is wrong with calling a listing agent to see a listing?"
Answer: In states where agents are allowed to practice dual agency , when you ask a listing agent to show you that agent's listing, the agent figures you are going to write the offer with her. This means the agent will receive the listing side of the commission and the buying side of the commission. The agent gets both ends. That's why it's called double-ending.
When the Listing Agent Shows the Home
This is a sensitive issue for many buyer's agents. The main problem is procuring cause . Proving procuring cause is a long, complicated process, but agents who sue over procuring cause are typically the agents who first showed the home to the buyer.
In California, like many states, you have the right to choose and consent to the type of representation that you want. You can hire:
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A seller's agent (and represent yourself)
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A buyer's agent (who will represent you)
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A dual agent (who will have a fiduciary duty to both seller and buyer)
If you have signed an exclusive agreement to work with the listing agent under dual agency capacity, you may be obligated to purchase the home through that agent.
Answering the Question: Are You Working With an Agent?
If the listing agent shows you the home, the first thing an agent should ask you is whether you are working with another agent. Here are examples of the best way to answer that question:
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No, we are not working with an agent at this time, but when we are ready to buy a home, we will find a buyer's agent to represent us.
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Yes, we are working with an agent.
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No, we do not have an agent. Would you consider representing us?
Any other answer is likely to get you into hot water. Agents ask the question to establish an agency relationship . If you have an agent, the listing agent should back off.
Writing the Offer With a Buyer's Agent After Seeing the Home With the Listing Agent
This is where it gets sticky. First, the listing agent will see your name on the purchase offer, and will know who you are. This is not likely to sit well with the listing agent because the agent will feel as though she was used. Agents do not work for free.
You might ask, "Isn't that her job -- to show her listings?" Yes, an agent is obligated to show her client's homes, but if you are working with another agent, typically your agent will show you the home.
Read more: from Elizabeth Weintraub of About.com
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Market Statistics as of September 1, 2008
This graph represents average sale versus list prices 
Looks like we are experiencing our typical end of summer slowdown for the month of August. It will be interesting to see if the curve rebounds in October. In the meantime, average prices are below their 2007 levels.
And the number of sales still remains low.
In a balanced market such as the one we now have, homes are affordable and the threat of a declining market is aliviated.This can provide an excellent buying opportunity due to reduced competition and increased willingness on the part of sellers to negotiate.
Notice how the Buyer/Seller graph relates to the average price graph above. The point is that the Buyer/Seller graph can be used to predict the average sale price for the coming month
P.S. The official tabulations are in for the first half of 2008 and once again they conform nicely with our Market Update (as graphed above) only a month late.
Download complete report for the New York State Association of Realtors.
(.PDF 299 kb)
Mortgage Rates and Trends
The link to up to the minute New York State mortgage information seems to work better than presenting the actual graph.
Click for up to the minute mortgage rate information
Buyers' versus Sellers' Market Report
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The graph above shows the number of sales in a given month divided by the number of homes on the market in the four main counties of the Capital Region. A return to our normal brisk spring market has continued to leveled off the downward trend towards a new sellers' market.
As you can see, in October we were in a balanced market. As of December 1, the market turned back toward favoring the buyer. This upturn in buyer fortunes continued unchanged as of February 1, 2008 but since then the market has been descending toward seller territory. But now has turned back toward buyer territory.
*This ratio can be used to determine whether we are in a buyers' or sellers' market as indicated in Dennis Maier's article on Market Timing featured in eZine Real Estate. In general, if it would (theoretically) take less than 6 1/2 months to sell the current inventory it's a sellers' market. If it would take more than 9 months to sell all the homes on the market it's a buyers' market.
Archives
We've been asked to again include links to past market updates. But since our stories link to other web sites over which we have no control we only want to link to our most recent issues. Otherwise, the article links may fail to work as they once did.