New York State Home Price Projections
Hi, this is Gen Hagen. Recently I invited all my clients and some prospective clients to attend a home seller's seminar that a few were unable to attend. Since I didn't want anyone to miss out on this information, I put together the following video. Although the research is national in scope, one needn't go to far to extrapoplate New York State home price projections. I hope you find it of value:
Today's Home selling environment is trickier than ever... although home prices have gone down nationally by about 31%, home price declines here in Suffolk County have ranged from 2006 to as little as 8% declines in Babylon to 57% declines in Central Islip.
So as you can see, home prices depend greatly in the town that your property is located within. Take a moment and pause this slide if you'd like to compare the rate of decline in your town..
Some would say that homes aren't selling -- but you know, they're wrong. On Average 12,630 homes are selling each and every day and another 8,715 buyers are receiving a mortgage -- every day!
Lets take a look at historic national home prices -- as you can see, the norm was about 3.6% for home price appreciation between 1987 and 1999, then during the bubble from the 1st qtr of 2000 to the 2nd qtr of 2006, prices increased 10.4% annually and then came the bust from the 3rd qtr of 2006 til today where home values have decreased on average 7.1% per year. Again, as I've said earlier, home values vary greatly from town to town and you should check with a qualified realtor in your area if you want to know just how much home prices have been affected in YOUR town.
And as you can see from the next slide, home prices aren't expected to rebound significantly anytime soon and you'd have to take this rebound further out when analyzing the expected appreciation in NY State.
One of the seers who predicted the end of the housing bubble has changed his tune and is espousing Now as the time to buy.
And Warren Buffet had this advice for his secretary... He said, Buying a home right now, will be the best opportunity in your lifetime.
But does that mean you should wait until spring when all the buyers are out looking?
If you look at the bust, you'll see that prices have gone down a great deal.
But when you look at the next chart, you'll see that if you ran a straight line, the prices are still inflated by historical measures.
Historically we've known that when there's 1-4 months supply, that's a seller's market... 5-6 months supply is the norm and more than 7 months supply is a buyer's market.
We've also known about the inverse correlation of Bank owned properties hitting the market and home prices. I mean that as the number of bank owned properties rise, home prices fall.
You see, it is the foreclosure situation, especially in New York State that has me concerned.
As you can see, foreclosures were being processed fairly well until 4th qtr of 2010 with the robosigning fiasco the banks were faced with.
As a result, banks held off on foreclosing, held off until just recently when their 25 billion settlement with the government was announced.
So all this pent up foreclosure processing has resulted in something we refer to as shadow inventory... Homes that will be foreclosed upon taking prices down further.
An executive at wells fargo acknowledged that the agreement with the govt. will allow the banks to proceed with millions of foreclosures that have been stalled.
The next chart shows the states that are in the worst shape, ranging from states that allow for swift foreclosures, to states that are jurisdiction states, allowing the courts to be involved in the process. You see the color of NY State? That's not good for obtaining higher prices anytime soon.
As you can see, the foreclosure process takes longer in NY state than any of the other 49 states. Good if you're being foreclosed upon, bad if you're trying to obtain plausible price.
According to a Chase analyst, home prices could fall another 6-7% before they hit bottom
And according to Fitch, home prices could see a decline of another 13% with the northeast and NY becoming the hardest hit.
In fact if a 400,000 dollar home falls 5% in value over the next 6 months, a family is standing to lose $769 dollars per week.
So what's it all about -- Alfie...
It just means that you must price your home compelling if you want to see it sell so you can prevent further potential loss that increased Bank owned properties will create. Or you could wait until spring... just not this spring.
Hi this is Glen Hagen again, I hope you found this information as valuable as I did. Seeing housing information presented like this, can be a real eye-opener. If you have any questions on the information contained within this video, or any real estate matters whatsoever, be sure to call or email me. You'll be glad you did!
Music By: Kevin MacLeod