bonnie koff logo

Warning

JUser: :_load: Unable to load user with ID: 549

2009 Westchester End of Year Review

After enduring three years of a declining real estate market, 2009 brought a much needed break for the hard hit real estate sector. Driven largely in part by the economic stimulus that helped the housing market emerge from the recession, it leaves many of us wondering what is next for real estate. Will housing prices rebound? Will the new extended and expanded tax credit be just what the doctor ordered? Will the luxury market recover similarly to the entry level?

How would you say the housing market faired in 2009?
Did it live up to your expectations or falter?
Although it was a challenging year, I believe that it ended up being a year of stability. It was a year of transition in many of our markets. We bounced along a rough bottom but at the same time, we are really prepared for a modest and consistent improvement. The second half of 2009 was when we finally saw a jumpstart. I think that really stems from consumer confidence. At the end of the day, what drives affordability is confidence. Does a buyer feel confident in his/her employment and finances? If so, then buying a home is typically a good option. Another way that the government is reinforcing the viability of buying a home is by offering the tax credit.

Do you feel the tax credit was an important factor in the market turnaround?

Undoubtedly, the tax credit was an important factor in our market's turnaround. We didn't really know this for sure until we started looking at the number of closed escrows in September, October and November. The number of properties that went under contract increased as we grew closer to November 30th, the original expiration date for that tax credit. It was a very clear indication that once potential buyers realized they might miss out on the $8,000, tax credit if they did not move quickly, many buyers got off the fence and began to act. The number of property showings was up. The number of properties that were sold was up. Then, we saw the extension of the tax credit and we saw yet another market adjustment. I wouldn't say that the market has been slowing, but there has been a softening of the frenzy. I think as buyers near the new expiration date of April 30, 2010 that they will once again begin to act.

Do you think the extended and expanded tax credit will solidify our market recovery?

Certainly the increased activity that we've had in the lower end market has been good; but in and of itself it probably will not create a market-wide recovery. To have a market- wide recovery, we have to be able to engage the move-up buyer. We have to remind the move-up buyer that now may be the best time in our history to step up to the higher priced homes. The new tax credit that provides existing home owners with a $6,500 tax credit is certainly helpful but many buyers need more than just a tax credit. They need to have the courage to step up in today's market. Those who do, may reap the best benefits. The fact is, you probably have never gotten as much value, thanks to interest rates and given what you're earning, as you have in today's market. Six months to a year from now, we probably won't be able to say the same. We are certainly recognizing that the tax credit is a great thing. But it isn't compelling enough if a potential buyer isn't confident in his/her finances or future employment. For those who are confident, the tax credit should serve as a clear and convincing message that now may be a great time to move-up.

Why is it such a great time to move-up?

It's all about the power of leverage. The fact is that in most markets, inventory is very low in the low priced home range. So buyers in that market are often competing against other buyers for the same home making it more of a seller's market. However, it is a buyer's market in the mid-level and upper end markets so you truly get the best of both worlds when you choose to move-up. There is a lot of talk about the impact of inflation. Do you think people should be concerned about it?

Certainly people need to be aware that inflation is very likely. The government has devoted a great deal of money to stimulate our economy and in order to strengthen our dollar over time, inflation will be likely. With inflation comes higher interest rates and ultimately less buying power for a home buyer. But it all goes back to maximizing your opportunities now, in today's market. For those who have made a fortune in their lifetime, they were always looking at the opportunity, today. In order to do so, you must sell where the market segment is strong and buy where the market segment is weak. Today that opportunity resides with the move-up buyer.

Another important fact to note is how advantageous interest rates are right now. Some buyers are able to qualify for 30-year fixed mortgages at under 5%.

Do you think we've hit bottom?

I think in many communities we probably have hit bottom. We are seeing statistical evidence of it in the average sale price and in the number of homes sold. Interestingly (and I think this may be contrary to what most people believe), the communities that may have hit bottom are not necessarily those that were hardest hit by foreclosures. The communities that are strongest today are those that are clearly most desirable. When the market gets soft, the people who in previous markets couldn't afford their first choice market had to settle for their second or third choices. But thanks to the opportunities in today's market, they are better able to buy into their first choice communities and neighborhoods. It goes back to supply and demand. Those communities that have good schools, good local economies, diverse activities and, overall, are just considered more desirable places to live, are once again driving demand.

What do you recommend to today's home buyer?

"Buyers need to understand right now that the market is a little schizophrenic. You know it is probably the time to buy and you also know that the market has been challenged. But you may see that in certain markets, we've had lower prices and decreasing numbers of available homes for sale. In that type of area, you might expect to get a lower price than a year ago. But you also need to realize that the market is picking up and that in many markets, we've probably hit bottom. For example, if you want to be where the best schools, best hiking trails and best parks are, that will probably be where the best recoveries are likely to occur. To properly ride the wave, you should find the houses where people want to be. The problem is that if you wait a year, you're probably going to run up against a lot of challenges: increased interest rates, increased buyer demand, and lower available housing inventory. The combination of those factors is what is creating more urgency in the more desirable markets today."

What do you anticipate for real estate in 2010?

What we're going to see in 2010 is probably the more desirable neighborhoods seeing a modest increase in sales price and a decrease in the number of homes on the market. I predict that we are going to see an overall stabilization in the marketplace. We are probably going to see on the whole a slight increase of the average sales price of homes. We're probably going to see a stabilization of the market. We probably won't ever return to the sales levels of 2005 and 2006 because so many of those sales were artificially created. Fortunately, I believe that we are now on the right path toward modest, sustainable growth.

When will the market begin its turnaround? What about the luxury market?

We should see a turnaround of the housing market in 2010. I believe the luxury market will be the last market to turnaround. It was the last market to experience a turn down and it will probably be the last market to experience an upturn. As business and the economy strengthen, we'll once again see a more robust luxury market.

The bottom line is there is a lot to be confident about in relation to the housing market: the tax credit; attractive interest rates; buyer demand in the entry level market; opportunities in the move-up buyer market; and sustainable growth. It all adds up to what we anticipate to be a very productive 2010.

If you would like more information about the opportunities that are available in today's housing market, This email address is being protected from spambots. You need JavaScript enabled to view it..

Mortgage News Daily

  • Builder Confidence: Strong but Unchanged, Material Costs Rising

    Posted To: MND NewsWire

    As analysts had expected, the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) remained at 68 this month. The reading still indicates a strong level of builder confidence in the new home market, but the HMI has been relatively static for months, moving within a two-point range, 68 to 70, since March. NAHB surveys its new home building members monthly on their attitude toward the market. They are asked to grade their perceptions of the current market and the market they expect over the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

  • Builders Heeding Advice to Go West. Or South

    Posted To: MND NewsWire

    The National Association of Home Builders (NAHB) has plucked more information from the Census Bureau's Survey of Construction (SOC), this time to paint a portrait of the state of residential permitting nationwide. Danushka Nanayakkara-Skillington writes in NAHB's Eye on Housing blog that permits for single-family construction issued during the first five months of the year were up by 8 percent over the same period in 2017. The National Association of Home Builders (NAHB) says the nationwide total for the period is 363,327 compared to 336,410 for the year-to-date (YTD) through May 2017. The activity however, was skewed toward the West and the South. Permits were issued at a similar seasonally adjusted annual rate in May of 363,700, an 8.6 percent year-over-year increase. The Bureau will issue...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

  • MBS Day Ahead: 2018 Rate Hike Odds Provide Backdrop For Powell Testimony

    Posted To: MBS Commentary

    Fed Chair Powell begins 2 days of semi annual congressional testimony today with the Senate Banking Committee at 10am. In recent years, this testimony has devolved into laughable political theater, mostly. That said, today's has a few redeeming qualities. First off, the Senate session tends to be slightly less theatrical than the House version coming up tomorrow. Beyond that, we know from Powell's previous congressional appearances that he tends to navigate the political posturing with more grace than Yellen--something that tends to help move the legislative blowhards through their grandstanding more quickly. Finally, despite all the theater, the fact remains that this is a venue for the Fed Chair to answer unscripted questions. Therefore, there will always be big market movement potential...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

  • Sales and Broker Products; Freddie and Fannie Updates

    Posted To: Pipeline Press

    “What can be asserted without evidence can also be dismissed without evidence.” While you ruminate on that one, there continues to be evidence and reminders that potential home buyers are having trouble coming up with “skin in the game,” aka, a down payment. It would take an average of 36 years for someone earning the median income in D.C. to save for a 20% down payment on a median-priced house, according to a recent report from U.S. Mortgage Insurers. Still, try being a teacher in San Francisco earning $70k/year saving up for a median-priced $1.6 million home. Capital Markets Rates? Every day, a little up, a little down , although many days borrowers wouldn’t notice the difference on rate sheets. Yesterday they went up a little bit as bond prices dropped (there’s...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

  • MBS RECAP: Slightly More Active Than a Typical Summertime Monday

    Posted To: MBS Commentary

    Summertime Mondays are notorious for light volume and seemingly random trading. Today was a slightly more active than normal in that regard, largely due to the presence of top tier data (Retail Sales) and a geopolitical event in the form of the Trump/Putin summit. The latter was never expected to offer any major revelations, but the former is always capable of delivering some bond market momentum. Bonds were just slightly weaker heading into the Retail Sales numbers. The weakness continued after the report came out stronger than expected. But wait! It was 0.5 vs 0.5, so how was it stronger than expected? The key difference was in the revision to last month's report (previously 0.8 but now 1.3%). The "core" sales reading was also revised higher. Additionally, several GDP estimates...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

  • Mortgage Rates Edge Higher

    Posted To: Mortgage Rate Watch

    Mortgage rates fell to their lowest levels since late May as of last Friday. Today, then, would be the 2nd best day since late May. Rates edged slightly higher to begin the new week as bond markets (which underlie rates) came under modest pressure for several relatively inconsequential reasons. The net effect was a small adjustment in the upfront costs associated with prevailing rates. In other words, the actual interest rate governing your monthly mortgage payment hasn't changed in weeks, but the upfront costs tied to that rate are slightly higher for lenders today compared to last Friday. Loan Originator Perspective My clients and i continue to favor locking in once within 30 days of closing. Only loans i would consider floating would be those that can lock on a shorter time tomorrow or if...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

  • MBS Week Ahead: Another Week, Another Chance to Run Same Old Play

    Posted To: MBS Commentary

    This is the off-season for bonds, but they still have to show up for the game every day. The coaching staff (aka the traders turning the cogs of the underlying bond market) have been running the same play every day since June 27th . It's a play that's been working on both offense and defense, thus providing an easy button for the entire team (even if it's also a "boring button"). No one gets hurt, and no one has a ridiculously good time--typical off season. So what's the play in question? Simply put, bond market players have been tasked each day with playing harder and harder defense whenever yields rise toward 2.88. On offense, they only push hard enough to get yields to 2.825, as seen on the following chart with numerous bounces on the lower teal line. I included...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

  • Broker Products; Blockchain Transaction; Input on DACA Loans

    Posted To: Pipeline Press

    When Costco rolled out its mortgage option to members, many lenders were very concerned. But despite great potential, Costco/First Choice has not become the #1 lender in America. I heard something interesting last week: Costco doesn’t make much money selling products, it makes all profits from membership fees . Despite Bank of America’s great quarterly results this morning, lots of lenders aren’t making much money selling their products either, unfortunately, and the number of residential lenders who haven’t adjusted their headcount, compensation plans, or business models in reaction is dwindling . (The latest example is job cuts at State Farm .) If a branch or channel hasn’t been profitable for a while, ask what’s going to happen, if anything, to reverse...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

  • Permit to Completion - Builder Timeline Depends on Where and Why

    Posted To: MND NewsWire

    Despite complaints about labor, lot, and material shortages, builders needed no more time to build a home last year than they did in 2016. The time did increase compared to 2015 by about two weeks. Using data from the Census Bureau's Survey of Construction (SOC), the National Association of Home Builders (NAHB) concludes that the average time to build a single-family house was 7.5 months. The actual building time was about 6.5 months following a typical delay of around 30 days after the permit was authorized. Data from the 2015 survey showed the time from permit to completion at 7 months. The range however is wide, from less than a month to more than 6 years. Much depends on who is building the house, for what purpose, and where. , writing in NAHB's Eye on Housing Blog, says that houses built...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

  • MBS RECAP: Bonds Gain Despite Data Surprise and Stock Rally

    Posted To: MBS Commentary

    Before any discussion about market movement in July, we have to set the stage with some disclaimer about "slow summertime trading." That was the subject of this morning's commentary ( read it here , if you like). With that out of the way, we're equipped to pay the appropriate amount of attention to today's seemingly interesting events. First up, we had a reasonably strong move in European bonds overnight help set a mildly positive tone for the start of domestic trading. The biggest volume spike of the early morning came at 8:30am in response to the Import Price data, which came in much lower than expected. Bond yields/prices, themselves, only moved a bit, however--a fact that likely reflects the nearness of yields to the lower end of their prevailing range. The other notable...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Residential Real Estate Sales

Westchester County, NY

 
Westchester Top 5 Real Estate

2009-2010 Top 5

Top Real Estate Agent Award

Westchester Magazine Top Realtor

2010-2011 Westchester Top Realtor

Westchester Magazine Top Realtor Award

For more information about fair housing practices, please visit the HUD website.


Bonnie Koff  |  Licensed Associate Real Estate Broker  |  William Raveis Legends Realty Group  | Tarrytown Office 
914-332-6300  |  37 Main Street, Tarrytown, New York 10591  |  Email