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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

  • Existing Home Sales Reverse Course, Down 3%

    Posted To: MND NewsWire

    Existing home sales put an end to two straight months of gains , retreating in April on both a monthly and annual basis. The National Association of Realtors® said the sales of single-family homes, townhouses, condos, and cooperative apartments dropped by 2.5 percent from March's estimate of 5.60 million to a seasonally adjusted annual rate of 5.46 million. That put sales at a 1.4 percent deficit when compared to April 2017. It was the second straight month that sales have lagged on an annual basis. Economists polled by Econoday were not looking for greatly improved numbers but results even missed that target . Estimates ranged from 5.48 million to 5.64 million. The consensus was for no change from the March 5.60 million number. Single-family home sales were down by 3.0 percent to a seasonally...(read more)

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  • Home Price Index Shows Signs of Losing Momentum

    Posted To: MND NewsWire

    Home prices in the first quarter of 2018 were 1.7 percent higher than at the end of the fourth quarter of last year. The Federal Housing Finance Agency said its Housing Price Index (HPI) gained 6.9 percent when compared to the level at the end of March 2017. On a monthly basis prices were 0.1 percent higher than in February. The month over month rate of increase in March was significantly higher than the 0.6 percent gain from January to February, but the annual increase slowed compared to the previous month. The rate of appreciation from February 2017 to February 2018 was 7.2 percent. "Home prices continue to rise across the U.S. but there are signs of tapering ," said Dr. William Doerner, FHFA's Senior Economist. "Since housing markets began to rebound in 2012, house price appreciation has...(read more)

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  • MBS Day Ahead: Green Shoots? Maybe. Opportunities? You Bet!

    Posted To: MBS Commentary

    One short week after hitting the worst levels in nearly 7 years there's suddenly a semblance of hope again for bonds. It was one thing to see last Friday's correction--which merely stopped the most abject bleeding--or the first 2 days of indecisive stability this week. It was another thing to see an unmistakably strong rally yesterday followed by even stronger levels today. The critical development over the past 48 hours for US bond markets has been the break below the 3.05% floor that had blocked progress since last Friday. If we wanted to be extra cautious about where we set our technical levels, we could use the previous 4-year ceiling of 3.04% and reserve judgment until bonds broke and closed below. With yields starting out the day well under 3.0%, it seems like there's not...(read more)

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  • Broker Products; Upcoming Events; Financial Services and Acquisitions

    Posted To: Pipeline Press

    The conference this week? I attended various presentations dealing with housing finance and the economy in general. Even in the face of rising rates, the outlook on the housing market is bullish for prices – but with continued inventory problems. Labor shortages and environmental provisions/local zoning are expected to continue to contribute to extended times to complete the construction of new homes. Now that we are a decade past the financial crisis, we are seeing increased non-agency mortgage lending, as reflected through securitizations, and it is expected that the non-QM market will continue its expansion but still small on a relative basis to QM. Demographic factors play a dominant role in the housing market as millennials embrace homeownership, just as we knew they would. Given...(read more)

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  • Tax Cut Gains Forecast to Fade Away in 2019

    Posted To: MND NewsWire

    Fannie Mae is backing down slightly on its economic forecast for the remainder of 2018. The first quarter GDP growth of 2.3 percent was the slowest in a year , down from 2.9 percent a year earlier. The company's economists, led by vice president and chief economists Doug Duncan, say they expect growth to pick up later in the year but the economic boost from last December's Tax Cuts and Jobs Act and this February's Bipartisan Budget Act of 2018, will fade next year and the labor market will tighten more than previously thought. The earlier full-year 2018 forecast remains at 2.7 percent, but the company is lowering its projections for 2019 by two-tenths to 2.3 percent. They see substantial downside risks to their forecast , especially the rising price of oil. Crude prices have risen by about...(read more)

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  • April Delinquencies Improve Despite Historic Pattern

    Posted To: MND NewsWire

    Loan performance continued to improve in April, even though Black Knight says mortgage delinquencies have a historic pattern of increasing during that month. The overall delinquency rate declined 1.6 percent from March to a national rate of 3.67 percent. That rate is down by 10.17 percent from the previous April. Black Knight notes, in its "first look" at the month's loan performance data, that not only did April's improvement buck a trend that has affected the month's numbers 85 percent of the time, it also ended seven months of annual increases, behavior that started with last fall's hurricanes. Areas in Texas, Florida, and Georgia where Hurricanes Harvey and Irma hit drove the improving numbers. However, over 90,000 mortgages on homes impacted by the storms are still seriously delinquent...(read more)

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  • MBS RECAP: Nice Gains More About Europe Than Fed

    Posted To: MBS Commentary

    Bonds surged to significantly stronger levels in the presence of the Fed Minutes today. Any time we see strong gains on a day with a Fed release, chances are the Fed is behind the move. Incidentally, that's NOT the case today (spoiler in the headline, I know). So how did Europe trump the Fed in terms of bond market impact? In short, this is all about Italian political drama. The two anti-Eurozone parties who are forming a coalition government in Italy are waiting for confirmation of their staffing choices from the Italian prime minister (yeah... things work differently over there). One of the picks had previously referred to the Eurozone as a noose around Italy's neck. It's not overboard to consider this political regime as potentially pushing Italy away from the Euro. That's...(read more)

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  • Mortgage Rates Drop to Lowest Levels in 2 Weeks

    Posted To: Mortgage Rate Watch

    This week hadn't been too traumatic for mortgage rates through yesterday afternoon, but neither had it been positive in any noticeable way. That changed today as rates fell abruptly to the lowest levels since last Monday. Granted, at the time, last Monday's rates were still pretty close to the worst in 7 years, but the point is that we've managed to find our way back from the even higher rates that followed. Help came chiefly from European political developments where Italy is a day or two away from confirming a government that could end up pushing the country out of the Eurozone . Even though that's far from guaranteed, the mere risk of such a thing is enough to drive investors toward safer haven bonds like those issued by Germany or the US. In general, excess demand for bonds means rates...(read more)

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  • Houses Passes S2155, Unwinds Less of Dodd-Frank Than Hoped

    Posted To: MND NewsWire

    The House of Representatives passed a sweeping overhaul of regulations included in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act on Tuesday. Senate Bill 2155, which passed the upper house in March, received a 258 to 259 vote in the House. It now goes to the White House for what is expected to be certain presidential approval. The bill did not go nearly as far as the House had hoped in rolling back Dodd-Frank. Leadership agreed to vote on the compromise bill negotiated in the Senate between Republicans and Democrats only after a promise of a vote latter this year on other changes House members, especially House Financial Services Chair Jeb Hensarling (R-TX) were demanding. According to Bloomberg, the legislation gives smaller banks relief from post-crisis rules that they...(read more)

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  • New Home Sales Continue to Improve on Annual Basis

    Posted To: MND NewsWire

    New home sales dipped in April, a reversal that was expected by many analysts . The U.S. Census Bureau and the Department of Housing and Urban Development said sales of newly constructed homes during the month were at a seasonally adjusted annual rate of 662,000 units. This is 1.5 percent below the revised rate of 672,000 units in March. The March estimate was revised down from 694,000 units, erasing much of that month's reported 4 percent gain. Despite the downturn, sales are now running 11.6 percent above the April 2017 estimate of 593,000 sales. In March the year-over-year gain was reported at 8.8 percent. Analysts polled by Econoday had expected sales to be in the 650,000 to 692,000 range. The consensus was 677,000. On a non-seasonally adjusted basis there were 64,000 new homes sold in...(read more)

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Residential Real Estate Sales

Westchester County, NY

 
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2010-2011 Westchester Top Realtor

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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