June 10, 2020

What Will Be the Effects of the Coronavirus Bailout Packages on Long Island Real Estate?

The coronavirus radically altered the trajectory of 2020 for nearly every business and industry in the United States. Faced with a large-scale shutdown and millions of people out of work (peak numbers show that 42.6 million people or more than a quarter of the labor force filed for unemployment this spring) the government reacted by passing a series of bailout packages and stimulus items. Altogether, more than $3 trillion dollars was promised to help the American people get through the worst months of the crisis.

With states reopening and some people already getting back to work (recent reports indicated 2.5 million jobs were added during the month of May), it’s time to start thinking about what the legacy of the coronavirus bailout packages will be and how it will impact both the economy and the housing market.

 

Where Did All the Money Go?

Most business sectors and private citizens received some level of benefit from the $3 trillion worth of aid money this spring. Under the Paycheck Protection Program (PPP) and Economic Disaster Loan program, most businesses that applied received some form of assistance. The Paycheck Protection Program alone put more than $500 billion dollars into the hands of small business owners. According to CNN, another “$500 billion was given to the Federal Reserve so that it could design lending programs for struggling companies.” This $500 billion is aimed at assisting corporations and large industries that were devastated by the shutdown, like airline companies. Most working individuals qualified for and already received their $1,200 stimulus checks in the mail or as direct deposits to their bank accounts. This accounted for almost $270 billion worth of the original $3 trillion. Another $90 billion was used to expand unemployment benefits, of which one in four American workers filed for this spring. Finally, hospitals, state and local governments, farmers, and schools also received portions of the $3 trillion in aid.

 

What Lasting Impacts Can We Expect for the Housing Market?

While the US housing market remained remarkably resilient in the face of the pandemic, as the real estate industry swiftly adapted to new and changing regulations in order to keep transactions moving, we expect the biggest industry impacts are still to come.

People are going back to work – but how many will get their old jobs back remains to be seen. Some people may be forced to find new employment altogether or take a pay cut as individual industries struggle to recover from the pandemic. In addition, the introduction of $3 trillion dollars into the economy could lead to hyperinflation and rising costs of living across the country. All these concerns could lead to an increase in short sales and foreclosures as homeowners struggle to keep up with their bills and pay their mortgages.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed this spring and as of late May, 4.76 million homeowners were in forbearance programs. The CARES Act offered two key relief options for homeowners:

 

1) It put foreclosures on pause. That 60-day moratorium began on March 18th, 2020 and ended on May 17th, 2020.

 

2) It also allowed homeowners to request forbearance for up to 180 days and then additionally granted individuals the right to request an extension for another 180 days beyond that. Forbearance means that a homeowner could essentially pause their mortgage payments for a specific amount of time. However, it does not erase those payments. They must still be repaid, though what that repayment looks like differs from person to person. It’s this later piece that has real estate industry experts most on guard. Homeowners who requested forbearance may have agreed to terms of repayment that will be extremely difficult, if not impossible, for them to meet depending on their employment and economic status at the time those payments come due.

 

We had predicted earlier this year that the spring 2020 real estate market would be especially busy in Long Island and the coronavirus appears to have only put most people’s buying and selling plans on hold until summer. While we are seeing quite a bit of buyer demand in our Long Island real estate market and new homes coming on the market as restrictions ease, only time will tell how the rest of 2020 and 2021 will bear out. With the memory of the 2008 housing crisis still fresh in people’s minds, it can be disheartening to hear that short sales and foreclosures may be coming back. However, the conditions that led to the 2008 housing crisis are dramatically different than what we are experiencing now. This leads us to conclude that the predicted uptick in distressed sales as a result of the coronavirus pandemic may not be nearly as bad.

 

As always, if you have any questions about how the market in your neighborhood or zip code is doing, reach out to us to request a personalized market report. We would also be glad to provide you with a free estimate of your home’s current value.

May 6, 2020

Coronavirus: A New Normal for Buying and Selling Real Estate on Long Island

Nearly six weeks after New York locked down in an effort to control the spread of the novel coronavirus and provide some relief to hospitals, residents of Long Island and New York State have seen the first cautious glimmers that life might be returning to normal or at least a new version of normal.

On April 28th, Governor Andrew Cuomo released his most detailed reopening plan yet. Currently New York has a stay-at-home order in place until May 15th. After that, Governor Cuomo indicated that businesses in upstate New York and industries with lower exposure risks for workers might begin to return to work towards middle to late May.

Governor Cuomo, like most of the leadership around the country, is considering a phased reopening schedule, with more essential jobs that present relatively low risk to workers returning to work ahead of jobs that are less essential and present higher risk of exposure. In particular, manufacturing and construction were highlighted as two sectors that may be returning to work sooner rather than later.

Of course, a return to work is not a return to life as we knew it. With no vaccine available and necessary supplies for treating coronavirus patients running low, social distancing, masks, and limited gatherings are likely to be features of our daily life for the foreseeable future. Precautionary measures are our best defense against an invisible enemy, particularly in more densely populated areas like New York City.

Real estate is currently considered an essential business, though showings and open houses need to be conducted virtually. As we move forward into our new normal, we can expect these restrictions to relax somewhat. Looking at other states as a model for how we might do business in a less controlled environment, here’s what we think buyers and sellers can expect for the months ahead:

Masks and Gloves Will Be Required for All Showings and Inspections

Whether or not masks continue to be mandated in public places, we can expect that most sellers will ask that buyers not tour a home unless they’re wearing a mask and gloves. Similarly, we can expect that individual companies will require their workers to don similar protective gear both to limit their own exposure and to reduce risk for the customer. This would include people like home inspectors, plumbers, contractors, photographers, videographers, home stagers, and more. 

Virtual and Private Tours Will Increase

Even if we get the official nod to begin holding open houses again, we expect that virtual and individual viewings will become much more of the norm in the months ahead. It’s not unreasonable to think that sellers will require interested buyers to view their video walkthrough or 3-D tour before booking an in-person showing to ensure that the only buyers who are coming into the home are the ones that are serious about buying it.

Buyers Will Increasingly Need Pre-Approval Letters to See Homes

Though requiring a buyer to furnish a pre-approval letter before touring a home is much more common in the luxury market, we can imagine that many sellers at all price points will ask for that pre-approval before letting buyers into their properties. This would be done in an effort to reduce foot traffic from casual browsers and those who are not qualified to buy the home.

Increased Sanitation Procedures Will Be Needed

We know that the coronavirus can linger on surfaces for hours or days so we expect that sellers and listing agents will enact new sanitization protocols. Things like spreading out showing appointments to allow time for the home to be cleaned and sanitized in between viewings or before the seller’s family returns to the property. Scheduling staging, photography, inspections and repair work on different days to decrease risk to all parties involved. In addition to the masks and gloves we mentioned above, we can also expect to see agents providing their clients with hand sanitizer and disinfecting wipes alongside informational sheets about the homes they’re touring.

Social Distancing Will Be Observed in All Facets of the Transaction

Most people have gotten the hang of staying six feet away from each other and we can expect this rule to become the new normal of the real estate world. No more shaking hands, hugging, or touching each other. Limiting the number of people inside a home, room, or office at any given time. Staying away from each other unless completely healthy. We have learned to effectively social distance and we will continue to do so until the threat of the coronavirus is over.

We are all learning a new way to live and conduct business. But the real estate industry is adaptable and we will all adjust to this new normalt if it means we can continue to help people buy and sell homes. Even as the worst of the pandemic raged in New York this spring, the housing market on Long Island kept moving. As life begins to move back to normal, we expect the spring and summer housing market to pick up again. People still need a place to live no matter what.

If you’re thinking of making a move this year, reach out to us. We’ll be happy to share what we at The Pesce Lanzillotta Team are doing to help make our buyers and sellers comfortable during this unprecedented time.   

April 16, 2020

The $2 Trillion Stimulus Package and What it Means for US Real Estate

On March 27th, President Donald Trump signed a $2 trillion stimulus package into law. The stimulus package is designed to provide relief for Americans who are struggling under the weight of the countrywide shutdown over concerns about the spread of the novel coronavirus.

 

While $2 trillion dollars is a lot of money, it’s important to know where that money is actually going to go, the impact it will have on the average American citizen, and how it will affect US real estate in the months to come.

 

What’s in the $2 Trillion Stimulus Package?

 

As of writing, the $2 trillion stimulus package is the largest aid measure in US history. It provides support for American citizens and businesses in a few notable ways:

 

-90% of Americans Will Receive a Check From the Government:

 

The most talked about part of the stimulus package is the checks Americans will receive in the coming months from the government. With 90% of Americans eligible to receive these checks, individuals could see up to $1,200 deposited in their bank accounts. Click here to see a full breakdown of the check payments based on income and marital status. 

 

-Unemployment Benefits and Insurance Have Expanded

 

With businesses across the US forced to temporarily halt and suspend their operations, many people have suddenly found themselves unemployed. In an effort to aid the millions of workers who suddenly have no income, unemployed workers can now potentially receive up to 39 weeks of unemployment benefits. The expansions in this area have also allowed groups like freelancers and gig workers to also claim unemployment.

 

-Small Businesses Are Eligible for New Loan Programs

 

Another key part of the stimulus package was the creation of new loan programs that small businesses can apply for. The Economic Injury Disaster Loan program is set to provide businesses with a loan of up to $10,000 that would be fully forgiven so long as the businesses continued to pay their employees and all necessary terms were met. Another new loan program, the Paycheck Protection Program (PPP) also allows businesses to apply for loans to help keep their employees on payroll. These loans will need to be partially repaid under the terms of the loan. Click here to see a breakdown of these two programs.

 

-Some Big Companies Will Receive Cash Loans

 

Along with benefits for small businesses, the stimulus package included cash for industry-specific loans for big businesses. Most notably, airlines and hotels will stand to benefit from these provisions. 

 

-Increased Aid for Struggling Hospitals

 

Aid dollars for the beleaguered healthcare system were a critical part of this stimulus package. As news outlets continue to carry reports that hospitals lack the necessary supplies to treat coronavirus patients, like ventilators and personal protective equipment (PPE), this funding is an important step in winning the fight against the virus.

 

 

Who Will Benefit from the Signing of the Stimulus Package?

 

The $2 trillion stimulus package is comprehensive in its provisions and as stated above, 90% of Americans are expected to qualify for checks from the government. Though with a population of over 300 million American people and nearly 17 million out of work, it may not be enough to take the sting out of the crisis.

 

How Will the $2 Trillion Stimulus Package Affect US Real Estate?

 

While the recent stimulus package doesn’t include any direct provisions for real estate directly, the fact that so many people will receive aid from the government is a positive. $1,200 per person may not be a huge amount, but for some it could be the difference between making ends meet or not at all.

 

We don’t know how long the country will continue to be shut down and how many small and large businesses will ultimately go under as a result of this crisis. But this initial support from the government for the average worker and the small business owner could go a long way to ensuring people can keep up with their mortgage payments and those who were looking to buy a home this year can keep moving forward with their plans. We believe that the housing market as a whole, and particularly here on Long Island, was in a great place before the outbreak of the coronavirus pandemic. This coupled with the governmental support we’re seeing leads us to conclude that while the housing market may experience an understandable downshift in the months to come, we believe it will bounce back quickly to pre-pandemic levels once the country goes back to work.

 

 

Looking for specific information about how the Long Island housing market is doing in your neighborhood? Reach out to us to receive a custom market report, click here to see the latest data for Nassau and Suffolk counties, or request your free online home valuation report here.

March 24, 2020

Coronavirus and the Long Island Real Estate Market

Coronavirus: it’s on everyone’s mind these days. Amid the fears of transmission rates and actually falling ill with the virus are very real concerns about how this pandemic will affect the economy and the housing market. There are plenty of people already saying we’re headed for a recession and that the real estate market will plunge back to the dark days of 2008 and 2009.

 

While we can’t predict the future, we can share what we’re seeing and experiencing here on Long Island as Realtors living in and serving this community. We’ve been forced to dramatically adjust our business amidst sweeping regulations and directives from the national and local government, the CDC, and the real estate governing body, the National Association of Realtors (NAR). However, the real estate market has not come to a grinding halt. Far from it.

 

Long Island Real Estate and the Coronavirus

 

As of writing, there are 9,351 active listings on the market right now in both Nassau and Suffolk County. 478 properties have gone under contract in the last week. On the closing side, 259 homes have closed in the last seven days in Nassau and Suffolk Counties. You can view specific market activity in your own neighborhood on our website here or reach out to us.

 

While the Executive Order by New York Governor Andrew Cuomo limits real estate agents to only the work we can do from home, necessity is the mother of invention and where there is a will, there’s a way. Property showings over FaceTime, 3-D virtual tours, and other creative solutions from sellers, buyers, agents, and other industry professionals have helped keep deals moving.

 

Outside of sales, there has also been a huge demand for rental properties on Long Island as people are leaving New York City to wait out the pandemic elsewhere. People with properties available for short-term rentals are finding themselves able to command higher prices as a result of increased demand. Some people have been able to rent their properties at peak summer prices now.

 

Predictions for Late 2020 and Beyond

 

While it’s too soon to say how home prices will be directly impacted, one thing we do know is that the Long Island real estate market started the year strong and all indications pointed to a busy spring and summer. When this crisis is over, we expect many buyers who may have temporarily suspended their home search to return to the market. Similarly, many sellers will still need to sell their homes – and may be even more motivated to do so quickly.

 

Compared to what was happening in the housing market in late 2008, not everyone is being severely affected financially by this crisis. Many industries are still doing quite well and some scrappy business owners have already pivoted their offerings to keep the lights on. It’s not unreasonable to believe that many people will emerge from the current crisis without significant financial damage and ready to move on with their real estate transactions.

 

Finally, there has already been an uptick in investor interest in US real estate. As in all financially uncertain times, investors with the means to do so often move their money out of stocks and bonds and into assets like real estate. Residential real estate investments represent a relatively safe investment option as their value will never go to zero and people will always need a place to live, no matter what’s happening in the world. Overseas investors are already used to buying properties sight-unseen, so the current limitations on in-person showings in New York and beyond do not present much of a problem at all. We expect that domestic and foreign investors will continue to purchase homes in the months to come, even if the average family finds themselves holding back.

 

 

If you are thinking of selling or buying a home in Long Island this year, let’s talk. We’ll help you create a strategy that fits both your goals and the current state of the housing market in your community. We are working hard to help our clients through this historic time and will do the same for you.

Feb. 28, 2020

Best Places to Buy a House in Nassau County, NY

Nassau County is a great place to live for those who want to be close to New York City without actually living the city life. The second-most populous county in New York, Nassau County is known for its great suburban neighborhoods, excellent public schools, rich history, and easy commute to the city.

Looking to move to Long Island? Check out our list of the 7 best places to buy a house in Nassau County, NY!

 

Great Neck Gardens, NY

Located on Long Island’s North Shore, Great Neck Gardens is a neighborhood within the larger community of Great Neck. Great Neck Gardens is the perfect choice for those who commute to New York City. Manhattan’s Penn station is only about half an hour away by train and residents of Great Neck Gardens also have access to public bus transportation.

Many people choose to purchase a home in Great Neck Gardens because of the excellent local schools. Niche.com rated the Great Neck School District the best public school district in New York in 2019. Great Neck Gardens was also ranked #2 on Niche.com’s lists of the best places to raise a family in New York. Most people that live in Great Neck Gardens own their own homes, rather than rent. If you’re looking to buy in this community, click here to start browsing available properties.

 

Syosset, NY

In 2019 Niche.com ranked Syosset the fourth best place to raise a family in New York. This charming village is located in the town of Oyster Bay and offers residents access to great public schools, parks, restaurants, and local attractions like the Cultural Arts Playhouse. Only about thirty miles from Manhattan, Syosset is a great place to consider calling home if you frequently commute into New York City. The city is accessible via the Long Island Rail Road (LIRR), public bus, or car.

If you’re looking to buy a home in Syosset, you’ll find plenty of single family homes, townhomes, and condos on the market at a variety of price points. Looking for a home of a certain age or architectural style? Start your search here.

 

East Hills, NY

East Hills is a village on the North Shore of Long Island that is part of the Greater Roslyn area. Roslyn itself was settled in the seventeenth century and was once known as Hempstead Harbor. Home to a top twenty public high school, East Hills is known for its fantastic local schools and great community. Convenient to Roslyn Harbor, Old Westbury, and other Long Island neighborhoods, East Hills is about twenty-five miles from Manhattan.

East Hills was once an enclave for the wealthy. Today it features diverse properties from estate homes to townhomes and even condos. Click here to explore homes for sale in East Hills, NY.

 

Manhasset, NY

In 2005, The Wall Street Journal named Manhasset the best town for raising a family in New York. Situated on Long Island’s North Shore, the hamlet of Manhasset continues to top numerous “best of” lists. In 2019, Niche.com ranked it #11 on its list of the best suburbs to raise a family in New York and #5 on its list of the best places to retire. Just twenty miles from midtown Manhattan, Manhasset is a great choice for families and retirees looking to own a home in a wonderful community close to the city with great local schools. In particular, Manhasset High School is one of the best public high schools in the nation.

Looking to buy a home in Manhasset? Manhasset has many gorgeous luxury estate homes for sale, as well as more affordable single family homes. Prices reflect the size, style, and desirability of this community. Check out current listings of Manhasset homes for sale here.

 

Garden City, NY

In 1927, Charles Lindbergh departed from Roosevelt Field in Garden City on his famous solo transatlantic flight. Though the airfield no longer remains, the Garden City Cradle of Aviation Museum marks the area’s contributions to American aviation history. The museum sits on the grounds of the former Mitchel Air Force Base. Today, Garden City is a thriving suburban community close to the borough of Queens that boasts excellent schools, an abundance of local industry, and convenient access to New York City via LIRR.   

Garden City’s inventory of properties for sale includes condos, townhomes, co-ops, and single family homes. Browse all homes for sale in Garden City now.

 

Plainview, NY

Plainview is one of the most popular neighborhoods in the town of Oyster Bay. Located on Long Island’s North Shore, Plainview’s history dates back to the seventeenth century. Once a farming community, after World War II the area underwent massive development as people moved from the city to more rural Long Island.

Plainview is ranked 17th on Niche.com’s list of the best suburbs in New York. Prospective buyers choose this neighborhood for the excellent local schools, abundance of beautiful parks like the Plainview-Old Bethpage Community Park, and easy access to the city. Start your search for homes in Plainview now – click here to browse available listings!

 

Jericho, NY

Once part of an area known as the “Gold Coast,” Jericho, NY is a top choice for prospective homebuyers. Situated on Long Island’s North Shore, this wonderful community is home to the famous NYCB Theatre at Westbury, great dining options, and fantastic local schools. In 2019, Niche.com ranked Jericho #1 on three separate lists: best places to raise a family in New York, best suburb in New York, and community with the best public schools in New York.

Jericho, NY also boasts some of the most beautiful real estate on Long Island. If you’re thinking of buying in this community, you can browse available homes in Jericho now.

 

Not sure which Nassau County neighborhood is right for you? Reach out to us – we can help you narrow down a list of prospective communities based on your needs. Click here to contact us or call (516) 888-9711 today!    

Feb. 12, 2020

Long Island Real Estate Market Outlook for Spring 2020

Thinking of buying or selling a home on Long Island this year? While it’s still February on the calendar, our mild winter weather and low interest rates have propelled the spring real estate market forward a few months.  

We began the year with low interest rates and this week, average rates for fixed mortgages dropped again to a three-year low. Good news for both buyers and sellers! When mortgage rates are low, buyers can afford to buy more expensive homes. Increased affordability for buyers helps home values increase. When there are more buyers who can afford to buy your home, it increases the chances you’ll receive offers at or over asking price as buyers compete to get their offer accepted. As interest rates edge up, it cuts into what a buyer can afford and pushes home values down.

Current low interest rates have driven people into the market. We’re seeing many buyers out in the market looking for homes, especially at the non-luxury price points (under $850,000). However, housing inventory is currently low and there are not many homes on the market for them to buy, which means many properties are selling quickly and over asking price.

At the other end of the price spectrum, the luxury market is moving a bit slower. While prices are still strong overall, they have softened a little over the last year. Homes are also spending more time on the market.

Below you’ll find current market reports for both Nassau and Suffolk Counties, along with our predictions for where the spring real estate market is headed. To request a custom report for your neighborhood or ZIP code, contact us.

Spring 2020 Market Outlook for Nassau County

In January, the median price for a single-family home in Nassau County was $550,000. That’s up 1.8% from last year at this time. Condos and co-ops also posted strong price gains. The median price for a condo was $545,000, an increase of 4.8% over last year. However co-ops experienced the largest price jump, increasing 10.1% to $258,750! Click here to view our in-depth January market report for Nassau County.

With lots of buyers in the marketplace and interest rates not predicted to significantly increase, we expect to see home prices continue to post year-over-year gains through the spring.

Spring 2020 Market Outlook for Suffolk County

As in Nassau County, properties in Suffolk County posted year-over-year gains in January. The median price for a single-family home increased 5.4% to $410,000. For condos, the median price was $324,000. This is an increase of 6.2% from last year. Finally, co-op prices jumped 7.7% to $145,500! Click here to view our January market report for Suffolk County.

As in Nassau County, low interest rates, low inventory, and plenty of buyers are all indicators that prices will remain strong through the spring months.

Long Island Luxury Real Estate Market Spring Report

We define luxury real estate as those properties listed at or above $850,000. As mentioned above, the Long Island luxury real estate market is off to a slow start for 2020. In Nassau County, the median price for a single-family home was down 0.4% to $1,145,000. The median price for a condo also fell 0.3% to $1,146,351. In Suffolk County, the median price for a single-family home was actually up 4.5% to $1,150,000, but condos fell 0.5% to $950,000. Click here to view individual reports for luxury real estate in Nassau County and Suffolk County.

While the Long Island luxury market likely will remain lukewarm this spring, home prices overall should remain strong.

 

Start your home search here – we have all properties listed for sale in the Long Island area. If you’re a seller, we offer free home valuations. Just click here to request your online valuation or reach out to us for a custom report. With millions of dollars in Long Island real estate sold, we are your trusted resource whether buying or selling!  

May 15, 2019

Is it a Good Time to Buy? or Sell?

How’s the market, is it a good time to buy or sell a home? This is a question that I am constantly asked when speaking to almost anyone about the current state of the real estate market, and if I am being honest – I would prefer not to give a straight answer.  The reason being is that, I can in good conscious give you a reasonable argument in any direction.

“Of course it’s a good time to buy.  Interest rates are at historic lows and borrowing money is cheap.  You should buy now and lock in a low interest rate!”  On the other hand, interest rates and asset prices have an inverse relationship.  Consequently, (among other factors), home prices are so high because interest rates are so low.  “If you wait until rates go up a little, then asset prices will drop and you can purchase your home at a cheaper price.”

Well what about selling, is it a good time to sell? Again, it can go either way.  “Yes! You should absolutely sell now.  We have been in a 10 year bull market and a period of economic expansion since the 2008 mortgage crisis.  If you look back at history, the economy goes through cycles of expansion and contraction to one extent or another every 5-7 years.  Therefore, if history is any indicator then we are due for some degree of a correction and you should cash out now while we are at the peak!”

But wait…What about the other side of the coin? Well new constructions are selling like hotcakes, however if you have a home that is older and outdated, then maybe you shouldn’t sell now.  For the most part the overwhelming majority of today’s buyers want a home that is new or newly renovated - turnkey, with the white kitchen, quartzite counter tops, the light neutral paint colors, new or refinished hardwood floors, and fresh moldings throughout.  So, if you have an older home then buyers are going to want a very steep discount.  First, they will take into account the cost of the work to be done.  Which unfortunately, labor and material costs are very high right now.  Second, in today’s world where usually both spouses/parents are working, many buyers simply don’t want to deal with the hassle of renovating a home.  As a result, you can take an extra chunk off the purchase price simply because a buyer doesn’t want to deal with a “fixer upper”.  It is an inconvenience for them, and time is money so if they can’t get it at a steep discount then they will most likely pass.  In conclusion, if you have an outdated home, unless you’re willing to sell it at a discount then maybe you should wait, or consider renovating first. 

The point I am trying to make here is that there are so many variables that come into play when deciding if now is the right time to buy or sell a home, that it’s really not a question that can be given a straight answer.  Yes, there are a few truths that are undeniable and have a big impact on the decision.  Inventory is relatively low, interest rates are as well, and it is more of a seller’s market.  Yet, the fact remains that no one has a crystal ball and we are in a time where there is so much economic and political uncertainty that who knows what the future holds.  Trying to time the purchase or sale or your home is like trying to time the stock market.  No one knows what the future holds and there are too many variables to accurately assess, analyze and understand the cause and effect relationship between that it’s simply not practical for the majority of consumers to be able to consistently time a residential purchase correctly.  For instance, one minute trade talks with China are going very well, and the market is up.  The next day trade talks are deteriorating and the market is down.  One day the fed is going to hike rates, the next there will be not rate hikes for all of 2019, and the next day there is a good chance of a rate reduction before the end of the year. 

Thus, how do you correctly answer the question – is it the right time to buy or sell?

Well, if someone wants a generic answer then I would say, generally speaking it is a good time to sell.  Interest rates are historically low, housing inventory is also relatively low - while buyer demand remains strong, we have been in a period of economic expansion for 10 years, and based on history we should soon be due for some type of correction, contraction, or even recession.  However, that of course is not a 100% guarantee and our economy could remain strong for the next 6 years.  Conversely, if you want to buy, then for all of the reasons just mentioned you may benefit from sitting on the sidelines for a while longer, seeing if “history repeats itself”, and then swoop in to buy at a significantly reduced price.  Once again however, there remains the possibility that the economy remains strong for another 6 years and you’ve now pushed off your purchase (and potentially your’ life) for an unreasonable amount of time, while continuing to throw money away on rent.

…And so, all of this brings me to the point I have been wanting to make all along.  My preferred way to answer the question of, “is it a good time to buy or sell a home?” is to ask more questions; because like most things in life, the answer is not black and white.  It is gray and situational.  The reason being is that most times a home purchase or sale is due to a life event – you just got married, you are having your first kid, you are having your third kid, you got a divorce, all of your kids have now moved out, you are re-locating for work, etc.  The right way to answer this question, is to understand the motivation for buying/selling, discussing the persons finances, talking through the alternative options, and knowing how long a person would plan on staying in there next place.  Only until you get a full scope of the picture can you accurately advise someone on whether or not a home purchase or sale would be a wise move at a particular point in time.

April 12, 2019

Turbulent Mortgage Rates

Mortgage rates in the last 5-6 months have seen some turbulent changes with reactions from Federal Reserve policy.  Mortgage rates have a direct correlation to home valuations.  As interest rates go up, and the cost of borrowing money increases – asset prices go down.  The reason behind this is that incomes don’t change very quickly over time (for most people).  So, people have a finite dollar amount in mind that they’re able to afford every month in a mortgage payment – and whether that lump sum includes more interest, more principal, more taxes, or more insurances doesn’t matter to them, so long as it fits in their budget.

Late last year in the November we saw interest rates pass the 5% mark, which historically is still low but relative to the last ten years is very high.  In the new year, the Fed announced it would stop tightening and wouldn’t be raising rates this year at all.  In fact, mortgage rates actually fell to the low 4’s from over 5%.  This sparked a little refinance boom for lenders on borrowers who had closed on loans late last year.  So, what do we think is going to happen going forward?

Its important to note that the Federal Reserve Chairman is an elected official by the President of the United States.  While the chairman is elected by the president, it is important to note that the Fed is not supposed to conduct monetary policy as a result of any political influence.  Kind of interesting that the president, who gives you this big-time role, is not allowed to have any influence over you… wink wink…  In any case, there isn’t supposed to be any political influence because our monetary policy decisions are supposed to be made in the best interest of the American economy – not in any one person’s interest.  As the Fed raised rates leading up to the end of last year, we saw the stock market start to crash.  Once we saw the markets start to crash, Donald Trump started to speak out about the Fed’s role in that.  He has said on numerous occasions during rally’s and speeches that what the Fed was doing was going to crash the markets.  What he was saying was true, as raising interest rates too fast would slow any economy, but he’s doing it for political reasons.  Donald wants to get a second term, and he won’t get that second term if the economy is not doing well because of high rates and quantitative tightening.  So, he went after Powell, who reversed policy as a result.

Moving forward, with Donald having a clear influence on the Fed, I think we’re going to see low rates for as long as he’s in office.  In fact, I wouldn’t be surprised if they went back to quantitative easing again.  For the next two years at the very least, we think there is going to be low interest rates/rising asset prices/and strong housing markets.  If Donald gets re-elected, we’ll probably see more of the same until he passes the baton to the next guy or gal. 

March 13, 2019

Neighborhood Realtor? Or The Realtor who has Reach?

This is the great debate for sellers in today’s fast changing world.  We’re caught in this age of time where we have these extremely powerful technologically based tools, but real estate is still very much a local business.  In todays world, most sellers have the choice to hire either the broker who only does business in one or two zip codes or the agent who covers huge geographies.  So, who’s better? What’s the difference between the two? In this blog we will answer these questions and discuss where we think things are headed.

Once upon a time there was an MLS truck that used to deliver what looked like a phone book every morning to every real estate office.  Agents used to flip through these phone books every day to see all the new properties to hit the market.  They would memorize the inventory and study what went into contract and what sold.  Consumers used to have to actually go to those real estate offices and meet with agents who had these books, just to see what was new on the market.  This was a time when realtors held all the cards.  They held all the data with regards to what was actually on the MLS, because it was not available direct to consumer on the internet.  This is how your “neighborhood realtor” came to be.  At this time, agents could only know and consume the data that existed in their town because it was in their head by memory, and the book was as thick as the yellow pages.

A neighborhood realtor certainly has some advantages.  They know all of the little nuances of the neighborhood.  They know every block, every park, every school, nearby shopping locations, etc.  Their business model is to list as much property in a specific neighborhood as possible and try to corner the market.  If they can list a good majority of homes in that market, then they’ll also get a chance at representing buyers in that market who came to see their listings unrepresented.  They also try and move those buyers into the inventory that they hold as a way for them to be able to sell off their own listings.  While this method of selling homes works, some would consider it passive.  The basis of this entire method of selling property is that your listings are the “bait” for buyers.  Most agents that run this model are leveraging their listings to generate more business, without carrying any marketing expenses (other than the content they generated for the listing itself). 

There is this new breed of listing agents, that are technologically inclined.  They understand digital marketing, and are leveraging it to cover wider geographic areas and get their sellers more exposure.  People today are spending a disproportionate amount of time on our digital devices.  Whether it be your iPad, iPhone, Samsung galaxy, etc. – the world is at your fingertips with these devices.  Need a stock quote? An answer to any question in the world? Need to tell a friend you miss them?  Want to congratulate someone on a job well done?  Listen to your favorite song?  All of these things can be done instantaneously on these devices.  This is why our world relies on them so heavily, they’re your one stop shop to everything – including shopping for homes. 

So how are these new age agents leveraging this technology?  In the world of marketing, nothing is more powerful than the digital strategies that exist today.  Social platforms such as Facebook, Instagram, Snapchat, Linkedin, etc – are mining our data everywhere you go on that device.  With that being said, they know when you’re in the market to buy or sell a home.  So, these agents are tapping into this technology to build profiles of people who they think will be a fit for their listings – and then they’re marketing their listings directly to these consumers.  With this strategy, you can reach people all over the geography of your choice that fit the criteria for someone who’s interested in buying the house your selling.  You can get outside of the town the house is in, and market to people coming from the city and moving to the suburbs.  Your reach expands to a much broader demographic, and you can pinpoint people who are specifically looking to search for homes like yours.  The one caveat that exists with this form of marketing is that it costs money.  Most agents are cautious about investing a significant amount of money into running these ads, with the fear that the house may not sell.  This is why the more successful agents are using this method, because they sell the volume needed to be able to have a significant marketing budget for a home.

Furthermore – a realtor who does business in multiple places may be a member of multiple real estate boards.  There is an NAR statistic that 90% of buyers are represented by a realtor.  In a geography like Long Island, we know that a lot of our buyers are coming from the city.  The city is a completely different real estate board from Long Island.  If you’re an agent who is actively involved in multiple real estate boards where the buyers are moving between these two places, then you have a higher chance of finding a buyer through the other boards.  An email to 30,000+ realtors in the city for a property that’s for sale in a commuter town on Long Island will 100% garner their attention and possibly a response with an interested buyer.    

In the future, I believe that you’ll only see teams of agents who cover huge geographies.  Its already happening now, as the highest performing teams are covering multiple cities in different corners of the county.  The neighborhood realtor still has a significant place in todays market, but as people start to understand this technology things are going to change.  People will prefer that their home have its own marketing budget that drives ads in front of viable buyers across a 50-mile geography leaving no stone un-turned.  For now, some people are still concerned about being able to sell a neighborhood – but quite frankly that’s something that can be done after a quick conversation with the seller.  The ability to cast a wide net, push as much traffic through the door as possible, and generate offers through technology will soon supersede the local knowledge of the neighborhood realtor.

March 6, 2019

5 Questions for Sellers Interviewing Real Estate Agents

How to Interview a Real Estate Agent:

 

Smart consumers interview potential real estate agents before they decide which agent they want to hire. Just as you're sizing up the potential for a good fit, the real estate agent will likely be interviewing you, too. Be wary of agents who don't ask you questions and probe for your motivation. You wouldn't work with just any agent off the street, and good agents are selective about their clients, too.

Here are 5 questions you must ask when you start your interview process:

1)    What Is Your Best Marketing Plan or Strategy for My Needs?

As a seller, you'll want to know exactly how the agent will sell your home. Is a direct mail campaign appropriate? Why or why not? Where and how often does he/she advertise? What kind of photography does he/she offer? Does he/she market online? What steps will he/she take to prepare your home for sale? Most importantly, ask if there's anything about your home that he/she thinks might detract from its potential for sale.

2)    How do you arrive at the listing price?

I always recommend a homeowner doing their due diligence when it comes to the price of their home. Many agents tend to over promise on the listing price in hopes that it will result in getting the listing.  A home that is priced too high will languish, eventually turning off potential buyers; but a home priced too low might leave money on the table. Make sure your agent is knowledgeable about the market and what other similar homes have recently sold for to help you arrive at the right price.

3)    Can you provide references?

Past performance and years of experience are all valuable indicators of an agent’s competence. But you’ll also want to talk with someone who has used their services before to know what it’s really like to work with them. Perhaps you’re interviewing an agent in the first place because they were recommended by a trusted friend or family member, but you’ll still want to get a variety of opinions from different sources. It’s unlikely that a listing agent will send you to a client who didn’t have a good experience, which is where a little internet sleuthing can come in handy. When reading through online reviews, however, always keep the source in mind. If you stumble on anything negative three or four pages deep in the search results, it’s always a good idea to give the agent a chance to explain if he or she seems otherwise well-suited to your needs. This can be a great way to see how he or she handles criticism before getting past the point of no return.

4)    What questions do you have for me?

Although you are paying them to perform a service for you, your relationship with your agent should be a true partnership that goes both ways. Look for an agent who has a genuine interest in understanding your plans and goals, and who will take all of your requests and requirements seriously.

5)    Can You Explain the Home Selling Process from Start to Finish?

Most homeowners may only experience selling a home once in a lifetime. The process can seem long and complicated. Feel comfortable understanding the key points along the way—preparing the home, showings, how to manage offers, home inspections, what happens post-accepting an offer, timelines, etc. A realtor should make you comfortable along the way, though always expect the unexpected.