July, 2008 Real Estate Newsletterby Gay Rosen, ABR, CBR, GRI, SRES Licensed Real Estate Associate Broker
We have all heard the worrisome and sometimes disturbing news of late on both the radio and television with regard to buying and selling real estate, but it is very important to remember that all real estate is local, and New York still remains a desirable area in which to both buy and sell a home. Unfortunately, the media has tried to paint all housing markets with the same brush and consumers are bombarded by negative housing market stories. Much of the national media focus has been on troubled markets in other parts of the country, which consumers naturally assume is an accurate accounting of the conditions in their own markets. New York’s economy and housing market are not comparable to California, Florida or Michigan, which dominate the headlines. We do not rely on a single industry to drive our economy such as Michigan and our prices did not rise astronomically during the boom as they did in California and Florida.
It is useful to look at the market in a historical perspective and to remember that the housing market has always been cyclical. This most recent boom market began to pick up momentum in 1998, and with the exception of a small dip in 2001, posted annual sales growth through 2005. This slowing in the market is part of the normal cycle – similar cycles have taken place throughout our history, often tied to outside factors such as economic changes just like today. For example, when American soldiers returned from World War 11, the market boomed, but when mortgages were difficult to obtain in the early 1980’s, the market slowed.
In New York State, unprecedented sales and price growth levels between 2004 and 2006 set the bar at a height the market could not sustain. Current data suggest that 2008 may be very similar in sales activity to the 2000-2001 markets, which at the time were considered “up” markets. During that time, sales prices were inflated by low inventory and high demand.
We are currently working through a price correction, but sellers who have held the property for several years will still have the benefit of price appreciation. Despite what the media would have you believe, the majority of today’s sellers have not lost their nest egg. According to the 2007 Profile of Home Buyers and Sellers New York Report, commissioned by NYSAR (New York State Association of Realtors), the average homeowner has been in their house for seven years. The March 2001 statewide median sales price was $114,000; it was $210,000 in March 2008. I would say that is a very good appreciation, and this is the message I would like to convey to you.
2008 is a good time in which to buy a home, and this shift in the market also brings opportunity. Mortgage rates are low and prices are right. There are an abundance of options in today’s marketplace. With the expert help of a Realtor – such as myself – and with educated decisions about purchase price and financing, buyers can become homeowners who can enjoy their dream home – such as yours – for years to come! Should you be selling your home, then hopefully you are purchasing another home elsewhere, and you will reap the rewards of a fairly priced home also.
Education is the key. At the recent Annual Christie’s Great Estates Sales Meeting in New York City, a panel of experts spoke on real estate, and the consensus was that the current market trend or correction will continue for the next year or so, and then slowly start to rebuild itself, but all in all, still a good time in which buy and sell. Real estate is constant, and unlike the stock market, properties usually appreciate in the long term. We just have to all be patient, and accept the prices for what they are, and realize that unless a property was purchased at the height of the market in 2004 with the teaser ARM mortgages, sellers are still realizing a profit.
If you have any questions about real estate, please feel free to contact me.
Gay E. Rosen