Long Island NY Real Estate News – September 2014

Long Island NY Real Estate News - Septermber 2014

In our Long Island NY Real Estate News for September 2014:

Long Island NY Home Sales Outlook Stronger

Economists are more optimistic about the outlook for Long Island NY home sales over the next two years due to stronger job creation.

The annual pace of existing home sales nationwide will likely rise to 5.25 million units in the first three months of 2015 from 5.09 million in the current quarter, according to the Reuter's poll median forecast.

In May, economists expected much slower gains, with 5.1 million resales expected in the first quarter of next year.

Long Island NY home sales outlook is looking stronger due to stronger job creation

Americans signed more contracts in July to buy previously-owned homes than in any month in almost a year, suggesting the housing market was pulling out of its slump more quickly than expected.

The National Association of Realtors (NAR) said last week that its Pending Home Sales Index, based on contracts signed last month, rose 3.3 percent to 105.9, the highest level since August 2013.

Low mortgage rates and improving labor market dynamics should remain conducive to gradual growth in the Long Island NY home sales sector.

A sharp increase in mortgage rates pushed sales of existing homes lower in the second half of 2013 but borrowing costs have been more stable in recent months and Long Island NY home sales have recovered some of the lost ground.

Investors and economists polled by Reuters generally expect the Federal Reserve will begin to slowly increase its benchmark interest rate around the middle of next year after holding it near zero since 2008.

The median forecast put the 30-year mortgage rate at 5.25 percent in 2016, down from 5.68 percent in the May poll. Last week, the 30-year rate averaged 4.28 percent, according to the Mortgage Bankers Association.

Economists don't believe a slow rise in mortgage rates will hurt Long Island NY home sales, as slow increases in rates are generally considered a symptom of an improving economy. At the same time, slowly rising rates may also help to bring home price appreciation back down to more sustainable levels.

Speaking of mortgage rates and how they may affect Long Island NY home sales…

 

Long Island NY Mortgage Rates Remain Low

Long Island NY mortgage rates remain much lower than anyone expected they would be by this time when the Fed announced it would start cutting back on its purchases of mortgage bonds.

Mortgage News Daily reports that average 30-year fixed mortgage rates are down to around 4.11 percent. One year ago those same rates were 4.61 percent, down about 50 basis points year-over-year.

Mortgage refinancing tends to pick up anytime mortgage rates drop by 50 bps from recent levels, however most homeowners who were looking to refinance did so when rates were below 4 percent in 2012 and 2013.

We would not be surprised to see rates drift even lower in the coming few days or weeks as they pull lower due to global events, European debt, etc. These are the largest rate indicators right now that are affecting Long Island NY mortgage rates.

Long Island NY mortgage rates were well above 6 percent during the housing market's 2006-2007 peak. Freddie Mac data going back more than four decades shows 30-year rates hit an all-time low of just 3.31 percent in November 2012.

Trying to decide whether to lock in current Long Island NY mortgage rates or let them float a while longer? Seems odd to say floating is an option when we're near the best pricing of the year, but it might be a consideration for aggressive borrowers. If you're close to closing, or have tight debt ratios/cash to close, lock 'em up, and don't look back!

 

Ideal Time to Buy a Long Island NY Home?

If you've been waiting to buy a Long Island NY home when the time was just right, that time may be now.

Potential homebuyers who have been willing to wait for better deals are starting to be rewarded for their patience, as sellers drop listing prices to meet buyers' more value-focused expectations.

Redfin Chief Economist Nela Richardson says, "Two market developments in July are spurring this change in housing activity as the market transitions from the summer to the fall buying season.”

1 – Long Island NY Home Price Slowdown

Home price growth was mostly flat in July for the first time in five months.

As Senior Financial Reporter Trey Garrison said last week, home price growth has slowed across the board, and Capital Economics says the slowdown will likely meet the company's forecast for inflation to slow to 4% in 2015.

Just about everyone was a little surprised by the consecutive month-on-month declines in house prices during April, May and June on the new monthly Case-Shiller national measure. Echoing that message, the Case-Shiller 20-City measure of house prices fell during the latest two months.

2 – End of Seller's Market?

The second market development is a shift in pricing power from sellers to a more balanced market. That shift has been nearly nine months in the making from when sales began to first decline last November.  

Back in October, sellers were starting to lose their dominance in the market, with 72% of surveyed agents describing now as a good time to sell compared to 86% in the second quarter of 2013.

Look for these two trends to drive an unusual surge in home sales this fall. We also look for prices to continue to flatten, and to potentially decline month over month in September or October. If that happens, it will be the first three-month price decline since the fall 2012. Stay plugged in right here and we'll keep you posted on trends as we move through the fall Long Island NY home buying season and into the holidays.

All-Cash Long Island Home Sales Up

While overall Long Island home saAll-cash Long Island home sales have increased this yearles have slowed, the number of all-cash Long Island home sales has increased, according to numbers from the Multiple Listing Service of Long Island.

Of the 4,102 closed Long Island home sales recorded in the first quarter of this year, 969, or 23.6 percent, were purchased with all cash and no mortgage. In the first quarter of 2013, 856, or 21.6 percent, of the 3,964 homes sold were bought entirely with cash.

Suffolk had the highest percentage of all-cash Long Island home sales in the first quarter of 2014 with 567 — 26 percent — of the 2,164 sales that closed.

That’s still way below the percentage of all-cash home sales nationally, according to data from RealtyTrac. All-cash home sales throughout the United States reached a new high in this year’s first quarter, with 42.7 percent of all homes purchased being sold for cash, up drastically from the 19.1 percent in the first quarter of 2013.

Long Island Home Sales Yet Not Affected by Rising Mortgage Rates

With so many all-cash Long Island home sales, you’d think sales would not be affected by rising interest rates as much as other areas that don’t see as many all-cash buyers. Time will tell if this has any effect on Long Island home sales, as average U.S. rates on fixed mortgages rose slightly last week, reversing a five-week downward trend.

Mortgage buyer Freddie Mac said last week that the average rate for a 30-year loan edged up to 4.14 percent from 4.12 percent last week. The average for the 15-year mortgage climbed to 3.23 percent from 3.21 percent.

Long Island home sales began to recover in 2012, but higher mortgage rates, tight credit and a limited supply of available homes slowed momentum recently. Mortgage rates are about a quarter of a percentage point higher than they were at the same time last year.

For continuous updates on Long Island home sales numbers, as well as trends that affect Long Island home sales, check back often with Best Buyer’s Broker Realty here and by following Best Buyer’s Broker Realty on Facebook! 

Follow Ira Freireich on Twitter for daily posts and updates as well.

Fed Seems OK With Declining Long Island NY Home Sales

Declining Long Island NY home sales is actually one negative the Fed seems willing to live withDeclining Long Island NY home sales doesn't seem to be worrying the Federal Reserve any these days. Fed Chair Janet Yellen indicated recently, the government is keen to continue its support of the economy via purchases of Treasurys and mortgage-backed securities. However, the amount of which it invests is being gradually phased out.

After the recent Federal Open Market Committee meeting, Yellen said that the Fed could start raising short-term rates "about six months" after it completed its ongoing tapering of Treasury and bond purchases, which most expect to be completed by the fourth quarter of 2014.

Long Island NY Home Sales Dependent on Jobs

With Long Island NY home sales largely dependent on good employment numbers, and with Yellen seemingly changing her tune on where the economy is as far as employment numbers are concerned, she gave four reasons why she thinks the employment numbers are still soft.

1 – The large number of part timers working who would prefer full time jobs, but just can't find them.

2 – Stagnant wages where compensation has increased an average of only a little more than 2% per year since the recession.

3 – The large number of long-term unemployed who have been out of work for six months or more.

4 – The historic low rate of labor market participation–the proportion of working-age adults that hold or are seeking jobs. This number now stands aat 63%, about the same as it was in 1978.

New home sales of single-family houses in February dropped 3.3% to 440,000, reaching a 5-month low, according to the latest report from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.

The Fed often cites improving economic benchmarks, such as the nation adding more jobs, as necessary to justify the reduction of monetary support.

With spring comes new homebuyers into the market, and declining Long Island NY home sales should turn around. But Yellen's comments about the nation needing to add more jobs as necessary to reduce the monetary support, seems to suggest that declining Long Island NY home sales is actually one negative the Fed is willing to live with and is likely to continue on its path of pulling support for secondary markets.

We'll keep you posted on any further news coming from the Fed that may, or may not, affect not only Long Island NY home sales numbers, but the nation as a whole.

Get further news as it affects Long Island NY home sales by clicking the Long Island NY Real Estate News link to your right under Long Island NY Real Estate Categories.

Long Island NY Home Sales Poised to Surge

Long Island NY home sales may be looking at a big surge this spring with a lot of frustrated buyers looking for homes and sellers starting to put their homes on the market.Long Island NY home sales are beginning to look like the start of a perfect storm for real estate. A combination of frustrated buyers from a lack of inventory, and sellers starting to put their homes on the market may mean the spring selling season could poised for a surge… one for the record books.

Typically, the spring selling season (March through June) is when more than half of all homes in the U.S. are sold. The market is getting a later start than usual this spring due to the bad weather all over the country.

Long Island NY home sales declined in February to the lowest level since mid-2012, with the number of contracts signed with the intention of buying falling to the lowest level since 2011.

Applications for mortgages to purchase homes dropped in February to the lowest since 1995, according to an index from the Mortgage Bankers Association that is seasonally adjusted. By mid-March, the gauge regained about 12 percent from that low, while remaining about 17 percent below the level it was during the same week in 2013.

Nationwide, U.S. home prices rose 12.2 percent in February compared to February 2013, up slightly from January's year-over-year pace of 12 percent. The number of available homes remains below the level typical of a healthy market.

Long Island NY Home Sales May See Exaggerated Bounce

Fannie Mae and the Mortgage Bankers Association are predicting 2014 Long Island NY home sales to see a bit of an exaggerated seasonal bounce due to so many eager buyers wanting to purchase homes.

Lenders expect Long Island NY home sales to pick up because so many potential home buyers want to lock in a mortgage ahead of any possible uptick in mortgage rates.

Borrowing costs have risen as the Federal Reserve continues tapering stimulus efforts that have kept interest rates low. Policy makers cut monthly bond purchases to $55 billion this month, from $85 billion last year. Fed Chair Janet Yellen said the program could end this fall and that the benchmark interest rate, which has been close to zero since 2008, may rise six months after that.

Nationally, the supply of homes for sale is bigger than last year, according to the National Association of Realtors. At the current sales pace, it would take 5.2 months to sell the properties on the market in February, compared with 4.6 months a year earlier.

Long Island NY home sales are expected to pick up momentum as we head into the second half of April and into May and June. Watch for the housing market, like the rest of the economy, come to live in the next couple of months.

For more on Long Island NY home sales, including other news relating to Long Island NY real estate, visit our Long Island NY Real Estate News section of articles under our Long Island NY Real Estate Categories to the right.

December 2013 Long Island Home Sales Up

The recent momentum in the Long Island housing market continued when there were more Long Island home sales and fewer homes listed for sale in December.

Long Island home sales continued to out-pace the nation in DecemberThere were 1,537 homes contracted for sale in Nassau and Suffolk counties in December, about 16.4 percent more than the 1,322 homes that were sold on the Island in December 2012, according to numbers from an online real estate database.

Housing inventory remains lower here than it’s been in several years.

There are currently about 13,850 homes listed for sale with the Multiple Listing Service of Long Island, about 8.4 percent fewer than there were at the end of December 2012.

Long Island Home Sales Better Than Most of the Country

Meanwhile, U.S. home prices barely rose in November from the previous month and year-over-year gains slowed, reflecting declines in sales in the fall.

The figures aren’t adjusted for seasonal patterns, such as cold winter weather that typically slows sales. Home prices have risen a healthy 11.8 percent from a year ago, but that’s the smallest yearly gain since March.

Rising home prices and higher mortgage rates nationwide held back sales at the end of last year. Existing home sales fell from September through November, but continued on a torrid pace for Long Island home sales.

Most economists expect sales and prices to keep rising this year, but at a slower pace. They forecast sales and prices will likely rise around 5 percent, down from double-digit gains in 2013. How Long Island home sales will fare compared to the rest of the country is anyone’s guess, as so many things can dramatically change a market almost overnight. Things like devastating storms, or other disasters, can turn the red hot numbers to ash very quickly. But for now, Long Island home sales continue to enjoy a strong comeback.

Check out our other articles and tips pertaining to Long Island home sales and the Long Island real estate market in general by clicking on the Long Island NY Real Estate News link to your right under Long Island NY Real Estate Categories. You can also get daily tips and news by following us on Twitter, and Liking us on Facebook!