Can Starbucks Affect Long Island NY Home Values?

Sounds like a ridiculous question, but can living near a Starbucks actually affect Long Island NY home values? According to a new book, "Zillow Talk: The New Rules of Real Estate" by Zillow CEO Spencer Rascoff and Chief Economist Stan Humphries, it just might.

The pair write that Starbucks is actually the fuel for gentrification. "Starbucks equates with Venti-sized home-value appreciation," Humphries and Rascoff write. Moreover, Starbucks seems to be fueling — not following — these higher Long Island NY home values.

Long Island NY home values tend to be higher within a quarter mile of Starbucks versus those homes further away from Starbucks

Long Island NY Home Values Higher Near Starbucks

To make the argument that Starbucks is actually causing this growth, rather than just piggybacking on it, the executives looked at homes within a quarter-mile of a Starbucks compared to those between a quarter-mile and half-mile away. The increase in the value of houses within a quarter-mile radius of a Starbucks outpaced those of Long Island NY home values slightly further away during the five years after the coffee shop arrived in the neighborhood.

In a 17-year span, homes near Starbucks appreciated 96 percent, compared to the average home which appreciated 65 percent. So, assuming Starbucks truly does drive gentrification, how does Starbucks choose where to put its next location and send Long Island NY home values skyrocketing?

The team looks at traffic patterns, businesses and maps for every potential location. But it also leaves a lot of the decision up to "art," and regional teams who know the local areas well.

Turns out, Starbucks' data also has a pulse on the national consumer's mood on the economy, not just on setting the future for Long Island NY home values. CEO Howard Schultz told Time Magazine that Starbucks sales fluctuate with the national mood and tank during moments of political unrest.

What does all this mean? Do you need to add "near Starbucks" to your list of things to look for when shopping for your next home?  Perhaps. But we'd say, "don't make it mandatory."

Remember, we post daily tips and news that may affect Long Island NY home values over on Twitter, and also on our Facebook Page. We'd love you to check us out there too.

How Long Before Long Island NY Home Values Fully Recover?

The question most people want to know is how long will it take for Long Island NY home values to be back to where they were before the bottom dropped out? The housing recovery began approximately 3 years ago, but many markets have still to regain values lost during the recession.

How long before Long Island NY home values recover from the recession?
Presently, Long Island NY home values are around 11.3% below their peak values seen in 2007. Long Island NY home values are expected to increase by a further 4.2% through to the second quarter of next year. These figures are from the Zillow Home Value Forecast, and it's expected it will take 2.7 years for Long Island NY home values to reach their pre-recession levels, assuming that prices continue to appreciate at the levels predicted.

This would mean Long Island NY home values wouldn't return to their previous peak values until the first quarter of 2017, nearly a decade since the housing recession first began, and it's thought full recovery in the real estate market could take even longer. This is because the rate of home value appreciation is expected slowdown in the next few months and years.

While the news on Long Island NY home values don't appear to be all that great for sellers, the lower Long Island NY home values are making it somewhat easier for buyers to find bargains, and home affordability should remain good over the next couple of years.

Long Island NY Home Values Increasing, But Inventory Shortages Still Exist

While the number of Long Island NY homes for sale is showing signs of inching up, inventories still remain constrained. Could "pocket listings" — for-sale properties that aren't marketed widely or posted on the MLS — be the real culprit?

The sentiment in the marketplace is that we still have a shortage of inventory, and some believe it is due to the prevalence of pocket listings. Instead of marketing these for-sale properties on the MLS, brokers circulate the listings among their own buyer clients or within their own brokerage. No data exists on the number of pocket listings, but real estate professionals have been reporting a rise in this practice in recent months.

When there is limited inventory, agents convince sellers, because there is so much demand for housing, that maybe as many eyeballs don't need to see their home as in a traditional market. We believe this practice hurts the market, and actually slows down the return to normal Long Island NY home values.

Don’t Trust Long Island NY Home Values to Zillow

If you're one of the millions of people who constantly log on to Zillow.com to look up the "Zestimate" (Long Island NY home values according to Zillow) on your home, you may want to think twice before depending on that "Zestimate" to be anywhere even close to accurate.

Long Island NY Home Values Found to Be Inconsistent

Long Island NY home values have been found to be inconsistent on ZillowThose predicted Long Island NY home values estimates have been found to be wildly inaccurate and inconsistent.

In one recent comparison of existing home sales on Zillow, the "Zestimates" of 500 existing home sales that closed in a one week given time period in March found that the online values were within 5 percent of the actual sale price just half of the time.

The 50 percent accuracy rate within 5 percent of the sales price was right in line with Zillow's own research which is disclosed at their website:

The Zestimate's accuracy depends on location and availability of data in an area. Some counties have deeply detailed information on homes such as number of bedrooms, bathrooms and square footage and others do not. The more data available, the more accurate the Zestimate.

Nationally, the Zestimate has a median error rate of 6.9% percent, which means half of the Zestimates in an area are closer than the error percentage and half are farther off.

In some areas, Zillow admits they might not be able to produce a Zestimate at all, but they do have some basic information on the homes.

"It all comes down to the quality of the available data," Zillow spokesman Cory Hopkins said. Some areas just have better public and real estate listing and sale information than others that can be blended into the super-secret algorithm, which he added "is constantly tinkered with." He said the company "readily admits" it can't match a local real estate professional on the streets of a particular market.

If you want to know more accurately what Long Island NY home values are, you're better off calling a local professional rather than depending on numbers that may be, and likely are, way off in accuracy.

What Rising Long Island NY Home Values Mean for You

Long Island NY home values have been on the rise for the past couple of years following one of the worst economic crashes in modern day history. But what does this mean for you as a Long Island NY homeowner?

Long Island NY home values are up, and there are pros and cons involved.The most obvious advantage of rising Long Island NY home values is, you may be in a better position to sell, if that's what you've been waiting for. If you're on the fence or have been waiting to put your home on the market, its value can be a strong influential factor in your decision. But what if you want to stay put?

Rising Long Island NY Home Values May Mean More Cash Now

Maybe a cash out refinance is a good option for you since we've seen such rising Long Island NY home values over the past couple of years.

If your Long Island NY home value has gone up, you may be able to turn some of that equity into cash. A cash-out refinance allows you to refinance into a new mortgage for more than what you currently owe. The benefit? You can use the difference for pretty much anything.

This may be a good option if you're in immediate need of some extra money, if you want to pay off high-interest credit card debt or if you're just looking to make some home improvements to increase the value of your home. The possibilities are endless!

Rising Long Island NY Home Values Could Eliminate PMI

If you pay private mortgage insurance (PMI) for your conventional loan, or a mortgage insurance premium (MIP) for your FHA loan, an increase in your home's value might mean extra savings. If your home's value has gone up, your loan-to-value (LTV) ratio may have changed, so you might be able to cancel your PMI.

You may be able to request cancellation of your PMI once the unpaid balance of your loan has reached 80%, as long as you meet the following criteria:

  • You must have a good payment history;
  • The value of your home must not have declined below its original value; and
  • There are no other liens on the property, such as a second mortgage.

If your PMI is not canceled at 80%, your servicer must automatically terminate it when your LTV ratio reaches 78% based on your initial amortization. This does not apply to investment properties or lender-paid mortgage insurance (LPMI), however.

Rising Long Island NY Home Values Could Mean Higher Taxes

As Long Island NY home values rise and fall, property taxes usually follow suit. If your mortgage lender manages your taxes and insurance for you through an escrow account, your monthly mortgage payment could increase if you need more money in your account to cover your increased property taxes.

If you know there's a good chance your property taxes will increase, you can make additional payments toward your escrow account at any time during the year to alleviate the potential escrow shortage.

Those are just a few of the pro's and con's of rising Long Island NY home values. Obviously, if you're a potential home buyer, there are even more con's to rising Long Island NY home values.

Questions or concerns about rising Long Island NY home values? Let us know in the comments box below. We'd love to hear from you.

Rise in Long Island NY Home Values Expected Through 2018

Long Island NY home values are expected to continue increasing for the next four years. The majority of more than 100 forecasters says they expect large-scale investors to sell off the bulk of homes in their portfolios during that time frame, boosting inventory and potentially contributing to a smoother market ahead. According to panelists in the latest Zillow® Home Price Expectations Survey, a nationwide home value appreciation of 4.5 percent is expected this year, with a steady slowdown in appreciation rates each year through 2018.

Long Island NY home values are expected to continue rising, though somewhat slower, through 2018.Throughout the recovery, large-scale investors have purchased thousands of homes nationwide, particularly lower-priced vacant and foreclosed homes, fixing them up and keeping them in their portfolios as rental properties. This investor activity helped put a floor under sales volumes during the depth of the housing recession, but also created competition for many would-be buyers and contributed to rapid Long Island NY home values in some areas.

Panelists were asked to assess the impact on Long Island NY home values if these institutional investors were to curtail their activity this year. Among those expressing an opinion, 79 percent says the impact would be significant or somewhat significant. Panelists were also asked when they thought these investors will have sold the majority of homes in their portfolios. Among those with an opinion, 57 percent says they expected this to occur in the next three to five years.

There is a growing sentiment that a decline in investor activity now isn’t necessarily a bad thing for Long Island NY home values, and could also have real benefits for buyers. Buyers entering the market in the next few months will not be competing with cash-rich investors like they were last year which should be some small solace given the higher prices and mortgage rates they will be facing. The gradual decline of investor activity should be viewed as another sign of the market slowly returning to normal.

Panelists were also asked when the Federal Reserve should end its ongoing stimulus efforts, known as “quantitative easing.” Since September 2012, the Fed has been purchasing tens of billions of dollars worth of Treasury bonds and mortgage securities each month, which has helped keep mortgage interest rates low and stimulate demand. The program is now being wound down. More than 70 percent of the experts want to see the monetary stimulus reduced to zero before the end of this year, and the current pace of tapering will get us there.

Long Island NY Home Values Expected to Normalize through 2018

On average, panelists says they expect Long Island NY home values to appreciate at around 4.5 percent through the end of this year, a pace that exceeds historically normal annual appreciation rates of around 3 percent. This appreciation is expected to slow to roughly 3.8 percent in 2015 and 3.3 percent by 2018, rates much more in line with historic norms.

The most optimistic group of panelists predicted a 5.6 percent annual increase in Long Island NY home values this year, on average, while the most pessimistic group predicted an average increase of 3.4 percent. The most optimistic panelists predicted Long Island NY home values would rise roughly 10.6 percent above their 2007 peaks by the end of 2018, on average, while the most pessimistic says they expected Long Island NY home values to remain about 4.5 percent below 2007 peaks.

We’ll keep you informed on Long Island NY home values, housing and how the economy is affecting our market right here at our website. Stay tuned! We update this site almost on a daily basis, and also update our Twitter feed daily. We’d also love it if you’d like us on Facebook.