Westchester County saw a second round of increased residential real estate sales during the third quarter, July 1 to Sept. 30, of this year, according to Hudson Gateway Multiple Listing Service.
While sales volumes increased for two consecutive quarters, selling prices have not.
Realtor firms participating in the Westchester-Putnam Division of the Hudson Gateway Multiple Listing Service reported 2,243 closed residential transactions in Westchester, a 15 percent increase over the same period last year.
In Putnam County, the increase was 29 percent.
During the second quarter, the year-over-year increases were 13 percent and 24 percent respectively. For Westchester, the third quarter volume was the highest since 2007, and for Putnam, since 2008.
Taking into account the comparatively lackluster market performance of the first three months of 2012, the year-to-date sales rate in Westchester thus far is 10.6 percent above that of 2011, according to Hudson Gateway Multiple Listing Service. If the current sales rate continues, Westchester will close the year with approximately 7,000 sales in all residential categories – single family houses, condominiums, cooperatives, and 2-4 family houses - resetting sales volume convincingly above the 6,639 unit level when our local market entered into real estate recession in 2008. Putnam County will follow a similar pattern.
The increased sales volumes have not boosted selling prices.
The third quarter median sale price of a single family house in Westchester was $630,000 or nearly 8 percent less than last year’s third quarter median. The decrease in Putnam was 25 percent — although Hudson Gateway Multiple Listing Service notes the Putnam data is subject to large percentage swing because the overall base count is low.
The lower average price in the region is mostly due to sellers’ price concessions in response to general economic conditions but also partly to a downshift in the proportion of high end ($1 million-plus) properties that were sold. In Westchester, such properties accounted for 22 percent of all house sales in the third quarter; in 2011 that ratio was 26 percent, and in 2010 it was 28 percent.
The only sector to enjoy price gains was Westchester condominiums, up by 4 percent to a median of $349,750. The cooperative apartment median fell by 7 percent, to $155,000.
The end-of-quarter inventory of properties listed for sale through HGMLS decreased by 10% in Westchester, to 6,398 units, and by 11 percent in Putnam, to 945 units. The strong sales volumes of the past two quarters have braked the growth of inventory, but it is also true that inventory remains low on account of the continuing reluctance of potential sellers to test the waters.
Consumer confidence in the general economy just isn’t strong enough yet to propel the real estate market to its pre-recession vigor, even with the attractive forces of historically low prices (for this region) as well as mortgage interest rates that are as low as 3.5 percent or less for conventional 30-year loans, according to Hudson Gateway Multiple Listing Service. However, the beneficial effect of low rates is being offset in part by the increasingly demanding criteria by lenders with respect to the credit worthiness of borrowers.
The closings posted with Hudson Gateway Multiple Listing Service in the third quarter largely reflected real estate sales and marketing activity that took place during the late spring and summer months of 2012. Other than low mortgage interest rates in that period there was not much supportive energy from other components of the economy that affect consumer confidence.
For example, the local unemployment rate has remained stuck in the high (for here) range of 7.5-7.6 percent range; and most consumers probably believe it is more than 8 percent due to the focus on that persistent national rate in the presidential election campaigns. The equity markets, which many consumers regard as an index of economic well-being, performed well over the course of this year, but with a pattern of volatility along the way that would intimidate all but sophisticated investors.
Still, posting two consecutive quarters of increased real estate sales in the region is encouraging because it occurred in the face of lackluster or even adverse economic circumstances, according to Hudson Gateway Multiple Listing Service.
"We are probably close to the point where buyers and sellers see eye to eye on the bottom line for prices, and where an increasingly active market generates its own energy for renewed health," the organization's latest report states.
Westchester and Putnam see gains in home sales.
By Willam Demarest
2012 NEW YORK TAX APPEAL APPRAISAL SERVICES
PROVIDING 2012 NEW YORK TAX APPEAL APPRAISAL SERVICES IN
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New York Real Estate Tax and Assessment appeal APPRAISAL services provided by Christopher Greco Appraisal Services, Inc for the entire NEW YORK Metro Area. We provide expert experience in New Rochelle, Westchester County, Rockland, Putnam, Nassau, Bronx and beyond. Christopher Greco Appraisal Services provides superior appraisals completed by a New York State Certified and Insured Appraiser.
If you own property in New York State, you are eligible for formal review of your assessment.
There are two levels of formal review:
1. Administrative review - the "grievance" process is conducted at the municipal level
2. Judicial review
· In order to pursue judicial review you must first go through administrative review
· includes two options:
o Small Claims Assessment Review (SCAR) - a low-cost option available to most homeowners;
o Tax certiorari proceedings in State Supreme Court - to pursue this option, you should contact an attorney.
Before pursuing formal review of your assessment, you should first determine if you are assessed fairly:
Step One: What is the assessor's estimate of the market value of your property?
You'll find this information on the assessment roll.
You should check your assessment annually prior to Grievance Day (typically the fourth Tuesday in May, but confirm the date with your assessor).
If your municipality is assessing at 100% of market value, your assessment and the assessor's estimate of market value will be identical.
If assessments are not at 100% of market value, you can use this formula to calculate the assessor's estimate of market value:
Step Two: Develop an estimate of the market value of your property
Generally, if the assessor's estimate of the market value of your property reflects roughly the amount for which you could sell your property, then your assessment is fair.
Step Three: If your assessment is too high Often, an informal discussion between a taxpayer and an assessor can result in a sharing of information beneficial to both parties. If such a discussion does not result in a reduction in your assessment, and you still feel as though your assessment is too high, you may wish to contest your assessment. Rather than determining that your assessment is too high, you might find that your property is assessed based on its market value, but the rest of the community is assessed at a lower level of assessment. Again, you should discuss this with your assessor. For example,
If you are assessed fairly, but you feel that your taxes are too high
Assessors do not determine your property taxes. If you feel as though your assessment accurately reflects the market value of your property, but you still feel that your property taxes are too high, you may wish to address this matter with the taxing jurisdictions that impose taxes in your community - school board, county legislature, city council, town board, fire district and other special districts.
The assessor cannot assist you with tax matters, but only with matters pertaining to the assessed value of your property.
There is no better time in recent history to grieve your taxes and we are here to help. Christopher Greco Appraisal Services has provided New York tax appeal appraisal services throughout Westchester County since 2000. No matter which county your property is located in from Westchester County to Dutchess County you can be sure there was a real estate market correction. Bronx, Brooklyn, Queens, Staten Island, Rockland County, Putnam County, Orange County, Nassau County, Suffolk County and YES EVEN New York Manhattan experienced some degree of a market correction. Some markets have shown signs of stabilization, while other continue to decline. If you believe that your property value is less than your total tax value and assessment then you likely have a case to fight and grieve your New York property taxes!
It is extremely important that you know the dates from your local assessor's office for New York tax filing and grievance deadlines! Compliance with these deadlines is critical to your New York / County Tax Grievance success. If you miss the deadline you are likely out of luck! That’s where we come in...as a courtesy to anyone visiting this page we have provided all the dates you need to know below. Check the dates and then contact your town hall to confirm the date.
Westchester County Grievance Days
The following are the latest published residential ratios published by New York State for Westchester County:
To determine what your municipality thinks your property is worth, divide your assessment by the Residential Assessment Ratio provided from the tables below.
TOWN/ VILLAGE MUNICIPALITY ASSESSMENT RATIO YEAR City Mt Vernon 2.61 2011 City New Rochelle 2.62 2011 City Peekskill 3.36 2011 City Rye 1.92 2011 City White Plains 2.66 2012 City Yonkers 2.53 2011 Town Bedford 9.28 2011 Town Cortlandt 1.75 2011 Village Buchanan 1.27 2012 Village Croton-on-Hudson 3.69 2012 Town Eastchester 1.28 2011 Village Bronxville 114.17 2012 Village Tuckahoe 1.37 2012 Town Greenburgh 2.85 2011 Village Ardsley 2.89 2011 Village Dobbs Ferry 2.84 2012 Village Elmsford 2.98 2012 Village Hastings-on-Hudson 2.72 2012 Village Irvington 2.83 2012 Village Tarrytown 2.36 2012 Town Harrison 1.74 2011 Town Lewisboro 9.63 2011 Town Mamaroneck 1.70 2011 Village Larchmont 1.71 2012 Village Mamaroneck 1.80 2012 Town Mount Pleasant 1.42 2011 Village Sleepy Hollow 23.70 2012 Village Pleasantville 7.94 2012 Town New Castle 19.03 2011 Town North Castle 2.12 2011 Town North Salem 9.98 2011 Town Ossining 5.19 2011 Town Pelham 100.00 2011 Town Pound Ridge 16.45 2011 Town Rye 100.00 2011 Town Scarsdale 1.76 2011 Town Somers 12.04 2011 Town Yorktown 2.41 2011 Town Mount Kisco 14.87 2011 Village Mount Kisco 6.71 2012
Source: New York State Office of Real Property Services
New York State Law
New York State Law requires all properties in each municipality to be assessed at a uniform percentage of market value each year. This means that all properties in each City, Town and Village must be assessed at market value or all at the same uniform percentage of market value each year.
Once the market value of each property is determined, the assessor applies the municipal-wide level of assessment to the market values.
In communities where assessments are maintained at a level of assessment of 100%, a property's assessment is the assessor's estimate of its market value. If a community is assessing at a percentage of market value, each assessment should be based on the percentage being used throughout the community.
If the market value of a property is $100,000 and the community is assessing at 30% of market value, the assessment on that property would be $30,000.
DEFINITIONS
The ownership and physical condition of real property as of this date are assessed (valued) according to price fixed as of the valuation date. All applications for property exemptions must be filed with assessor by this date.
The assessor completes, certifies and files a roll containing proposed assessed values for each property in the assessing unit. Grievance Day: Board of Assessment Review meets to hear assessment complaints. Last day property owners may file a formal complaint seeking reduction in their tentative assessments. Please note that we can not represent you at the hearing as appraisers are non-interested third parties. We can however, provide you with an independent opinion of value and assist you with your application. MORE ABOUT NEW YORK STATE TAX GRIEVANCE AND ASSESSMENT APPEAL SERVICES Most localities determine your property tax burden based on an ad valorem assessment of the property's value. Sometimes, as a property owner, you get an unwanted surprise in the mail telling you your taxes are going up, and sometimes it may seem as though your assessment is too high. Often, matters like this can be resolved with a phone call. However, if after discussing your assessment with your local New York taxing authority you still feel as though your property was overvalued, a professional, independent, third-party appraiser is often your best bet in proving your case. That's where we come in. There are as many different procedures for appealing New York tax and assessments as there are property taxing districts, so it's important to enlist the help of a professional appraisal firm that's experienced and trained in the ins and outs of your particular jurisdiction. Please note: It makes sense to do your own research before determining whether to go forward with a property assessment appeal, especially before you make the decision to hire a professional appraiser. However, according to the Uniform Standards of Professional Appraisal Practice (USPAP), we are not allowed to take "shortcuts" -- i.e., your research -- and use it on its face as part of our independent evaluation. When you hire Greco Appraisal Services for a New York tax assessment appeal, you're commissioning an independent, third-party professional appraisal report. As such Christopher Greco Appraisals will do our own evaluation, beginning to end. If you're right that your property has been overvalued, an independent report is your best eveidence. Our appraisal provide year over median selling price changes from 2007 or 2008 through the effective date of appraial and give a supply and demand analysis. Couple that data along with the best comparable sales data and active listings and you have yourself a great start to lowering your taxes. Although we can not advocate for the homeowner, we are qualified to determine the fair market value or your home. MORE ON NEW YORK TAX APPEALS AND ASSESSMENT REDUCTIONS. Christopher Greco Appraisal Services, Inc. provides Bronx tax appeal and assessment appeal appraisals, Westchester County tax appeal and assessment appeal appraisals, Rockland and Orange County tax appeal and assessment appeal appraisals. Please contact Christopher Greco Appraisal Services, Inc for any of your New York Tax and Assessment appeal appraisal needs. Browse our website to learn more about our qualifications, expertise and services offered. Christopher Greco Appraisal Services Inc provided tax appeal appraisal in the following communities throughout New York WESTCHESTER COUNTY TAX APPEAL REAL ESTATE APPRAISAL SERVICES Amawalk, Ardsley, Ardsley On Hudson, Armonk, Baldwin Place, Bedford, Bedford Hills, Briarcliff Manor, Bronxville, Buchanan, Chappaqua, Cortlandt Manor, Crompond, Cross River, Croton Falls, Croton On Hudson, Dobbs Ferry, Eastchester, Elmsford, Goldens Bridge, Granite Springs, Harrison, Hartsdale, Hastings On Hudson, Hawthorne, Irvington, Jefferson Valley, Katonah, Larchmont, Lincolndale, Mamaroneck, Maryknoll, Millwood, Mohegan Lake, Montrose, Mount Kisco, Mount Vernon, New Rochelle, North Salem, Ossining, Peekskill, Pelham, Pleasantville, Port Chester, Pound Ridge, Purchase, Purdys, Rye, Scarsdale, Shenorock, Shrub Oak, Somers, South Salem, Tarrytown, Thornwood, Tuckahoe, Valhalla, Verplanck, Waccabuc, West Harrison, White Plains, Yonkers, and Yorktown Heights PUTNAM COUNTY NEW YORK REAL ESTATE TAX APPRAISAL SERVICES Brewster, Carmel, Cold Spring, Garrison, Lake Peekskill, Mahopac, Mahopac Falls, Patterson, and Putnam Valley ROCKLAND COUNTY NEW YORK REAL ESTATE TAX APPEAL APPRAISAL SERVICES Bear Mountain, Blauvelt, Congers, Garnerville, Haverstraw, Hillburn, Monsey, Nanuet, New City, Nyack, Orangeburg, Palisades, Pearl River, Piermont, Pomona, Sloatsburg, Sparkill, Spring Valley, Stony Point, Suffern, Tallman, Tappan, Thiells, Tomkins Cove, Valley Cottage, West Haverstraw, and West Nyack We also cover the entire boroughs of The Bronx, Brooklyn/Kings, Staten Island/Richmond, New York/Manhattan and Queens.
The assessor completes, certifies and files a roll containing proposed assessed values for each property in the assessing unit.
Grievance Day:
Board of Assessment Review meets to hear assessment complaints. Last day property owners may file a formal complaint seeking reduction in their tentative assessments.
Please note that we can not represent you at the hearing as appraisers are non-interested third parties. We can however, provide you with an independent opinion of value and assist you with your application.
MORE ABOUT NEW YORK STATE TAX GRIEVANCE AND ASSESSMENT APPEAL SERVICES
Most localities determine your property tax burden based on an ad valorem assessment of the property's value. Sometimes, as a property owner, you get an unwanted surprise in the mail telling you your taxes are going up, and sometimes it may seem as though your assessment is too high.
Often, matters like this can be resolved with a phone call. However, if after discussing your assessment with your local New York taxing authority you still feel as though your property was overvalued, a professional, independent, third-party appraiser is often your best bet in proving your case. That's where we come in.
There are as many different procedures for appealing New York tax and assessments as there are property taxing districts, so it's important to enlist the help of a professional appraisal firm that's experienced and trained in the ins and outs of your particular jurisdiction.
Please note: It makes sense to do your own research before determining whether to go forward with a property assessment appeal, especially before you make the decision to hire a professional appraiser. However, according to the Uniform Standards of Professional Appraisal Practice (USPAP), we are not allowed to take "shortcuts" -- i.e., your research -- and use it on its face as part of our independent evaluation. When you hire Greco Appraisal Services for a New York tax assessment appeal, you're commissioning an independent, third-party professional appraisal report. As such Christopher Greco Appraisals will do our own evaluation, beginning to end. If you're right that your property has been overvalued, an independent report is your best eveidence. Our appraisal provide year over median selling price changes from 2007 or 2008 through the effective date of appraial and give a supply and demand analysis. Couple that data along with the best comparable sales data and active listings and you have yourself a great start to lowering your taxes. Although we can not advocate for the homeowner, we are qualified to determine the fair market value or your home.
MORE ON NEW YORK TAX APPEALS AND ASSESSMENT REDUCTIONS.
Christopher Greco Appraisal Services, Inc. provides Bronx tax appeal and assessment appeal appraisals, Westchester County tax appeal and assessment appeal appraisals, Rockland and Orange County tax appeal and assessment appeal appraisals.
Please contact Christopher Greco Appraisal Services, Inc for any of your New York Tax and Assessment appeal appraisal needs.
Browse our website to learn more about our qualifications, expertise and services offered.
Christopher Greco Appraisal Services Inc provided tax appeal appraisal in the following communities throughout New York
WESTCHESTER COUNTY TAX APPEAL REAL ESTATE APPRAISAL SERVICES
Amawalk, Ardsley, Ardsley On Hudson, Armonk, Baldwin Place, Bedford, Bedford Hills, Briarcliff Manor, Bronxville, Buchanan, Chappaqua, Cortlandt Manor, Crompond, Cross River, Croton Falls, Croton On Hudson, Dobbs Ferry, Eastchester, Elmsford, Goldens Bridge, Granite Springs, Harrison, Hartsdale, Hastings On Hudson, Hawthorne, Irvington, Jefferson Valley, Katonah, Larchmont, Lincolndale, Mamaroneck, Maryknoll, Millwood, Mohegan Lake, Montrose, Mount Kisco, Mount Vernon, New Rochelle, North Salem, Ossining, Peekskill, Pelham, Pleasantville, Port Chester, Pound Ridge, Purchase, Purdys, Rye, Scarsdale, Shenorock, Shrub Oak, Somers, South Salem, Tarrytown, Thornwood, Tuckahoe, Valhalla, Verplanck, Waccabuc, West Harrison, White Plains, Yonkers, and Yorktown Heights
PUTNAM COUNTY NEW YORK REAL ESTATE TAX APPRAISAL SERVICES
Brewster, Carmel, Cold Spring, Garrison, Lake Peekskill, Mahopac, Mahopac Falls, Patterson, and Putnam Valley
ROCKLAND COUNTY NEW YORK REAL ESTATE TAX APPEAL APPRAISAL SERVICES
Bear Mountain, Blauvelt, Congers, Garnerville, Haverstraw, Hillburn, Monsey, Nanuet, New City, Nyack, Orangeburg, Palisades, Pearl River, Piermont, Pomona, Sloatsburg, Sparkill, Spring Valley, Stony Point, Suffern, Tallman, Tappan, Thiells, Tomkins Cove, Valley Cottage, West Haverstraw, and West Nyack
We also cover the entire boroughs of The Bronx, Brooklyn/Kings, Staten Island/Richmond, New York/Manhattan and Queens.
NEW YORK TAX APPEAL APPRAISAL SERVICES
PROVIDING TAX APPEAL SERVICES IN
WESTCHESTER COUNTY, PUTNAM COUNTY, ROCKLAND COUNTY AND BEYOND
NEW ROCHELLE TAX APPEAL DEADLINE 6/1/2010 - 6/15/2010
New York Tax and Assessment appeal services provided by Christopher Greco Appraisal Services, Inc for the entire NEW YORK Metro Area with expert exprience in New Rochelle and all of Westchester County.
It’s that time of the year again to take on the town and grieve those ever increasing taxes! There is no better time in recent history to grieve your taxes and we are here to help. Currently, Chrstopher Greco Appraisal Services is providing New York appraisals to over 100 homewoners throughout Westchester County. There is too much housing data being published by local, state and federal agencies that substantiates the reality of declining New York real estate values! Almost every communitye throughout Westchester County has been impacted by the housing crisis. No matter which county your property is located in from Westchester County to Dutchess County there are declining markets! Bronx, Brooklyn, Queens, Staten Island, Rockland County, Putnam County, Orange County, Nassau County, Suffolk County and YES EVEN New York Manhattan is experiencing areas of declining market value. If you believe that your property value is less than your total tax value and assessment then you have a case to fight and grieve your New York property taxes!
It is extremely important that you know the dates of your local assessor New York tax filing and grievance deadlines! Compliance with these New York Tax Grievance dates is crucial to your success. If you miss the deadline you are out of luck! That’s where we come in...as a courtesy to anyone visiting this page we have provided all the dates you need to know below.
Follow these steps, along with the instructions from your assessor's office and you will be on your way to possibly saving hundres if not thousands of dollars per year…COMPONDED every year thereafter!!!
The below information is proivded by New York State Office of Real Property Services.
The assessor completes, certifies and files a roll containing proposed assessed values for each property in the assessing unit. Grievance Day: Board of Assessment Review meets to hear assessment complaints. Last day property owners may file a formal complaint seeking reduction in their tentative assessments. PRESS "CONTROL F" ON YOUR KEYBOARD AND TYPE THE NAME OF YOUR TOWN AND HIT ENTER TO GET YOUR DATES! Please note that we can not represent you at the hearing as appraisers are non-interested third parties. We can however, provide you with an independent opinion of value and assist you with your application. We can also provide you with local, state and national data to support your claim of a declining real estate values. (appropriate fees apply.) MORE ABOUT NEW YORK STATE TAX GRIEVANCE AND ASSESSMENT APPEAL SERVICES Most localities determine your property tax burden based on an ad valorem assessment of the property's value. Sometimes, as a property owner, you get an unwanted surprise in the mail telling you your taxes are going up, and sometimes it may seem as though your assessment is too high. Often, matters like this can be resolved with a phone call. However, if after discussing your assessment with your local New York taxing authority you still feel as though your property was overvalued, a professional, independent, third-party appraiser is often your best bet in proving your case. That's where we come in. There are as many different procedures for appealing New York tax and assessments as there are property taxing districts, so it's important to enlist the help of a professional appraisal firm that's experienced and trained in the ins and outs of your particular jurisdiction. Please note: It makes sense to do your own research before determining whether to go forward with a property assessment appeal, especially before you make the decision to hire a professional appraiser. However, according to the Uniform Standards of Professional Appraisal Practice (USPAP), we are not allowed to take "shortcuts" -- i.e., your research -- and use it on its face as part of our independent evaluation. When you hire Greco Appraisal Services for a New York tax assessment appeal, you're commissioning an independent, third-party professional appraisal report. As such Christopher Greco Appraisals will do our own evaluation, beginning to end. If you're right that your property has been overvalued, an independent report is your best eveidence. Our appraisal provide year over median selling price changes from 2007 or 2008 through the effective date of appraial and give a supply and demand analysis. Couple that data along with the best comparable sales data and active listings and you have yourself a great start to lowering your taxes. Although we can not advocate for the homeowner, we are qualified to determine the fair market value or your home. MORE ON NEW YORK TAX APPEALS AND ASSESSMENT REDUCTIONS. Christopher Greco Appraisal Services, Inc. provides Bronx tax appeal and assessment appeal appraisals, Westchester County tax appeal and assessment appeal appraisals, Rockland and Orange County tax appeal and assessment appeal appraisals. Please contact Christopher Greco Appraisal Services, Inc for any of your New York Tax and Assessment appeal appraisal needs. Browse our website to learn more about our qualifications, expertise and services offered. Christopher Greco Appraisal Services Inc provided tax appeal appraisal in the following communities throughout New York WESTCHESTER COUNTY TAX APPEAL REAL ESTATE APPRAISAL SERVICES Amawalk, Ardsley, Ardsley On Hudson, Armonk, Baldwin Place, Bedford, Bedford Hills, Briarcliff Manor, Bronxville, Buchanan, Chappaqua, Cortlandt Manor, Crompond, Cross River, Croton Falls, Croton On Hudson, Dobbs Ferry, Eastchester, Elmsford, Goldens Bridge, Granite Springs, Harrison, Hartsdale, Hastings On Hudson, Hawthorne, Irvington, Jefferson Valley, Katonah, Larchmont, Lincolndale, Mamaroneck, Maryknoll, Millwood, Mohegan Lake, Montrose, Mount Kisco, Mount Vernon, New Rochelle, North Salem, Ossining, Peekskill, Pelham, Pleasantville, Port Chester, Pound Ridge, Purchase, Purdys, Rye, Scarsdale, Shenorock, Shrub Oak, Somers, South Salem, Tarrytown, Thornwood, Tuckahoe, Valhalla, Verplanck, Waccabuc, West Harrison, White Plains, Yonkers, and Yorktown Heights PUTNAM COUNTY NEW YORK REAL ESTATE TAX APPRAISAL SERVICES Brewster, Carmel, Cold Spring, Garrison, Lake Peekskill, Mahopac, Mahopac Falls, Patterson, and Putnam Valley ROCKLAND COUNTY NEW YORK REAL ESTATE TAX APPEAL APPRAISAL SERVICES Bear Mountain, Blauvelt, Congers, Garnerville, Haverstraw, Hillburn, Monsey, Nanuet, New City, Nyack, Orangeburg, Palisades, Pearl River, Piermont, Pomona, Sloatsburg, Sparkill, Spring Valley, Stony Point, Suffern, Tallman, Tappan, Thiells, Tomkins Cove, Valley Cottage, West Haverstraw, and West Nyack We also cover the entire boroughs of The Bronx, Brooklyn/Kings, Staten Island/Richmond, New York/Manhattan and Queens.
PRESS "CONTROL F" ON YOUR KEYBOARD AND TYPE THE NAME OF YOUR TOWN AND HIT ENTER TO GET YOUR DATES!
Please note that we can not represent you at the hearing as appraisers are non-interested third parties. We can however, provide you with an independent opinion of value and assist you with your application. We can also provide you with local, state and national data to support your claim of a declining real estate values. (appropriate fees apply.)
Its seems that everyone is praising the new plan that led to a cut in mortgage interest rates! But is the cut really good news for the millions of homeowners already in trouble....If homeowners are already behind on their mortgages or have deliquent credit card payments then the answer is probably NO! IMHO
I'm not a economics professional nor am criticizing the plan but is it possible that the rate cut will only help those with good credit and will do little or nothing for the millions of Americans already suffering with blemished credit scores because of the mess that the original low rates in 2003-04 started? Is the government starting another cycle which was originally fueled by low rates in the first place?
So in the end, the plan will most likely stimulate home sales and will probably help stabilize the housing market but it will do little or nothing to help those already in trouble and may result in more trouble in a year or two after these new loans close. Are the future unemployment rates not a consideration in this plan? Are those qualifying for the new loans at low rates the future bailout victims of 2010?
Please post your thoughts and let me know what you think about the new plan.
Below is an article authored by Holden Lewis from Bankrate.com
Mortgage rates plunged after the Federal Reserve announced that it would buy up to $500 billion of securitized home loans.
Rates on 30-year, fixed-rate, conforming mortgages fell well below 6 percent after the Fed announced Tuesday morning that it would buy up to a half-trillion dollars' worth of mortgage-backed securities over the next year to year-and-a-half. Bankers and brokers say rates fell as far as 5.25 percent, at least for a while. Last week, the 30-year fixed averaged 6.33 percent in Bankrate's weekly survey.
The rate reduction is exactly what the Fed intended: "This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally," the central bank said in its announcement.
"It's pandemonium around here right now," says Bob Walters, chief economist for Quicken Loans. "This is going to have a major effect on refinancing opportunities and it should absolutely translate into increased home buying."
Walters offers a hypothetical example of a California house that has lost $175,000 in value over the last couple of years. In 2006, a borrower would need a $500,000 mortgage to buy the house; today, a borrower would need $325,000.
Two years ago, the average rate on a 30-year fixed was about 6.5 percent. At that rate, the principal and interest on a half-million-dollar loan was $3,160 a month. Now, if someone borrowed $325,000 at 5.5 percent, the monthly principal and interest would be a more affordable $1,845.
The Fed's action helps not only buyers, but also homeowners with adjustable-rate mortgages who want to refinance into fixed-rate loans.
Government gift The mortgage and real estate industries look upon the announcement as a gift from Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson.
"Wow," says Jim Sahnger, mortgage broker with Palm Beach Financial Network, in Stuart, Fla. "I don't know who invited Bernanke and Paulson to Thanksgiving, but I'm glad they did! They showed up with the equivalent of a 50-pound bird and all the fixin's today, ready for the table."
He suggests that borrowers apply for loans and lock rates quickly, in case rates rise again or home values continue to fall. Declining home values can endanger owners' ability to refinance. Sahnger advises homebuyers to talk to mortgage brokers or loan officers early in the process, to identify "any issues you need to deal with prior to writing a contract," such as errors on credit reports.
Ryan Kennelly, a mortgage banker for Residential Mortgage Services, Inc., of Bedford, N.H., says the Fed's action is huge, for two reasons. "First, with lending institutions getting the much-needed support of the U.S. government, they (lenders) will ease some of their most restrictive lending rules -- opening the door to more consumers to get loans," he says, adding that more qualified borrowers means more home sales.
Second, Kennelly says, "this news also couldn't be better for current homeowners who want to stay in their homes but can no longer afford the payments due to their adjustable-rate mortgage increasing. By interest rates coming down, combined with lenders easing some of their qualification requirements, more and more homeowners in this situation will be able to refinance."
Dan Green, a mortgage broker for Mobium Mortgage in Cincinnati, calls the Fed's purchase plan "an explicit safety net for lenders, and that should encourage more lending."
The Fed's decision to cut mortgage rates won't help people who can't refinance because they owe more than their houses are worth. And people who already are two or three months' behind on their home loans probably won't get much out of it, either, says Dean Baker, economist for the Center for Economic and Policy Research, a Washington think tank.
Lack of transparency Baker worries about lack of accountability or transparency: The Fed and the Treasury have not disclosed details about their purchases under the Troubled Asset Relief Program, setting a precedent for secrecy about the Fed's purchases of mortgage debt under the plan announced Tuesday. "We don't know who they're going to be buying bonds from, or how much they'll pay -- or if they'll overpay," Baker says, adding that if the Fed pays a dollar for a security that's worth 20 cents, "that's the same as handing (the seller) 80 cents."
Baker adds: "I think it takes a lot of gall to do something like this."
Green says that there is an element of moral hazard in the Fed's action: In the future, borrowers might expect a bailout from the unintended consequences of this action. Nevertheless, the Fed's buying binge might be the best way out of a dilemma. "On moral hazard, some say it led to the bubble. It may now lead the economy back," Green says, koan-like.
Yields fall, mortgage rates do too By buying mortgage-backed securities, the Fed will be taking direct action to reduce mortgage rates. That's because mortgage-backed securities behave like bonds. When bond prices rise, their yields fall. A wonkish detour into the behavior of bonds will illustrate this point.
A bond is an IOU. Let's say you lend someone $100 and the borrower gives you a piece of paper, promising to give you $105 a year from now. That paper is a $100 bond with a 5 percent yield. The yield is equivalent to an interest rate. Now assume that the government stepped in and offered to give the borrower a better deal: $102 now in exchange for $105 a year from now. The bond's yield would be roughly 3 percent. That's how the bond's yield gets lower as the price gets higher.
The Fed says it's going to be that buyer who pays a higher price for the bond, causing the yield to drop. As the yields on mortgage-backed securities fall, consumers generally see mortgage rates fall, too.
By pledging to buy up to $500 billion in mortgage-backed securities over the next 12 to 18 months, the Fed is signaling that it's ready to buy a big share of the conforming mortgages underwritten during that period. That could keep bond yields and mortgage rates down. So far this year, Fannie and Freddie have issued about $857 billion in mortgage-backed securities, and the issuance pace has slowed dramatically in recent months.
Historically, the relationship between household income and home values can forward impending boom-bust cycles, and may predict not hitting bottom until mid-2010.
by Dave Biggers
Dave Biggers is the founder and Chairman of a la mode. With a REALTOR® mother and an appraiser father, he was pre-destined to be holding “the dumb end of the tape” with his dad while still in high school, and paid for college as a residential and commercial appraiser. An engineering and economics major, Dave used his technical background and understanding of appraising to start a la mode while still in school in 1985.
t seems these days that all the news on the TV, the web, and in the paper is focused solely on charts and graphs. Unfortunately, they all point down. Incomes, consumer spending, credit, home values, the Dow, the Standard & Poor’s, and probably your 401(k) and checking account, all are headed in the same negative direction. The only charts headed the other way are most likely your blood pressure, credit card balances, and past due billings from clients.
It’s easy to get caught up in the wild swings of the stock market and assume there’s no pattern to any of it. I’ll have to admit, when it comes to stocks, I’m not sure there is a pattern, and I’m not sure that anyone has any data to reliably say where things are going in the short term. The old models don’t work and the experts on Wall Street are proven wrong nearly every day.
Long term, however, stocks tend to be good investments. After a series of bull and bear markets come and go, the overall trend is one of solid growth. But since our news rarely focuses back past the last peak or trough — unless, of course, it’s to invoke fearful comparisons to the Great Depression — we tend to get extremely shortsighted and pessimistic regarding future performance during a downturn. Conversely, during a bull market, the population as a whole tends to think the sky is the limit.
If that weren’t true, we wouldn’t have such dramatic bull and bear markets at all. We’d have a relatively stable market with swings in value tied to general economic growth or contraction. But with a highly accessible stock market where buyers and sellers can fluidly enter and exit on a whim, values swing wildly on short term speculation. News drives the swings in hourly increments. Hence, the existence of “day traders”.
But when it comes to real estate, things are more stable and tied to external long term factors. Even the fastest flips generally take weeks or months to execute, and those tend not to drive whole markets. Real estate is by definition illiquid, and is still largely driven by owner-occupants on a national scale. Sure, you have local variations on that theme, but that also comes and goes. There are a lot of non-owner-occupant condos sitting vacant and unfinished along both coasts as testimony to the folly that it’s sustainable to build a local economy around speculation in real estate designed to sell to “others”. Eventually, the “others” have to be locals, because it turns out that every other city is targeting the same ephemeral “others”. And now, with the credit and stock markets in panic, those “others” aren’t coming around any longer to drop their excess dollars, Euros, or pounds into those projects.
At least not yet. At some point, transactions will pick back up as asking prices fall to levels that are viewed in a broader context as affordable by locals and investors alike. Across Florida in particular, that very scenario is beginning to play out. Multiple MSA’s are seeing transaction counts rise dramatically, but with median values dropping by 20%, 30%, or more from recent months and quarters.
It might seem that it’s as volatile as the stock market, but it’s really not. The key lies in those pesky homeowners. As consumers, they only have so much money to spend, and it only grows so fast. Whether it’s in markets for cars, groceries, or homes, prices can’t significantly outpace incomes over the long haul without a couple of things happening: Either behavioral changes have to take place, or financing has to be applied as leverage to reduce the price of the target product in monthly terms.
The annual rate of change of the Case Shiller Weiss Home Price Index versus the annual rate of change of per-capita income, as reported by the U.S. Bureau of Economic Analysis, shows unsustainable growth in home affordability from 1997 to 2005, followed by the severe drop-off. Click the graph for a larger version.
For example, when energy costs spike, consumers make behavioral changes. They drive less, they switch to more fuel-efficient cars, they install energy-saving light bulbs and windows, or they just stop doing other things that cost too much and free up extra spending power for energy. Disposable income is a limited sum, and the expenses have to fit into the budget (unless they rack up credit card debt). Consumption drops, wholesale prices follow, and eventually energy costs come back in line. Supply and demand works.
But on high ticket items like cars, college, and homes, leverage is the key to unsustainable pricing increases, not behavior. If a consumer has $1000 a month to spend and it only grows at 5% per year over time, the only way to have prices grow faster than that 5% is to apply financing tricks that get the same $1000 to pay for a higher-priced item. You know what happens next in the housing market — we see “products” with terms like zero down, 125% LTV, 80/20, and so on. Thankfully, that too is unsustainable. Over time, creative financing eventually comes home to roost, lenders start to fail, and demand drops again as financing dries up and homes become impossible to afford. Home values fall back to levels sustainable over the long term by nominal income growth.
Click the graph for a larger image. This chart plots the Case Shiller Weiss Home Price Index (blue) versus the U.S. Bureau of Economic Analysis figures for per-capita income (red). Both are calculated using nominal (unadjusted for inflation) figures, but each benchmarked so that the values in the first quarter of 2000 are considered "1.0", and all values for each series before and after are relative to the benchmark date's value.
Where the blue line is above the red, home prices are less affordable relative to per-capita income. Where the blue line is below the red, home prices are more affordable compared to per-capita income. Over long periods, home prices will temporarily fluctuate above and below income growth but in general track linearly to income.
A. This area represents the home price boom prior to the S&L crisis. Home values peaked at 0.80 relative to Q1-2000, in Q3-1989.
B. This area represents the home price bust and the period of the S&L bailout. Home values bottomed out in mid-1994.
C. The drop in income (red line) and the slowdown in home prices (blue line) are the result of the combined effects of the tech bust and 9/11. Subsequent lowering of Fed rates and loosening of underwriting standard drove the boom through late 2005.
D. The housing boom peaked in Q2-2006 at a Home Price Index of 2.21 relative to Q1-2000, meaning that homes had risen by 121% in six years. Income had risen to an index of 1.27 relative to Q1-2000, indicating a 27% increase over the same period.
E. The dotted lines indicate one potential path which home prices may follow in order to realign with income growth. Home values would have to drop between 17% and 26% from current levels to reach this equilibrium.
This chart plots this relationship in crystal clear fashion. The solid red line represents an index of real (not adjusted for inflation) quarterly per-capita national incomes as reported by the U.S. Bureau of Economic Analysis from 1987 to present, with the first quarter of 2000 used as the baseline value of “1.0”. Incomes in the second quarter of 2008 are 1.41 compared to Q1-2000, meaning that per-capita current-dollar income is 41% higher than it was back then.
The solid blue line represents the Case Shiller Weiss Home Price Index, similarly adjusted to a baseline of “1.0” in Q1-2000 for proper comparison to per-capita incomes. As you can see, the peak of the CSW value index occurs in the second quarter of 2006, at a value of 2.21, indicating that home values were 121% higher than they were in Q1-2000. But looking at the same point on the income chart, we see that by that time, per-capita income had only risen by 27% during the same six-year period.
That can’t go on long. And it didn’t. The home value index is now “only” 76% higher than it was in Q1-2000. And it’s still headed down. Logic dictates that it will continue to go down until it meets back up with — and probably overshoots on the downside — the predicted long-term path of income growth.
Home prices nationally still have to drop 17% to 26% from their current levels before reaching bottom in 2011. That time span would be a five year downturn, just like during the last major housing crisis.
As you can see, it’s happened before. From 1987 to the present, incomes have generally followed a stable growth pattern the entire 21-year span of the chart. But home values have risen faster, peaked, fallen back down below, and then slowly caught back up again in prior boom-bust-boom cycles.
Look at the late-80’s boom and the S&L crisis. The Home Price Index peaked at 0.80 in the third quarter of 1989, stayed flat until the second quarter of 1990, and then fell until mid-1994, a five year downturn. It stayed stagnant until incomes grew, excess inventory was purged, and the banking system’s overall health was restored by the Resolution Trust Corporation.
But look at the broader period from 1987 to 1999 on the chart and you’ll see that even through the turbulent S&L boom and bust period, home values and income stayed relatively coupled to each other. The markets worked as expected, pulling values back down, bottoming out, and then gradually curving back upward in a near mirror image of the downturn.
If the first period where the blue value line is above the red income line reflects decreased affordability, then the second period where the blue value line falls below the rate of income growth represents an equal period of comparatively affordable housing.
But from 1997 on, you can see the incredible run-up in home values beginning, where values completely decouple from incomes. Not too surprisingly, that corresponds with the directive by the Clinton administration to Fannie and Freddie to alter their underwriting standards and purchase massive amounts of loans serving traditionally disenfranchised lower income groups, in order to encourage home ownership. Fannie and Freddie created the subprime market almost overnight.
By late 1999, you can see home value increases pass back over to the topside of income growth, and then it shoots up like a rocket on its way to the moon, as first the tech boom and then incredibly loose lending standards and low Fed rates took over.
Starting in 2001, a refinance boom was created by those dramatically lowered Fed rates. But by 2003, that boom was coming to an end and scores of thirsty mortgage companies and Wall Street firms started looking for the “next big thing”. Fannie and Freddie’s newly created subprime market appeared to be a potential gold mine.
For a short time, until late 2005 and early 2006, it was. Lending standards were driven not by risk but by the propensity to reach every possible borrower with some form of loan product. Progressively more exotic instruments were devised to tap into the last remaining unexplored regions of potential homebuyers.
It’s not surprising therefore that only a small dip following 9/11 and the tech bust mars an otherwise spectacular rise up to an equally spectacular flameout in 2006. Queue the ominous music and play video clips of yards with “For Sale” signs, the Bear Stearns and Lehman Brothers logos, and a quick shot of the corporate offices of Fannie and Freddie, and you have the background for your own cable news show focused on that precipitous post-2006 drop off.
Just as you can’t avoid death or taxes, at least not permanently, the run up in home values couldn’t avoid the fact that over time, value growth has to correlate with income growth. And indeed, over the past 40 years, they’ve both been averaging a growth rate of around 6%. They only diverge significantly during the boom and bust cycles.
The bust from 2006 to present has been incredibly steep, but like its previous boom and bust cycles, it thus far roughly matches the slope of the run up the peak in the first place.
So where does it go from here? And when does it end?
If you look at the chart, I’ve plotted a defensible (though arguably optimistic) projection of the path that incomes and home values might follow before they realign in a sustainable pattern. According to these numbers, values would have to fall down at least to the levels last seen in the middle of 2003, when the adjusted Home Price Index was at 1.46, or 46% higher than the baseline of 1.0 in Q1-2000. With the index at 1.76 currently, that means values will probably have to drop another 30 points or more relative to Q1-2000, and it will probably take until at least the middle of 2010 before we see it bottoming out.
If the correction falls further below the growth line plotted by income, which is quite possible and even likely, it could be a 45 point or more drop in the index relative to Q1-2000, with the timeline stretching to mid-2011 or later before a rebound.
When you convert those point drops into percentages relative to current home values (as opposed to relative to Q1-2000), it means home prices nationally would have to drop from 17% to 26% from their current levels before reaching bottom in this scenario. And perhaps not coincidentally, that 2006 to 2011 possible span would be a five year downturn just like we all experienced during the last major housing crisis and government bailout.
Just as the S&L boom and bust mirrored each other, and the slope so far on the latest bust is the twin of the slope on the most recent boom, it’s possible that the overall value correction — the area of the curve where the blue value line passes under the red income line at the end of 2009 — could be much larger downward, mimicking the size and scale of the prior boom.
If that happens, the Home Price Index values could slide all the way down to the 1.0 range or lower, wiping out all the gains since the start of the century. At the same time, the trough would occur sometime in 2012 or beyond.
It’s unlikely, given the penchant for government intervention, that the trough would be allowed to fall that far. We’d probably see substantial income stimulation and housing-related tax incentives designed to bolster home values for a softer landing. However, the softer landing might flatten the value slope, causing the decline to be less severe but at the same time causing it to take longer to return back to parity with income.
Every appraiser has studied Gross Rent Multipliers, or GRM, as applied to individual homes. But on a macro scale, GRM also works well as a metric against which to measure relative housing affordability and therefore the amount that values have to come up or down before reaching historical parity with rents.
In the same way that consumers have to adapt directly to energy costs because there isn’t a corresponding lending component, they also have to adapt to changes in rent since they can’t “mortgage” the rent. They either can afford it, or they can’t, and therefore rents are more stable, reflecting income growth. Calculating the national or local GRM using average or median rents versus home values over long periods of time results in a similar chart to the one shown here.
The good news — besides the fact that you can probably short national homebuilder stocks till at least 2009 — is that transaction counts will increase, and therefore the number of appraisals ordered will rise, long before the values hit bottom. The values will only bottom when excess supply is no longer being absorbed at high rates and scarcity becomes the watchword. To get there, inventory measured in months will have to go from double-digit levels to nine months or less. At six months, markets start heating up substantially and the recovery is in full swing.
You can keep an eye on these metrics in your area to get a handle on your own personal business planning. It’s easy to plot your own chart of local income versus local home value changes by simply using your MLS’s median home stats and the income growth statistics published by your state and county authorities. Throw in a chart of inventory levels per the MLS as well as transaction counts, and you’ll have a great microeconomic business predictor. It’s not hard to do, but it is hard to remember to do it regularly — and then to act on it.
The bad news, of course, is that after this market comes through its natural correction and flattening, all the charts and graphs in the world won’t stop lenders and homebuyers from doing the same thing all over again.
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