‘The Seller Is Starting To Blink’ On Long Island
A pair of reports on the Long Island housing bubble. “The days of eye-popping monthly real estate gains are now the stuff of real estate lore. Though Island housing prices remain up year over year, Suffolk battled a moderate price drop in April and Nassau remained stable. Buyers have plenty of homes to choose from: The region’s inventory skyrocketed more than 50 percent in the last year.”
“‘We’re not getting as many offers as we were,’ said Roberta Moldawsky, who specializes in the Great Neck area. ‘The buyers seem to be holding off. We’ve got a lot of inventory and things are selling slower.’”
From NewsDay. “Welcome to the new world of real estate. Doesn’t it look familiar? It’s been nearly a decade since the housing supply was this high and annual price increases were this low. Residential inventory is increasing at a record annual pace.”
“Put that together with increasing interest rates and you get the beginnings of a buyers’ market, experts said yesterday. Residential inventory rose by 65 percent over the year in Suffolk County and 76 percent in Nassau County, each reaching levels not recorded as far back as the MLS records go, to 1980.”
“And the housing supply ratio that shows how long it would take to sell out the inventory at the current pace stands at 10 months in Suffolk County and nearly nine months in Nassau, the highest levels since 1998 and 1997 respectively. In Queens, where the market is not entirely based on the MLS, and where demand is often higher, inventory rose nearly 88 percent.”
“As the real estate market’s prime selling season moves on, many are suggesting that it has been one of the slowest springs in the past six years. And that slowdown is likely to continue into the summer, experts said, pointing to the Federal Reserve’s decision to increase short-term interest rates to 5 percent yesterday. ‘We’re in a buyers’ market as soon as the Fed increases rates to 5 percent, so we’re in a buyers’ market now,’ said Martin Cantor, the chief economist with Sustainable Long Island.”
“The signs that sellers have lost the upper hand are already there, said Beth Marten, who heads a real estate agency that represents buyers. ‘Buyers are starting to negotiate and sellers are starting to give,’ Marten said. ‘The seller is starting to blink.’”
“But other agents said the home buyer is not yet in full control. ‘A correction is clearly evident,’ said Joyce Styne, (broker) in Greenvale. ‘However, there’s still time left [for sellers] to catch the ring on the carousel.’”
“Styne noted that of 60 updated listings in her region yesterday, 34 had lowered their listed prices.”
The New York Times. “In its over-the-top twist on the usual brokers’ inspection, the open-house party may be the surest sign yet that the supersonic real estate market on Long Island is spiraling back to earth. Now it is the houses that are plentiful and the buyers who are scarce, and brokers are turning to increasingly splashy marketing tactics to drum up interest.”
“So, instead of the usual noon-to-three weekday preview for agents or a Saturday open house for the public with balloons tied to a sign, Shawn Elliott staged something more like a bar mitzvah celebration for the Tall Oaks house.”
Thanks to the reader who sent in the NYT link.
Amazing figures on inventory– thank you Ben for posting and to whoever sent link — Long Island’s market is tied to NYC’s, and it’s hard not to believe that inventories haven’t bulged in the city as well. I feel for those folks in LI, though - taxes are a nightmare, though Bloomberg seems to want to catch our taxes up to LI’s.
OT: (sorry)
to SCDave. Replied to your post on last thread. We’re cool (and always have been).
Clouseau
I saw it…Thanks Doc…..
I read an ad for a home on LI (~$650K) yesterday, which read, in part: “Make Offer”, “Seller will pay first 3 years of 30yr conv. Mort @1%” (whatever that means), and “Seller will pay for buyer to take a one week vacation to anywhere in the world”. Now that’s motivation.
That was after getting into an argument with a realtor, the jist of which was that he felt a home he was listing, which was admittedly beautiful and on a great block, was fairly priced. My feeling was that since it was still on the market for the past nine months, maybe he was in error.
Only one week? (rolls eyes) What is the world coming to? Really he should offer 2 weeks. ;o)
where was this? saw a place out east recently with a free SUV included in sale of home.
maybe they should offer one similar home for free with every purchase.
that should get rid of some excess inventory and still keep official sales price statistics at a comfortable level
I’ll wait for the two-for-one offer.
I wonder if anyone measures which percentage of MBSs are backed by SUVs, flat screen tvs and vacations?
The seller isn’t paying for these things, of course, the buyer is. Just like when you buy a car with “free” sunroof, etc.
“But other agents said the home buyer is not yet in full control. ‘A correction is clearly evident,’ said Joyce Styne, (broker) in Greenvale. ‘However, there’s still time left [for sellers] to catch the ring on the carousel.’”
time left before what? sounds ominous!
Catch a ring on the carousel….
Right before it breaks off its bearings and rolls down the hill and into the sea…..
There is still time to catch a greater fool ?
I’ve been keeping an eye on the market here for over a year and am so glad we didn’t buy last summer…renting a house for less than half what we’d pay ‘owning’ with the high prop. taxes etc. seeing tons of stuff just sitting (one open house I went to months ago is still holding OH’s - the property’s been for sale for at least a year, empty, family relocated out of state and still listed at $500k no reductions - ???) and tons of listings taken off/put back on mlsli.com with new mls #’s and maybe a new photo. deceiving. mlsli shows over 30k listings & growing every day - I think maybe 10k homes were sold here last year. will things go downhill fast here like FL/Phoenix/SD etc.??
I’m fairly new to this. Where are you?
“reaching levels not recorded as far back as the MLS records go, 1980″.
Whoa! I remember 1980. And not all that fondly I recall. I think you can safely say that the few closes they are getting can be attributed to the “Zombie Consumer” (people with no savings and no prospects of a raise) but who continue to spend anyway. Is this part of the new mantra, debt=wealth?
Is this part of the new mantra, debt=wealth?
Middle class people know deep down they’ve been screwed by their government’s Ponzi scheme manipulations. The whole deal is crooked. The continued consumption is simply part of the mechansim for coping with the attendant depression.
WTF…eat, drink, and be merry for tomorrow we die.
“Is this part of the new mantra, debt=wealth?”
Bingo. As much as it tortures those who worship at the altar of the failed economic ideology of “trickle down economics”, the rewriting of simple economic truths in the past 5-6 years has come home to roost. Those who took power of all 3 branches of government have sold the stupidity that “debt is good”, “lower wages is good for the economy”, “offshoring of jobs is good for the economy”, “premptive wars are good” and that exploding energy prices have nothing to do with the size of the vehicles people are buying.
These same power grabbing, borrow and spend charlatans will tell you that common decency and gaurding the interests of children and the elderly costs too much money and they should fend for themselves.
Nothing like rewriting the rules huh?
OT -
You really got my blood pressure up. Thanks, I neeed that, as it’s normally low. You live in VT? Where a child rapist (little girl, 7 years old, raped for 4 years) gets 60 days? If that’s your idea of protecting the interests of children, I’ll thank you to take your rants back to DU and off of the Housing Bubble board.
I know the truth is bothersome but by all means, see your doctor pronto. I don’t want you to have a coronary as the corrupticans head to jail and lose power.
Don’t worry - I have health insurance. You see, we work for a living and take care of our kids.
But only irresponsible people need health insurance. GW says so.
Hey Cunni, you just never get tired of being a jerk, do ya?
I detect an antagonized coward using an alternate username.
Nope Cunni. I’ve been calling you out for days as Joe.
You’ve certainly been babbling like an idiot for days.
Lingus, did you see my msg. to you about the SLOBburban? If not, go on the Dallas thread. Pretty amusing.
LMAO! fat Ray and hairy Darla!!!! Syphilitic cousins of the fat Tony and hairy Marie of New England!!! The Chevy SLOBurban in the driveway is a must to conform to the rest of the debt ridden idiots.
Good one txchick….. Are you a native of tx?
No. NYC
Aames Investment Corporation (AIC), a nationwide subprime mortgage lender today reported diluted net loss per common share of $0.22 for the first quarter of 2006.
Revised Guidance
Based on the current outlook for the Company and the subprime industry, management expects diluted core EPS for 2006 in a range of $0.65 to $0.75 per share. Although the Company continues to anticipate positive core diluted EPS in the second quarter, the change from the previously announced guidance reflects the higher-than-anticipated net loss for the first quarter, as well as the subprime sector’s current loan-pricing environment and volatility
Mr. A. Jay Meyerson, Chairman and CEO of Aames, said, “We were pleased with the success of our retail growth strategy in the first quarter, with the division growing by 44% over last year and now accounting for nearly half of our total production. We were also encouraged with the progress on our strategies to improve our results for the remainder of the year, even as we began pursuing a possible sale to better position this enterprise for the longer term. We are moving forward on our plans announced on March 27 to reorganize our parent company to eliminate its REIT status and have successfully eliminated a meaningful amount of operating costs. By April, we closed two wholesale operating centers and eliminated over 120 positions in the Company. At the same time, we continue to focus on growing profitable loan volume, with a particular focus on our strong retail franchise, which enhances our ability to weather the challenges in the subprime industry.”
Meyerson continued, “However, we were disappointed that we experienced a higher than anticipated loss in the quarter and have taken actions to address several issues that led to the negative financial results. Our lower-than-expected gain on sale revenues resulted from increases on loan coupons not keeping pace with the market, as well as provisioning for an unanticipated loan repurchase. The prices paid in the whole loan market for second liens and lower FICO loans continued to decrease during the first quarter, which particularly impacts our wholesale operation, where a majority of our production is in 80/20 loans. In response, we have tightened credit guidelines and made more aggressive increases in our coupons, originating loans in the past several weeks with first lien rates in the 8.30% to 8.45% range. We have also eliminated a number of loan categories from our product menu, which will reduce volume in our wholesale channel but improve our gross gain on sale rates.”
Sales up 44% and you still lose money?!?!?! Add these 120 people to the growing list of RE job seekers!
The last paragraph also clearly shows that credit has begun to tighten.
If regular people were literate, this report would scare the crap out of them keeping people from buying. All is NOT rosy in mortgage land folks.
“Our lower-than-expected gain on sale revenues resulted from increases on loan coupons not keeping pace with the market”
That doesn’t sound good at all.
“as well as provisioning for an unanticipated loan repurchase”
If I remember correctly, wasn’t this when the end-holder of the loan forced Aames to take back a severely nonperforming loan package that was filled with subprime crap where people were refinancing way too often?
“The prices paid in the whole loan market for second liens and lower FICO loans continued to decrease during the first quarter”
In other words, MBS investors are waking up, and demanding higher risk premiums.
Looks like someone is learning the hard way that you can’t really win the “sell at a loss to increase volume” game.
Only a matter of time until the other subprimers learn this…
getting housing going after that will be worse than pushing a string, it would be more like pushing a Mack truck that’s barreling towards you at 90mph.
clouseau.
I wish I would read this thread earlier because it is really too late to reply to your post, but you are right. They are tightening credit and that is ominous.
“It’s a clear picture of a slowing market, though one in which the bubble isn’t bursting.”
Do Randi Marshall’s repeated comments along these lines, annoy any other Long Islander readers? She always fits in “no bubble bursting” to eneryone of her articles, regardless of the data/content.
If they say “it isn’t about the money”, it’s about the money.
Lived on LI for 50 years (30 as homeowner) and sold in late 04.
Taxes, prices and congestion are real issues here more so than most areas in the US.
Also, remmeber in the late 70s when schools were closing (subsequently reopened 8 years later) due to lack of enrollment?
Well that demographic is in the first time buyers age range and there are fewer bodies to buy at the lower end.
LI will decline about 30% over 3 years as economy and rates take a slow toll.
Friend in Roslyn Country Club had open house last weekend-
only 1 prospect sniffed around. There are 60 homes for sale (most gorgeous) and no buyers.
Wow, in Roslyn? Surprising. It’s sad, what’s happening there. My husband won’t even consider it because of the congestion, even though my family is there and my hometown is lovely with a great commute and fair taxes. I wonder, if all the boomers move and there are fewer first time buyers (I know younger people who have already moved out of state due to price) will LI become nice again? And cheaper? I’d take it!
Oops…should clarify I didn’t grow up in Roslyn, but am still surprised it’s having a tough time, being the nice North Shore town it is…a realtor friend told me she thought the North Shore would fare better…guess not!
Every realtor thinks their particular hunting ground will somehow be immune from the consequences of a global too-easy-credit boom.
I know an agent listing homes in the Roslyn/Country Club area. Tells me many open houses have gone without a single prospect over the past two months. This is a more exclusive LI area.
I’ll agree with that - only reason we’re here on LI is because of a good job. It’s not all bad here, but as a potential 1st time HB with 2 small children - no family here - I’d move in a second…
Pig manure to the rescue…
http://www.belleville.com/mld/belleville/news/state/14449289.htm
How cool is that!
You crack me up HD….
It sounds like exhaust fumes are on their way to becoming more noxious…
I have to say, that is AMAZING. 3.6 GALLONS per day of crude oil from each pig? Wow.
Sometimes I doom and gloom about peak oil… but if we can effectively harness pig poo… think what we could do with my farts!
clouseau
The builder/developer Pulte just sent me a e-mail to announce they are offering 10k off their golf course homes ,and 5k off the ones without the golf course view .
That’s pitiful, Wizard/ Pulte needs to get with the program and really start lowering prices. 10k wouldn’t pay for my bullets.
BayQT~
Yep
Hey Lingus-
There’s a top story on Bloomberg about NYers moving to Vermont looking for cheap real estate. Try not to bust a gasket as you read it.
I checked bloomies but found nothing. linky?
I have the direct service, so I can’t send you a link. Normally they put top stories on the web site.
I have been watching Jim Stacks charts at Investech.com for the past year, and forgot the last few months….Pictures speak louder than words.We are way past the peak ,and it’s looking mighty steep..
http://investech.com/
What is that a graph of? They don’t explain it.
Boy, talk about getting in while others are trying to get the f- out
May 11 (Bloomberg) — Merrill Lynch & Co., preparing for its biggest expansion since the 1990s, plans to buy a mortgage lender, triple its corporate investments and increase trading bets to boost shareholder returns that trail those of rivals.
Merrill’s top managers spent the past six months determining how to spend “excess capital,” Chief Administrative Officer Ahmass Fakahany said in an interview last week. The New York- based firm, which has the world’s biggest network of brokers, decided against expanding by buying a consumer bank, he said.
“What’s new is an increased emphasis on building our institutional business,” said Fakahany. “When I say mortgage origination will take capital, that’s because it requires an acquisition.”
This is ungluing much faster then I thought possible. Three months ago, all of my friends believed I was crazy in calling for a fall in prices. They said No way! Just going up! Now they believe the permanently high platue bull. We will see what they say in another six months. I think the key here on the island is commercial RE, which is still on fire, when that goes lok out below. watch Reckson Assocs. REIT they are big holders here on Long Island.
By the way there are seven houses for sale within two blocks of my home.
I love the fact that that “house party” included hired breakdancers-and that people were commenting that it was nice to see what the house would actually be like to live in. I can hear the seller looking over the bill later “$2000 for champagne… $1000 for caviar…$1500 for fuggin BREAKDANCERS?”
Breakdancing is so “yesterday,” just like the real estate boom.
If by yesterday you mean 1985.
I disagree about breakdancing. It’s still very cool, you gotta check what they do at the battles.
OT:
Ben and everyone else here.
NAR has moved on to the bargaining phase.
My evidence is a full page ad on the back cover of The Economist of 5/6/06-5/12/06.
“Since America’s banking system was first founded, the US Congress has worked to prevent the mixing of banking and commerce. The Gramm-Leach-Bliley (GLB) Act strengthened this policy. Recently, this separation took a giant step backward when the Office of the Comproller of the Currency (OCC) expanded national bank authority to develop commercial real estate and residential condominium projects.”
“Some banking conglomerates can now own luxury hotels, condos - even a windmill farm. This mix of banking and commerce is risky and could lead to instability in some of our largest banking institutions.”
“Are banks about to repeat the mistakes that helped lead to the S&L crisis? That could spell disaster for taxpayers and America’s banking system unless Congress Acts now.”
NAR
We are in the active blame shifting or bargaining phase.
Just as NAR’s many members are actively looking for bagholders of residential real estate. NAR is feverishly working to create the perception of other entities fault for the gigantic sh#t sandwich that they had a hand in making.
I am disgusted.
Visions of crowds of angry peasants wielding torches and pitchforks walking towards the corner RE/MAX office…
Good catch and good analysis. NAR shills should shampoo my crotch (not literally of course). The deserve to get indicted under RICO.
““So, instead of the usual noon-to-three weekday preview for agents or a Saturday open house for the public with balloons tied to a sign, Shawn Elliott staged something more like a bar mitzvah celebration for the Tall Oaks house.”
Free food at all of the open houses at the expense of the FBers FOR EVERYONE. Let’s all PARTY and not buy the POS houses.
In the future, the proverbial “BULL$HIT” might be changed to PIG$HIT as we fill our cars with it. Pigshit fuel for Hummers everywhere!!!! LOL
“In its over-the-top twist on the usual brokers’ inspection, the open-house party may be the surest sign yet that the supersonic real estate market on Long Island is spiraling back to earth.”
Free guacamole for everyone!
(So, instead of the usual noon-to-three weekday preview for agents or a Saturday open house for the public with balloons tied to a sign, Shawn Elliott staged something more like a bar mitzvah celebration for the Tall Oaks house.)
EXPENSIVE OPEN HOUSE PARTIES WITH LOTS OF GOURMET FREE FOOD FOR ALL AT THE EXPENSE OF THE HOMEOWNERS.
the term PIG$HIT may now replace BULL$HIT - may all the Hummers be filled with gallons of it. LOL
things still sellling in 22151
3 lights from pentagon
but looks like 05 pricing
Sales up 44% and you still lose money?!?!?! Add these 120 people to the growing list of RE job seekers!
They are making up for the loss in VOLUME - LOL hysterically. Aames is nothing but a bunch of scamming crooks. Anyone from there shouldn’t even be asking “Do you want fries with your Big Mac?”