Real Estate New York

Market Update October 2007

More STAR Middle Class Tax Relief

An Additional School Tax Rebate is available for homeowners who receive the basic or senior Star exemption on their property taxes.

However, for basic STAR recipients the rebate must be applied for by November 30th, 2007. You will need the notification letter from the New York State Property Tax Department. If you have not received this letter by September 25th contact the tax dept. at 1-877-6-STAR-NY (1-877-678-2769)

With the rebate notification letter you can either return the filled out form by mail or apply online at: http://www.tax.state.ny.us/star/2007/default.htm

You will need your social security number as well as your spouse's and the code from the notification letter.

If you have questions you can get them answered at the number above or click here

Fireplaces

Warm up with sensible tips on how to market your listings' fireplaces. Learn the correct vocabulary, the different styles, and what fireplaces reveal about a home's architecture.

Not only does a fireplace make a house feel cozy and warm, it also can be the focal point of a room and an important design element.

Indeed, nearly a quarter of buyers said finding a home with one or more fireplaces was “very important” in their home-shopping decisions, according to the 2007 NATIONAL ASSOCIATION OF REALTORS® Profile of Buyers' Home Feature Preferences.

Click for complete article By Barbara Ballinger

Getting Ready to Own Your New Home

8 Ways to Improve Your Credit Credit scores

Along with your overall income and debt, are a big factor in determining if you’ll qualify for a loan and what loan terms you’ll be able to qualify for.

1. Check for and correct errors in your credit report.
Mistakes happen, and you could be paying for someone else’s poor financial management.

2. Pay down credit card bills.
If possible, pay off the entire balance every month. However, transferring credit card debt from one card to another could lower your score.

3. Don’t charge your credit cards to the maximum limit.

4. Wait 12 months after credit difficulties to apply for a mortgage. You’re penalized less for problems after a year.

5. Don’t purchase big-ticket items for your new home on credit cards until after the loan is approved.
The amounts will add to your debt.

6. Don’t open new credit card accounts before applying for a mortgage. Having too much available credit can lower your score.

7. Shop for mortgage rates all at once.
Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time.

8. Avoid finance companies. Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor credit management.

Building a down payment Money Magazine's Walter Updegrave answers a readers question about the best way to build a large down payment in 4 to 6 years.

Click for Video (best for BroadBand)

When Should You Make a Purchase Offer?

Making a purchase offer and actually buying a home are generally two different actions, but home buyers sometimes confuse the two. Especially in states such as California where the purchase offer is not the final negotiation due to contingencies in contracts .

Do You Hesitate to Make a Purchase Offer?

If the home you are thinking about buying is likely to quickly sell, and if you have a way to later cancel the contract, you should immediately make a purchase offer.

Click for Complete Article by Elizabeth Weintraub of About.com

Inventory

Well, here's the statistic as requested. The graph above shows the number of sales in a given month divided by the number of homes on the market in the four main counties of the Capital Region. This ratio can be used to determine whether we are in a buyers' or sellers' market as indicated in Dennis Maier's article on Market Timing featured in eZine Real Estate. In general, if it would (theoretically) take less than 6 1/2 months to sell the current inventory it's a sellers' market. If it would take more than 9 months to sell all the homes on the market it's a buyers' market.

As you can see, last month the market still favored sellers. As of October 1, the market has turned solidly in the buyers' favor.

When the inventory begins to drop it's an indication of a change in the market to again favor sellers.

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Fed Rate Cut May Buoy Home Prices

A quarter-point drop had already been priced into the market for Treasury bills and other instruments tied to mortgage rates, according to Richard DeKaser, chief economist for National City Corp. The deeper cut means mortgage rates may have a little more room to fall, giving support to prices.

The Fed Funds rate affects a range of consumer loans, including home equity and mortgages. Lower mortgage rates would add to the number of home buyers able to afford to make purchases, increasing demand for properties and buoying home prices. Buyers generally care less about the actual purchase price than they do about the size of their payments. If rates drop, so will monthly debt obligations.

Click for complete Article

On a related topic: Defaults Are Stabilizing

Housing and Urban Development Assistant Secretary Darlene Williams said the Federal Reserve's bigger-than-expected half-point cut of its key rate last week signaled that authorities were taking action to support the economy.

The concern has been that certain sections of the credit markets have frozen up as banks and investors have grown fearful about getting repaid because of the surge in defaults on mortgage loans, especially subprime loans made to borrowers with poor credit.

"The hope is that the Fed rate cut would send the signal that government is concerned and willing to continue to analyze the situation so that the market can relax," Williams said."

Click for complete article

Market Update

Market Statistics as of October 1, 2007

This graph represents average sale versus list prices

Septembers numbers show a further decline in the average list and selling prices for the month of September. However, The average sale price of $233,510 is still more than the median price of $204,000 indicating a propensity of higher priced sales pulling up the average.

New this month: our new inventory tracking statistic (facing page bottom) shows a clear buyers' market.

Mortgage Rates and Trends

The link to up to the minute New York State mortgage information seems to work better than presenting the actual graph.

Click for up to the minute mortgage rate information

Lies, Damn Lies, & Statistics

According to Mark Twain, "There are three kinds of lies: Lies, Damn Lies & Statistics." *

George Bernard Shaw maintains, "It is the mark of a truly intelligent person to be moved by statistics."

According to the Capital Area Business Review and the Albany Times Union the median price of area homes has risen 4% while the number of sales is down 11%.

Meanwhile, stories of double-digit devaluation of home prices across the West and Midwest appear regularly in the national media.

What exactly do these statistics mean, if anything, to area home buyers? Is this a good time to buy a home or not?

Short answer: yes. The best time to buy real estate is when prices are at the low end of the cycle.

Long answer: maybe. It is the perception of the market rather than the market statistics that determines where in the cycle we are at any time.

If home buyers desert the market because of fears of future market devaluation then lower prices is what they will get. After all, who wants to buy a new home and find out it's worth less next year and the year after. This is not only a disappointment since circumstances may force a sale for less than owed causing a situation where a seller must bring money to the closing table to pay off a mortgage short-fall, in effect, paying someone to buy their home. Ouch! This happened more times than I care to think about in the early 90's when selling a home was more damage control than cashing in on equity.

For sellers, on the other hand, the perception of a buyer's market often means selling for whatever they can get in hopes of avoiding further declines and the possibility of the same scenario as noted about as a buyer's concern: having to sell their home for less than the amount owed or less than is needed to buy the new home.

But where in the cycle are we? That's where statistics can help.

Starting this month we will track a new element in our quest to gage area market timing beyond the number of sales and the average price paid. (article on facing page) It is the number of homes on the market in relation to the average time a home takes to sell. Or in basic economic terms: supply versus demand. What this tells us is how motivated area buyers are. In other words, how they perceive the market. This in turn is a reliable way to gage which way the market is moving: favoring buyers or sellers.

With this knowledge an informed buyer has a good chance of doing very well in spite of the profits of doom. The market always cycles: prices rise until the lack of affordability reins them in. Smart buyers know this and wait until a perceived down period just like the one we are in now.

* Yes, he was quoting Benjamin Disraeli.