For those tired of dreary realty reports, Gil Mercurio, CEO for Westchester/Putnam Board of Realtors, had some good news to share while reviewing 2009 sales: a new program Sunny Mae has just started to offer.
“It is going to allow home purchasers to monetize the home buyer”™s credit,” Mercurio said. “That”™s meaningful, especially for Westchester, which is not traditionally a first-time homebuyer”™s marketplace; we have not really seen an impact from the home buyer”™s credit.
“One of the major obstacles buyers are facing is getting the down payment and closing costs,” he said. “I”™m optimistic this will have a beneficial effect for all of us in the industry, particularly here in Westchester. It”™s going to take at lest three months to see how helpful it really is, but I believe it will make an impact.”
Ann Garti, CEO for Orange County Association of Realtors, said the $8,000 first-time buyers”™ tax credit “has definitely helped boost 2009 home sales. Our fourth-quarter figures show much more activity than the third quarter. We”™ll certainly see a different picture when the figures are compiled in January. Overall, the last quarter helped us make up for the entire year. The lower-priced homes and low mortgage rates attracted the first-time home buyers; coupled with the tax incentive, that certainly helped.”
John Greenan, Dutchess County Association of Realtors”™ chief staff executive based in Poughkeepsie, saw sales improve significantly, “but prices have continued to decline. The first-time homebuyers”™ credit was extended to April; with the new credit incentive for homeowners looking to buy up or downsize, we hope to see the market continue to improve.”
Don Mituzas, associate broker for Prudential Serls Prime Properties in Brewster, sees buyers out there, “even at this time of year. I was out showing houses on Dec. 13 during that terrible ice storm. There are companies moving to Putnam and families relocating here.”
Mituzas predicted home prices will be fairly stable in Putnam in 2010: “Inventory has not gone up. If houses are priced correctly, they are going to sell.” But how does a homeowner ascertain what a home is really worth in this era of uncertainty. Matuzis says homeowners should price their homes “30 percent less than what you think your house was worth before the recession hit; that”™s the best rule of thumb. People who remained conservative, stuck with their first mortgage and didn”™t use their home”™s as credit cards will walk away with money. Those who ate up all their equity ”“ and what was beyond the home”™s true equity ”“ are in trouble.”
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For homebuyers ready to downsize or ready for a bigger house or a new neighborhood, the new enhanced credit of $6,500 is available for single buyers whose earnings are up to $125,000 and couples with an income of up to $225,000. ?“The credit extends beyond those figures, but decreases as salaries go up,” said Garti.
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Even with tax credits and promises from Washington that the administration will twist some banking arms to loosen funds for distressed homeowners, Garti said the economic landscape is not conducive to the average homebuyer. “People are concerned that they may not have a job next month. Until we see some improvements in the job market, without the tax credit, I don”™t believe the housing market is going to recover next year. When it expires, and I see the job market picking up and unemployment rates going down, I”™ll feel much more optimistic.”
“The market is giving mixed messages,” said Mercurio. “Obviously, the Great Recession is affecting all of us as it has every other part of the country; we”™ll be fortunate if we end 2009 with perhaps 5,500 sales in the residential category. We were at more than 10,500 sales each year in 2004-2005, so this year, we are almost 50 percent below our peak.
“I”™ve been looking for reasons to see why the market would change in 2010, but I will reserve judgment,” he said.
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“Hopefully, the new Sunny Mae program will help improve the climate; mortgage rates appear to be staying stable, which is another plus. We are seeing a lot of foreclosure filings, but almost 90 percent of those end up as short sales, so it really has not impacted the market. Hopefully, we will not see the foreclosure rate go higher than it is, but we may not have peaked yet. The most worrisome factor is the unemployment rate ”“ officially, it is at 7 percent here in Westchester. That”™s a real concern here and all over the region.”
Ulster County Board of Realtors president Tim Sweeney said 2009 “was a mixed year” for his region.
“Over the last four months, we”™ve had more closings than we had at the same time last year,” Sweeney said. “Home prices did go up, but we also saw higher-end homes selling, so that has affected the median sales price. The home buyer”™s credit has been phenomenal. It”™s refreshing to see young families finally being able to afford to buy. Many are adding their closing costs to the financing.
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“When people start to feel more secure with their employment status, I think they”™ll start looking,” he said. “I think the market has corrected itself and I don”™t foresee it going down further than it has. One stumbling block has been obtaining jumbo mortgages; people need stellar credit and need to bring a significant amount of money to the table. That has slowed the mid-range market quite a bit. But I”™m optimistic about 2010 and think we”™ll see an increase in sales volume.”
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Greg Rand, managing partner of Better Homes & Gardens Rand Realty based in White Plains, believes the market for residential housing will be “stellar from now until July. Prices coming down are far and away the most important reason. The housing cycle is like a tide. Notwithstanding the unemployment rates, interest rates, and first-time homebuyer”™s credit, the price is what drives the cycle. The sellers have come down in price, so sales have warmed up. I believe that”™s what we”™ll continue to see in the coming year.”
Rand predicts 2010 will be “stronger in home sales, but homes will be bottoming out, and that effect will be profound. Despite the media hype, the market was not in a freefall. The whole real estate ”˜meltdown”™ was in reality 30 percent. Home prices don”™t go double in two years; that was unrealistic to begin with.
“But when the market bottoms out, the banks and lenders will be able to assess what those mortgages are really worth. If they have good property, they will foreclose on it. I predict a million foreclosures for 2010, but they will be gobbled up so quickly it will not have any impact on the overall housing industry.”
