Realtors sense a pulse in market
 
McMansions with all the bells and whistles ”“ from granite countertops to marble floors to pools that look like Esther Williams is visiting ”“ are gathering moss, say Realtors in the Hudson Valley region, and their futures could reside in multiple occupancy.
“It”™s a luxury to be able to afford the taxes,” said one Realtor.
Smaller homes are faring better.
Leah Caro, owner/broker for Bronxville-Ley Realty and president of the Westchester-Putnam Board of Realtors, said transactions are up and people are looking at homes in the median price range. “Things are picking up. Prices are down but they are stable; that”™s key. Financing is still tricky. Banks are making it tough; the pendulum has swung in the other direction. Appraisals are a problem. What should be terrific rates should be great, but eligible buyers are being put through hoops to get a mortgage.”
John Greenan, CEOÂ for Dutchess County”™s Association of Realtors, agrees. “Things have obviously been slow, but I”™ve been hearing good things from agents. The first-time home buyers”™ $8,000 tax credit is an incentive, although it does have restrictions. We are attracting people looking for those median-priced homes, $250,000-$350,000. As far as pricing, I think we are still going to see more of a decline before it levels off, but hopefully, activity will continue to improve.”
Both Caro and Greenan say agents are learning to develop relationships with banks that have found themselves owning properties they”™d rather have others own. They note banks are distributing properties to agents they feel are reputable enough to handle the listings.
Ann Garti, the CEO for the Orange County Board of Realtors who monitors activity for the west side of the Hudson in Orange and Rockland counties, says agents are seeing more bank-owned and short sales than she ever thought could possibly exist. “I would suspect that, given the current job market, if people do lose their jobs, many are overextended and will be forced to sell their homes. We”™re expecting to face those issues as time goes on.
“Banks themselves have raised the bar for who they will lend to or what kind of creditworthiness they want borrowers to have. It is hurting. I understand that in many cases, the bank was not the original lender, so we have all kinds of people who have to sign off on these homes. Frankly, it”™s a mess, and it is going to take a long time to get through this. We are seeing more contracts, but those have not translated into sales figures. We”™re not seeing the closings we need to see.”
Garti agrees that prices have stabilized, “which is a good thing. We”™re not seeing much of a fluctuation, so we”™re hopeful people will be more inclined to come out and stop waiting for prices to continue to go down. I don”™t think they are going to see that happen, especially in the mid-range-priced homes.”
Chris Scibelli, owner/broker of Keller Williams Realty in Central Valley, doesn”™t see recovery around the corner, at least not yet. “We”™ve had the busiest three months than we”™ve had in over a year. We closed a record amount of properties on the lower end. Foreclosures and short sales are less than 10 percent of the market, but it”™s a lot more than it”™s ever been, even though it is becoming a significant part of the business. Actually, the rental market is much busier than either the short sales or foreclosures.” Scibelli says the “magic number for a new home is $299,000” on the west side of the Hudson, a far cry from the $499,000 just three years ago.
Mark Boyland, president of Westchester-Putnam Multiple Listing Service, advises those on the brink of collapse to consider a short sale. “It allows the homeowner to leave with a lot less credit damage than a foreclosure will. From a legal standpoint, it is better for the bank and allows them to release the home. The homeowner can leave with dignity and save their credit; even get it back to where it was within a year or two and buy another house. It really is a win-win for both the bank and seller.”
Short sales and foreclosures, say real estate watchers, are relatively new to the region. Creative and risky mortgage loans were being churned out in Arizona, California and Florida before they caught on in the Northeast. While some areas of those states are starting to turn around, “We are only about two quarters into this down market,” said Boyland. “We are fairly new to this game. It is the ”˜second mortgage”™ folks who have been hit the hardest, and we are going to see it have an even bigger impact as time goes on. We have a lot to work through.”
Realtors agree that banks, who say they are ready to lend to qualified borrowers aren”™t necessarily willing to do loan modifications, no matter how good the credit score or payment history is for the potential borrower. In other parts of the country, banks have no choice ”“ those in areas have been decimated by the subprime implosion. For lenders in the Hudson Valley, they haven”™t had to push the envelope ”¦ yet.
“Banks in Westchester, Putnam and Dutchess are getting the milk for free. Why buy the cow?” said one disgusted Realtor. “I tried to get a loan modification myself, and I was told to stop paying my mortgage. How ridiculous can you get? Is that what it takes to get a bank to sit up and pay attention? Yet, that is what people who are trying to consolidate their first and second mortgages are being told to do, even if they”™ve never missed a payment in their life, have a good job and great credit history.”
In Westchester, the average luxury home is priced at $1.17Â million, said Caro, but those sales are stagnant. “Right now, we have 4,400 single-family homes on the market. It is not a glut of inventory here, but days on market have gotten longer. As far as luxury homes, many of the people who would have bought them two years ago are facing their own financial upheavals. They are just not moving.”
Scibelli and others say big homes ranging in size from 4,000 to 6,000 square feet outside of Westchester, are now becoming homes for extended families. “That”™s what”™s happening: Buyers got in, found out their taxes and the cost of maintaining a huge house is overwhelming, and they couldn”™t do it alone. If one person loses their job, it”™s chaos. So, I think we are also going to see a change in thinking on the part of both builders and buyers. McMansions will have a place, but I think we will see a trend toward more efficient housing. Perhaps those McMansions will become two-family homes or mother-daughter dwellings ”“ it”™s a seemingly sensible alternative to foreclosure and ruin.”
And while economists say prosperity is just around the corner ”“ the third quarter of 2009 could prove the tipping point ”“ Realtors don”™t agree. One market watcher said things will not “return to sense of normalcy until 2010 or later. When we see consumer confidence come back, we”™ll know better days are ahead.”