Long Island, Suffolk County Real Estate Market 2008

By knetter | Published: October 16, 2008

Hello fellow bloggers. My name is Martin Hepworth. I have been an active real estate broker for the last sixteen years. During that time I have witnessed the good, the bad, and the ugly. Fortunately for home buyers and sellers we are in transition from ugly to good.

For quite some time now I have been asked by my prospective buyers. “How much lower do you think housing prices will go?” An excellent question for sure. Consider this:

Since about 2005 the National and local real estate prices have been in a steady decline. If you took a sheet of paper with the upper left hand corner representing 2005 and the lower right hand corner represented January of 2008 you could draw a diagonal line from upper left to lower right. That would be a fair representation of the decline in real estate values for that time period. Depending where you are in the country that diagonal line could represent a 12% to over 50% decline in real estate value. The average Suffolk County adjustment is approximately 15%. 

I will confine my opinion to Suffolk County. Let’s take another piece of paper and let the left side of our paper represent January 2008 and the right side represent October 2008. The line would be fairly straight across the page with ever so slight variations in amplitude. Very much like a very low frequency sine wave.  

I think I can answer the question “how much lower do you think housing prices will go?”
We have arrived at the last stop on the train to lower home values. Most analysts are in agreement that if this isn’t the bottom we can surely see bottom from here.

If you are employed for more than two years in a trade or profession that is stable, BUY NOW. DO NOT WAIT. Follow Jim Kramer’s advise, “YOU MUST BUY A HOME IN THE NEXT SIX MONTHS” His sentiments are echoed by Suze Orman both well respected financial analysts. Why should I buy now? Mortgage interest rates are again at historic lows. Home prices are down about 15%. You could choose to roll the dice to see if home prices will start dropping again. That is always a possibility; however mortgage interest rates could also rise. A quick rule of thumb is 1% change in mortgage interest rate is equal to about 10% change in home value. In my research I couldn’t find anyone who thinks there is another 10 % left on the down side. There is however the possibility of mortgage interest rates rearing their ugly head back up to the 7% or 8 % ranges. When you do decide to purchase a home remember this, A HOME IS SHELTER, IT IS NOT AN INVESTMENT.

Written by: Martin Hepworth, Licensed Associate Broker

Netter Real Estate

(631) 661-5100

mhepworth@netterrealestate.com

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One Comment

  1. Real Estate Agent
    Posted October 17, 2008 at 2:22 pm | Permalink

    Totally agree that now is the best time to buy, and that’s not just some “Pro-Realtor” fluff statement. There are going to be a lot of buyers who are thinking about it now, and then wait. When values and mortgage rates go back up, they will be wishing they had acted now. No one should be afraid to buy in today’s market.

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    James A. Netter established Netter Real Estate over thirty years ago after working with and being trained by his father. He is a member of the National Association of Realtors, the N.Y. State Association of Realtors, and the Long Island Board of Realtors. He has been on the Board of Directors for both the Long Island Board of Realtors and the Multiple Listing Service Read More...

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