Real Estate in the Finger Lakes of NY

By Barbara Blanchard, Licensed Broker Associate, GRI with RE/MAX In Motion

We are fortunate enought to live in an area with a stable economy spearheaded by Cornell University and Ithaca College. We never fell victim to the three primary causes that created the housing crisis.

1. Corporate builders saturated areas with thousands of new homes, primarily in states with low property taxes and heating bills.

2. Buyers came, along with the speculators. In some areas, houses doubled in value in a short period of time. Speculators purchased more homes with little cash out of pocket, hoping to cash in on inflated housing prices after holding the houses for a short period of time.

3. As prices rose at an unhealthy rate, many buyers couldn't afford to purchase homes using conventional mortgages. Instead of letting the market correct itself, banks came up with ways to loan people more money than they could afford, using tactics like negative amortization, adjustable mortgages with low starting rates, lowering credit standards, and raising debt to income ratios. They also gave risky loans to speculators. Many of these loans were sold to Fannie Mae and Freddie Mac, who used investors' money (pension funds, 401ks, mutual funds, foreign funds, etc) to purchase them. Builders kept building, speculators kept buying, driving housing prices up, until the market was oversaturated. The builders discounted their unsold houses, bringing down the price on others in the neighborhood: the speculators defaulted on their loans and many people with adjustable rate mortgages, that had reset at a much higher payment, lost their homes to the banks.  The banks discounted the houses, driving down prices in those areas causing housing values to drop significantly in those areas. Other people, who had nothing to do with the mess, couldn't sell their homes because they owed more than the adjusted value on their homes, causing more foreclosures. With all the non-performing loans, some banks lost money, as did the investors who purchased the mortgage backed securities.

In our area, real estate is a stable investment that allows us to enjoy a comfortable lifestyle with those we love. If you are thinking about buying or selling a home, just give me a call.

WASHINGTON, October 24, 2008

Existing-home sales increased last month as buyers responded to improved housing affordability conditions, according to the National Association of Realtors^®.

Existing-home sales - including single-family, townhomes, condominiums and co-ops - rose 5.5 percent to a seasonally adjusted annual rate¹ of 5.18 million units in September from a level of 4.91 million in August, and are 1.4 percent higher than the 5.11 million-unit pace in September 2007.

Lawrence Yun, NAR chief economist, said more markets are seeing year-over-year gains. "The sales turnaround which began in California several months ago is broadening now to Colorado, Kansas, Minnesota, Missouri and Rhode Island," he said. "The South was hampered by much lower home sales in Houston in the aftermath of Hurricane Ike."

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said low home prices and low interest rates have been attracting buyers. "This is the first time since November 2005 that home sales have been above year-ago levels," he said. "Credit tightened at the end of September, but the improvement demonstrates that buyers who've been on the sidelines want to get into the market to make a long-term investment in their future."

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 6.04 percent in September from 6.48 percent in August; the rate was 6.38 percent in September 2007.

Total housing inventory at the end of September fell 1.6 percent to 4.27 million existing homes available for sale, which represents a 9.9-month supply² at the current sales pace, down from a 10.6-month supply in August. This marks two consecutive monthly declines since inventories peaked in July.

The national median existing-home price³ for all housing types was $191,600 in September, down 9.0 percent from a year ago when the median was $210,500. "Compared to a fairly small share of foreclosures or short sales a year ago, distressed sales are currently 35 to 40 percent of transactions.

These are pulling the median price down because many are being sold at discounted prices," Yun explained. "The current market is not being dominated by speculative investors. Rather, 80 percent of current buyers are purchasing a primary residence, which is a bit higher than historic norms."

Single-family home sales increased 6.2 percent to a seasonally adjusted annual rate of 4.62 million in September from a pace of 4.35 million in August, and are 3.8 percent above the 4.45 million-unit level a year ago. The median existing single-family home price was $190,600 in September, which is 8.6 percent below September 2007.

Existing condominium and co-op sales were unchanged at a seasonally adjusted annual rate of 560,000 units in September, but are 15.7 percent below the 664,000-unit pace in September 2007. The median existing condo price⁴ was $199,400 in September, down 10.2 percent from a year ago.

Regionally, existing-home sales in the West jumped 16.8 percent to an annual rate of 1.25 million in September, and are 34.4 percent higher than September 2007. The median price in the West was $253,600, down 18.5 percent from a year ago.

In the Midwest, existing-home sales increased 4.4 percent to an annual pace of 1.19 million in September, but are 2.5 percent below a year ago. The median price in the Midwest was $152,500, which is 7.9 percent lower than September 2007.

Existing-home sales in the South rose 2.2 percent in September to a pace of 1.90 million but remain 7.8 percent below September 2007. The median price in the South was $167,200, down 4.1 percent from a year ago.

In the Northeast, existing-home sales slipped 1.2 percent to an annual pace of 840,000 in September, and are 7.7 percent lower than a year ago. The median price in the Northeast was $246,800, down 5.4 percent from September 2007.

The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

NOTE: References to performance in states or metro areas are from unpublished raw data used to analyze regional trends; please contact your local association of Realtors® for more information. ---

REMAX In Motion in Ithaca NY is a memeber of NAR.   REMAX National Housing Report link.

That is the challenge but what is the answer? Historically, in a confident marketplace when buyers want to buy a new home, they find it, and put in an offer.  Then put their home on the market. They price their home to sell and within 60 to 90 days everything complete and everyone is happy.

Currently in this market place this method is not working.  We have experienced a slow down of offers on properties during our normally active market time, and we now have increased inventory that directly effects value.  Buyers won't buy until they sell. They won't even put in an offer with a sale of home contingency.  Why not?  Don't know how or didn't know you could?  It's how you protect yourself from owning two homes?

 Bill Crane of CFCU stated today that the biggest challenge they have seen for their clients this year is not credit issues, or a lack of loans available but rather their clients have a home that needs to be sold first.  Their homes are either outside the Ithaca market place, or in town and they do not want to be caught with two mortgages. 

 A good Realtor knows how to write an offer with a sale of home contingency and protect their buyers.  A better Realtor knows how to get it accepted.  The best realtor will explain it to the seller, advocate for this contingency, will create a WIN/WIN for both the buyer and the seller and see it through to closing.  There are many aspects of this  contingency that need to be carefully examined and negotiated.  Ask questions, if it doesn't make sense ask again.

 Currently for October 2008 there have been 66 homes that have had an offer on them.  That's alot for Ocotber.  93 homes have made it to the "funding in place ready to close" status. That's great news.  However, there are only 5 homes in a sale of home status.  This could help everyone, if you are in this dilemma, and don't want to lose out on the opportunity to get the home you really want ask about this contigency.

To find out what it happening in your world of real estate ask a RE/MAX agent, we know our market and we can help you to know yours. 

Melissa Miller  Broker Owner

Warning:  (November 21, 2007) - RE/MAX is concerned about on-line consumer fraud. It has come to our attention that classified ads for rental properties featured on Craigslist have attempted to convince potential renters to pay rental deposits by incorrectly stating that a RE/MAX office would be facilitating the transaction.

Responding to email inquiries, the landlord says that she/he is out of the country and is working with a RE/MAX office in the country where she/he is located (in some versions of the scam, Greece) and has arranged for U.S.-based RE/MAX office to send keys and a lease. In return, the potential renter was asked to pay a deposit using an online payment service or to overnight a check to an address that was claimed to be a RE/MAX office. However, there was no RE/MAX office involved in any of these transactions. We are aware of a similar scam involving the web site rentalsestate.com.

If you encounter any online advertisements like this, please be very careful! You can check the name, address and contact information for any RE/MAX office or agent on remax.com using the "Find an Office" or "Find an Agent" features. In some cases, the scam has referred to the name of an actual RE/MAX agent, so please feel free to contact the appropriate RE/MAX office or agent directly, using the information on remax.com, to verify that the transaction is legitimate.

Click here for the link to remax.com information