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I have friends that have been selling Real Estate for a decade or more and these friends have temporarily gotten out of the market to persue other careers until Real Estate gets Real again. They say they don't have it in them to look a potential buyer in the eyes and flat out lie to them just to make money. They don't want to be responsible for families falling into poverty as a result of their misleading advice. I am not at all against owning a house, in fact I believe that it is one of the greatest things you can achive, but buying a house at a ridiculous price, using a ridiculous financing is not owning a house!
Ok, it's no longer a secret anymore; real estate prices are falling. The realtors however, will try to convince you that we are at a bottom when we are no ways near a bottom; don't buy into the hype! David Lereah who stepped down as chairman of the National Association of Realtors as of May 19th has been calling a bottom for more than 6 months; in his last commentary, he says he can no longer spin the numbers and that we are in a housing recession. You won't hear much about the Long Island market specifically because the local media doesn't want you to know this. Politicians are scared and you should be too! The only thing guaranteed to keep going up here on Long Island is your property taxes. Be a spectator, not a speculator! Don't buy into a collapsing market!! Bookmark this site
Want to help? What can you do? There are many things you can do.
You can help by spreading the word about how Real Estate on Long Island is overvalued.
Send some traffic over to this site (pass around a link to this site).
Create your own site (more sites specific to Long Island would be great).
Send me any articles regarding the Long Island Real Estate market (I can't find them all).
The most dangerous terrorists are right here in the U.S.
Denver's 2006 real estate foreclosure rate is now officially the worst on record. With one month left in the year, foreclosures have already eclipsed the record set during the 1988 oil industry collapse that sent Colorado's economy into a tailspin.Denver's spiraling market should serve as a warning to the rest of the country, according to experts.
Right now you are standing on the tracks with your back to the train that is coming at you with full force and I'm trying desperately to yell out to you "GET OFF THE TRACKS!!!!!!!!!!!!!!"..... Whether you choose to listen to me or not is out of my hands..... god be with you.
More and more Long Islanders are finding themselves in the same financial squeeze as the Virgas - unable to keep up with their mortgage payments. A Newsday analysis of recent foreclosure data shows that the total number of Long Island homeowners who received new legal notices of foreclosure, called lis pendens, rose 75 percent during the past two years.
"I think what we're seeing now is really the tip of a spreading iceberg," said Pearl Kamer, the chief economist of the Long Island Association, the region's leading business group. "And it's going to affect more than the lowest-income neighborhoods on Long Island. It's going to be a middle-class phenomenon too."
Foreclosure USA Up to 4 percent of America's mortgaged homeowners might lose their homes to foreclosure in coming months, one of the nation's largest lenders predicted recently, as those homeowners find themselves trapped by heavy debt and the housing slump.
What can we do to stop Foreclosure USA? Will electing Democraps do it? I doubt it. We the people must take back our ownership of our democracy. With too little political choice, our votes will not do the job. Our money is more powerful. We must politicize consumer spending. We must have some radical, dissent-driven leadership from true progressives to send signals to the tens of millions of disgruntled Americans to cut their discretionary spending to achieve specific political reforms.
Money and greed have ruined our country. Money and citizen re-engagement can save it.
Many are coastal cities and Boston heads the list with what the organization predicts is a 55.3 percent chance for price declines. Long Island and four cities in California are the next highest risk areas on the company's list.
Some experts believe that a national housing bubble exists. Most economists don't perceive a national bubble, but agree that some local markets could pop. The most frequently mentioned markets include San Diego; Orange County, Calif.; Los Angeles; Las Vegas; Boston; New York City and Long Island; the District of Columbia; and South Florida, from West Palm Beach to Miami.
Tens of millions of families bought homes at bubble inflated prices and now face the prospect of seeing their life savings disappear in the housing crash. We may not be able to get these people's money back, but we should at least be clear on who sent them down the wrong path. Hopefully, the economists, bankers, realtors and other bubble proponents will not be in a position to wreck economic havoc yet again.
Years ago as I have witnessed the housing market rising far past the fundamentals, I knew it had to crash but wasn't certain as to how soon it would be so I kept my mouth shut; now that we are so close like I can see the lights on the train approaching, I feel it is my duty to try my best to prevent anyone I can from making the biggest financial mistake of their life. To do nothing about it is like watching a deadly accident in slow motion and not doing a thing to stop it!
Imagine going to the bank and asking, "I'd like to open an account for minus (-)$100K". After years of deposits adding up to $100K you will have $0 in the account. Silly isn't it? Well that is exactly what you will be doing if you bought a house right now. Maybe a little more, or a little less, but either way doesn't sound too good does it?
The Local Media Is Lying To You
Don't believe what Newsday is preaching in their Real Estate section, that part of the Newsday is owned by the Real Estate industry which will pay any price to lead you to believe that the market is still booming just to keep the market going a little longer so they make more money at YOUR expense. Don't be fooled by their charts that show a slight uptick in the median. The median is not a good measure of the market because all it takes is a few rich people to buy high end houses in the multi-million dollar range (think hamptons) and that will cause the median to rise even though no one or very few are buying an average house and at a reduction in price. The fact is that there are bigger price cuts right now in the higher end houses and when people buy these, it does wonders for the median!
The same goes for local video news feeds such as NEWS12. They will convince you that there is going to be a soft landing and that all is well. Look for information about Real Estate online, there are many articles explaining in black and white exactly what is going on, I have provided a couple of links to where you can find such information below. When it comes to Real Estate, you should not trust anyone who works in the industry as far as your personal finances go. They will make you believe it's a good deal or that it's better than throwing your money away on rent, but the fact is that these people are not your friends, but they will certainly make you feel like they are until they get their commission.
There is some reliable information out there on the web, but you have to search for it; any new information I come across you will find at the top of this page which I will continue to update whenever I can. The local news will not let you know the full true story about what is happening in the real world. If they're not telling you the full story than they are actually lying to you, don't trust them.
Remember when they used to say "They're not making any more of it" and that there will always be demand, well it's true, they aren't making any more of it and that's a good thing since they already have too much of it! Where is the demand now? Inventories are rising, not only here but in almost every state in this country. Georgia is now having their inventories rise, over there houses are 1/4 the price of what they are here right now, so why are the inventories rising? Because people who live here have been selling their houses for such obscene amounts of money and buying in places like Georgia, some outright with their equity. Now they are having problems selling their house, are stuck with 2 mortgages and eventually foreclose. You can see that the mini-storeage market is booming due to foreclosures. The sellers are starting to become very desperate to find a buyer. Why would you want to pay their ridiculous prices when you don't have to?
Then there are the speculators(flippers) who bought several houses and held them so they can turn them over to someone like you to reap big profits, but now they are dumping those properties and cutting their loses because the market turned. These speculators are the main reason why the prices are so out of wack! Now they are getting the punishment they deserve! Don't buy because you will be saving them and taking the punishment yourself!
The Long Island Real Estate section is claiming that 20 somethings are now buying Real Estate; it may be true that there are some buying, although most (smart ones) are leaving Long Island in search of cheaper areas to live. I read in the Newsday section that some of these folks that are buying here on Long Island are using creative financing to buy; this is upsetting to me because they are being tricked into thinking they will be able to afford it when they most certainly will soon be bankrupt. Don't let anyone tell you differently, these loan products are bad news! You can buy eventually in the next year or two when you will see significant drops!
Don't let a seller fool you by telling you that their house is 10%, 20% below market. That is just a marketing strategy that will rope some uneducated, gullible buyers. This kind of logic is silly! If the house were truly at market value, it would sell! Period! Why would they need to discount it from what people ARE willing to pay for it? (sarcasm again) Maybe they have enough money and they are really generous and would rather get less from you? Prices in 2005 are completely artificial and discounting from those comps is meaningless. Just a year ago, sellers were adding $100K to the comp value and people unknowingly actually paid that price or close to it. These people are suffering now and are finding that they can no longer afford to make payments on their mortgages so they are trying desperately to get back as much as they can before they foreclose. Don't let them use you to save their own necks because of their own stupidity. Stay out of this market! You will be happy you did! Most people who are buying are using these toxic loans with no money down, this will guarantee that the prices they pay will not hold. Do you want to put your hard earned money down on a house that will fall in price? Some of these people will walk away from their house when the price drops and lose nothing but their credit rating(if they really had any to begin with), while you on the other hand will lose that and the money you put down. Actually, according to the new tax laws, any money that your are forgiven when you file for bankruptcy, you will be 1099'ed for by your friends at the IRS. These loans that are out there with their lax lending standards have turned buying a house into a very dangerous game! Do not play this game, because you will lose! Buying into this would be like being robbed at gunpoint for just a dollar and risking your life to avoid paying that dollar!
The Truth Of The Matter
This madness has been going on for so long because people don't research things themselves, they depend on Realtors (so called professionals) that aren't going to cater to their best interests. I don't care if they are a buyers agent, they get a percentage of the commission which means if you pay more, they get more, understand? If there were actually agents out there that told the truth about Real Estate, the prices would never have gotten as high as they have, but than again, the agent wouldn't sell anything and would lose their job. I am here because I have nothing to gain by telling you the truth and my only loss is the time I spend maintaining this site. I feel that someone needs to step in and set people straight since everyone out there has their hands out for YOUR money. The information is all over the internet, but many people it seems either don't have internet access or they just don't know where to look and like I said, local news sources will side step what is happening. Agents are finally admitting that prices are dropping because they can no longer hide it, but they aren't admitting that they will continue to fall. They will say that it's turning into a normal market. It never ceases to amaze me what they will say next just to make money. Ask the realtor to put a contingency into your contract that if the value of the house you buy falls more than 30%, they will pay you the difference and you'll see how quickly they believe their own words!
If you buy now, you will be very, very disappointed! I can't predict the future, but sometimes things are just written on the wall. I would advise on waiting, but if you absolutely must buy now, make sure you lowball and all I could say is that if you can't buy with 20% down, 30 (not 40 or 50) year fixed rate mortgage, you simply should not be buying! Move if you have to, but DO NOT BUY USING A NON-CONVENTIONAL LOAN! Anyone trying to convince you to use an adjustable rate mortgage, negative amortization mortgage or any of the others is not looking out for your best interest, these people are dangerous, stay away from them! They are the ones who are advertising 1.25%. Sure, they can get you a loan for that amount, but what they don't tell you is that after a year or two, the loan will adjust and your payments will increase 150% or more and you will not be able to handle the payments. Your only salvation at that point is to sell and in this market that is already sliding, you will not be able to even break even. You will have no choice but to foreclose, lose everything you had put into it and destroy your credit! In other words, if you want to hang yourself, these people will be happy to provide the rope!
Long Island is overpopulated right now and it's only going to get worse years from now! The taxes are ridiculously high and they will continue to go higher. When your children get old enough, they certainly will not be able to live here so they will move away. Your choice is this, either live near your brothers, sisters, mother and father now and live far away from your children later or live far from your brothers, sisters, mother and father now (you can always visit!) and always live near your children! Your parents will eventually want to retire and they won't be able to afford the high cost of living here on Long Island and so they will need to move. I'm sure they would like to live closer to their grand children so they will move closer to you. Long Island also has many health issues that are usually hidden from the media.
On a side note, I have driven to the Georgia suburbs looking at all the houses they have built there and to visit some of my friends that have moved there, in fact one of them let my family stay there in their huge guest room. I was shocked by the much higher standard of living over there. I remember one of my friends who bought an existing house here on Long Island around 2001. He told me his roof was leaking and he was trying to put off having the roof redone as long as he can due to the expense, but there is only so many buckets you can put down to catch the drops when it rains! Meanwhile, the friends that I stayed with bought a brand new house in the low $200's which included all brand new appliances. He does not make alot of money, but choosing to live here instead of Long Island, he was able to afford a big screen TV and have someone come to cut his lawn (something which my roof-leaking friend wouldn't dare do and he is a well paid manager at his company!). Since it very rarely snows over there in GA, he will not have to be stuck shoveling snow in the winter time and because there aren't any trees in the immediate area, there will not be many leaves to rake in the fall. My friend in Georgia is friends with all his neighbors; I met them myself, really nice people! It seems the people over there are so much nicer than they are here on Long Island....probably because people over here are so stressed out by the way they have to live! There are no illegal apartments there because it is too affordable for anyone to want to rent there. The traffic there (in suburbia) is not any way near what it is like here on Long Island, I actually left there to drive back home(on Long Island) during their rush hour just to see what it would be like. It's like night and day if you compare to Long Island, no wonder anyone who leaves Long Island never regrets the move....but this is just Georgia, I have other friends that have moved to places like North Carolina who say they would never go back to Long Island. So why am I still here on Long Island? I am still deciding exactly where and when I want to move and that will be probably in the beginning of next year. Although houses in places like Georgia are cheaper (I shouldn't say cheaper, there are multi-million dollar McMansions over there that are bigger than any of the houses I have seen here on Long Island! Some are bigger than 15000 sf) or shall I say give you much more for your money, the prices are still a bit higher than they should be due to high demand and in a year or two they will come down a bit due to oversupply; in the meantime, my wife and I will relocate and rent which will allow us more time to research the areas and decide where we ultimately want to live and to avoid overpaying.
Why it's for sale: Daniella Belleza, 41, had expected to return to her job as a speech pathologist after an extended maternity leave but discovered she loved being home with her two boys, Mason, 4, and Logan, 3. She and her husband, Rouel, 35, fell in love with Georgia while on vacation there. They decided to move there because the lower cost of living meant Daniella could continue to stay home. [not to mention the much nicer house they will get at a MUCH lower price along with a fraction of the taxes!] asking $549kpaid $273k for it in 2001
Hector Rodriguez sits in his nearly empty home in Hicksville longing for his wife, Annalucya, and 4-year-old son, Daniel.
They have been separated since the spring, when Annalucya and Daniel moved into the family's new home in Atlanta.
Rodriguez says the idea of relocating his family to Atlanta was hard to resist. After visiting a friend in the area over a year ago, he fell in love with the location and the larger home he could buy for his money. He says Atlanta seemed like a great new opportunity for his family. [ Moving to Atlanta is a smart move, but not selling your house first is a dumb move! ]
"Everyone said I could sell the house in two to three months," says Rodriguez, who, thinking it would be better to show the Cape Cod empty to buyers, went ahead and shipped all the family's furniture to Georgia, except for a bed to sleep on. He says visits to Atlanta are few and far between.
Why it's for sale: Rachel Abraham, 37, a stay-at-home mother, says she and her husband, David, 36, who runs the mutual fund department at UBS in New Jersey, have been shopping for a "way-of-life change." The family visited North Carolina and fell in love with [ THE MUCH BETTER PRICES AND LOWER TAXES ] it - so much so that Rachel's parents and her sister's family also will be moving there.[We'll all buy brand new houses down there for less than half of what we think someone will be stupid enough to pay for our houses here!].
"My house is very, very spacious [nothing compared to NC though]. We've done everything ... new bathroom, beautifully decorated, playroom in the basement. ... I'll miss my brand-new bathroom [...NOT]"[Obviously they did all these brand new improvements just to make the house more attractive to a buyer].asking $615kpaid $472k for it in 2004 and they want to sell already?
Why it's for sale: Bubb, a 48-year-old auto-repair shop owner, says he is the only member of his family still on Long Island; his relatives have relocated to Florida. He says he is tired of the cold and is ready to join them. He plans to open a franchise restaurant with his brother. [ Could you really blame this guy? ] asking $605kpaid $285k for it in 2000
"I have three little kids," says Gonzalez, whose house is in the Elwood school district. "How long can you roll the dice and say, 'One more deployment?'" He is leaving to become a campus state police officer at North Carolina State University. [Good ole North Carolina] asking $700kpaid $172k for it in 1999
Why it's for sale: Bill Finkernagel, a 54-year-old construction supervisor, is retiring. He and wife, Susan, 52, who works in shipping and receiving, want to move to a warmer climate. They're considering Puerto Rico, the Dominican Republic or Florida. [Nice plan, Buy it with bubble bucks sell it for double 3 years later and live like a king down south]. asking $800kpaid $450k in 2004
Why it's for sale: David Melhado, 42, a vice president for an advertising agency, says he and his family want a different quality of life and warmer weather. He and his wife, Jeanne, 40, a stay-at-home-mother to Ashley, 14, and Samuel, 6, will build a new home in Wake Forest, N.C. [Not to mention the much nicer houses for mud cheap and a fraction of the taxes]. asking $450kpaid $138 for it in 1992
Why it's for sale: Murtha, a 70-year-old retired flight attendant, says she wants to be closer to her daughter and three grandchildren, who moved to North Carolina last year. [First the daughter found a beautiful house there and now the Mother follows, very smart people!]. asking $365K she bought this house many years ago so she has plenty of room to cut her price.
Why it's for sale: The Bessos' daughter, Rachel Abraham, sold her house after it was featured last year in this column. She and her family are moving to North Carolina. Michael Besso, 67, a retail merchandising associate and former restaurant owner, and his wife, Marcia, 62, a supervisor for a health charity, hope to follow [If she can find a sucker to buy her house as well]. asking $420k, no price history available for this house but according to Newsday:
Recent sale on the block:10 Arden Lane sold for $429,000 in May 2006
Why it's for sale: Susan Harvey, 49, a retired retail associate, says her mother, brother, daughter, aunts and cousins all live in Florida. She and her husband, Edward, 63, a retired operating engineer, want to join them. asking $470k, sure, take the money and run if you can. Note that in 1998, not a single house on the block sold for more than $178k.
Thinking of retiring and want a better life. Many retirees are moving to Panama. Just 2 hours south of Florida; Very cheap living in paradise. Watch the video.
The Long Island Housing Bubble
The Real Estate Bubble has burst about a year ago, but it hasn't fully hit the media just yet. The credit bubble that was feeding it has popped; you will start to see those no money down deals disappear along with the toxic loans and lax lending standards. This will cut everyone's ability to get these $500K loans that they really can't afford in the first place. If people can no longer get these loans, the prices will fall significantly. This massive bubble while it is a national problem, it is concentrated along the coasts. Long Island is one of the areas that falls into this category and if you are thinking of buying, you had better think again. You may hear some people say that the prices will drop modestly in their area and then continue to appreciate because they are in denial and they don't want to believe it, but that is just wishful thinking and is not going to happen. The crash is underway and will continue for several years, but in about one or two years will be a prime time to buy a foreclosure... There will be many of them to choose from. I do believe that the bottom of this market will not be for many years so if you feel the need to buy just a couple of years from now, go to your local bank and ask them for a list of their properties, they will be glad to get rid of them at a loss.
This Real Estate market is going to guarantee a recession. Buying a house before a recession is a very, very, bad idea and the fact that house prices are already falling right now makes it even a worse idea!
Inventories will continue to rise as more people find they can no longer make their monthly mortgage payment due to the ARM or other toxic loan they got suckered into and are forced to sell in a down market. The so called Real Estate Professionals such as David Lereah claim that the market has hit bottom and that next spring the market will rebound. David Lereah has been back pedaling optimism from the first time the market started showing signs of weakness. He lost all his credibility, I would be amazed if there were anyone who still listens to what he says.
Pain And Fear
Pain and Fear are your best friends. God gave you these when you were born to protect you. When you touch something red hot, the pain causes you to pull your hand away and save your hand; without that pain, your hand would just burn up until there is nothing left but a stub. When you're crossing a street and a big truck is coming, that fear is what causes you to go back to the sidewalk; without that fear, you will be splattered in the street. When I was younger, I heard about a kid in school who did some drugs, drank some alcohol and fell asleep on a radiator (it was a cold winter), in the morning he had been burned so badly that he took his own life while in the hospital. It was drugs and alcohol that took away his Pain, the one thing that would have prevented this and probably kept him alive today. People hear stories here and there about how the housing market is going to crash and if you buy in you will lose alot of money. This is fear, but if you talk to a Real Estate agent, they will take this fear away from you by telling you something like, "The market is softening, but if you plan to live in the house 10 years or more, your house will be worth so much more" or "Renting is throwing your money away, with a house you will build equity". They want to turn you into a fearless buyer, kind of like telling you that the train coming at you is just an illusion and you should stay on the tracks. If you foolishly ignore the fear and listen to them, the pain you will receive from seeing your house depreciate will hopefully remind you to listen to your own fears. Yes Pain and Fear are your best friends, thank God for them and DON'T LET ANYONE take them away from you!.
Here is a trick realtors will play on you:
They will take you to a house that is already set to go to contract and lead you on to believe that it is still for sale; this also covers them in case it falls through (which is very common these days) . When they show it to you, if you like it they will play some games with you. After you make an offer on it, they will tell you the offer was rejected and ask you for a higher bid; after you have reached your limit, they will tell you the owner sold it to someone else for a higher bid. They do this to stimulate the fear of losing a house so that you will be quicker to bid higher when they show you a house that is really for sale. Buying a house is an emotional driven process and these realtors will use scare tactics to get you to offer alot more than you would have otherwise; this is why you should not use a buyer's agent.
Some Useful Links:
www.ronpaul2008.com Ron Paul is the only Presidential candidate that wants to do something about the Governments debasing of our currency. Our currency shouldn't be perishable like food; its purchasing power should be preserved so people could learn to save instead of becoming a slave to debt. Just the fact that he wants to do away with our income tax system already justifies the reason for voting him in
Some good web sites for bubble information:
www.patrick.net This is a great site that has been around a very long time. He used to charge you for up to date news articles, but not anymore. If you want to blog with other people who are awaiting the crash and want to learn more, you won't find a better blog.
www.ml-implode.com As you know the subprime lenders are all dropping like flies due to a swarm of loans going bad and lenders being forced to buy back loans that they don't have the capital for; Here you can get up to date information on how many lenders have gone under as well as what the company names are and their significance in the lending industry.
www.longislandindex.org If you live here on Long Island and plan on staying, you need to read EVERYTHING on this site. You WON"T get this information from local news sources such as Newsday. It is vital information that every Long Islander should know; it's not only about housing, but about our schools, our environment, our healthcare, our utilities, our government and where our local economy is going.
www.rgemonitor.com Roubini's Global Economic Monitor - Tons of research on the economy all over the world. Probably the best economics web site I have ever seen.
www.cepr.net Center for Economic Policy Research - Dean Baker's economics web site; lots of articles on the housing bubble from an Economist who's predictions have been coming true, just quite a bit later.
www.europac.net Euro-Pacific Capitol - Peter Schiffs' official web site. Alot of good information regarding global investing, the falling dollar and crashing housing market. Peter Schiff has all his video archives here; very entertaining to watch! He also does a radio show once a week; every wednesday at 8:00 pm eastern which is also archived.
www.itulip.com Eric Janszen's economics predictions site; lots of information on our fragile economy.
www.cagw.org Citizen's Against Government Waste; this site is run by a group of individuals who are fighting the wasteful government spending. Find out how you can become part of it all. Got any dirt on local politicians and want to do something about it? Give these guys a holler; they're like your own personal mafia against politicians.
www.realestatedecline.com Excellent source of articles about the crash from all over the Country. If you want to take a drink from a firehose of information, you will find it here. This site is updated daily!
www.economyincrisis.org This is a great site for information on our national economy with statistics that will shock you. Find out how much of our country is owned by foreigners and how little we produce!
www.naphb.com This site provides a way to bypass the realtors and their fees for real estate transactions. Of course I still do not recommend buying right now but if you are selling, this might be a good alternative.
www.doctorhousingbubble.com Here's a site that started out as a California housing bubble blog and pretty much turned into a national site. Dr. Housing Bubble has written some very informative articles pertaining to the current housing conditions in all bubble areas. I highly recommend you check out this site.
www.mises.org The best austrian economics site that follows the principles of Ludwig Von Mises; the greatest economist that ever lived.
Some good blogs for bubble information and feedback:
nychousingbubble.blogspot.com A nice little blog specifically for the New York City area and it is run by an investment banker.
www.housingdoom.com Here is a great housing bubble blog covering mostly the west coast however it also covers the national housing crisis. Alot of interesting charts, graphs and up to date info.
calculatedrisk.blogspot.com A well put together blog for finance and economics. Good coverage on the mortgage meltdown and the housing bubble.
As housing bubble collapses, developers and sellers cut prices, await deals and pray for a rally in '07 (Not going to happen) - Newsday [This article is no longer available. I suspect that Newsday was told by the N.A.R. to remove it from their site because it scared away buyers; I noticed it wasn't up very long, but if you are interested, you can go to your local library, and you will be able to pull it up on their computers; I may do this myself if I get the time. I am leaving the dead link here because the title pretty much says it all.]
If there isn't enough proof presented here to keep you from buying, than go ahead and buy! We actually do need people to buy in order for bad numbers to show and selling prices to drop. You can consider yourselves, the brake pads of the housing market.
Why am I doing this? If I can save at least one family from making a big financial mistake which can seriously hurt them and probably destroy their marriage in the process, I consider that the greatest reward for my time spent providing this information! From some of the emails I have been receiving, I feel I have accomplished this. Many of them are hate mail from Realtors, but there are several others who praise me for this, I thank you all!
Please bookmark this site and come back from time to time as I am always adding more material. Those 2 scrolling windows at the top of this site will navigate to all areas on this site as well as to current News articles that are relevent to the Long Island housing bubble.
Baldwin, Bellmore, Bohemia, Cedarhurst, East Rockaway, Elmont, Franklin Square, Freeport, Garden City, Hauppauge, Hewlett, Islandia, Levittown, Lynbrook, Manorville, Medford, Merrick, Middle Island, New Hyde Park, Oceanside, Rockville Centre, Shirley, Uniondale, Valley Stream, Hempstead, Great Neck, Manhasset, Port Washington, Saddle Rock, Sands Point, Smithtown, Oyster Bay, Bayville, Bethpage, Hicksville, Massapequa, Plainview, Syosset, Woodbury, Amityville, Babylon, Lindenhurst, Bay Port, Bay Shore, Islip, Oakdale, Ocean Beach, Sayville, West Islip, N Huntington region Asharoken, Centerport, Cold Spring Hill, Cold Spring Hrbr, Commack, Dix Hills, E. Northport, Eatons Neck, Fort Salonga, Greenlawn, Huntington, Huntington Bay, Huntington Sta, Lloyd Harbor, Lloyd Neck, Melville, Northport, S. Huntington, West Hills, S Huntington region Bay Shore, Brentwood, Commack, Deer Park, Dix Hills, Huntington Sta, Melville, N. Babylon, S. Huntington, W. Bay Shore, Wheatley Heights, Wyandanch, Smithtown region Asharoken, Commack, E. Northport, Eatons Neck, Fort Salonga, Hauppauge, Head Of Harbor, Kings Park, Lake Grove, Nesconset, Nissequogue, Northport, Smithtown, St. James, Stony Brook, Babylon region Amity Harbor, Amityville, Babylon, Bay Shore, Copiague, Deer Park, E. Farmingdale, Farmingdale, Lindenhurst, Melville, N. Amityville, N. Babylon, N. Lindenhurst, Oak Beach, W. Babylon, W. Gilgo Beach, West Islip, Wheatley Heights, Wyandanch, Islip region Bay Shore, Bohemia, Brentwood, Brightwaters, Central Islip, Commack, East Islip, Hauppauge, Islandia, Islip, Islip Terrace, Lake Ronkonkoma, N. Great River, Oakdale, Ronkonkoma, W. Bay Shore, West Islip, NW Brookhaven region Belle Terre, Centereach, Coram, E. Setauket, Farmingville, Head Of Harbor, Lake Grove, Middle Island, Miller Place, Mt. Sinai, Nissequogue, Old Field, Poquot, Poquott, Port Jefferson, Pt.jefferson Sta, Rocky Point, S. Setauket, Selden, Setauket, Sound Beach, St. James, Stony Brook, SW Brookhaven region Bayport, Bexidon, Blue Point, Bohemia, Cherry Grove, E. Patchogue, East Islip, Farmingville, Great River, Holbrook, Holtsville, Islip Terrace, Lake Ronkonkoma, N. Patchogue, Oakdale, Patchogue, Ronkonkoma, Sayville, W. Sayville
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Subprime mortgages are a big problem as these are the first loans to end up in foreclosure. Normally, subprime loans are for people who don't have good credit, but nowadays it is because it's the only way they can get financing on a house that is priced well above what they can get normal financing for. Alot of these people have good credit and good income, but they wind up falling into the subprime market anyway. There are some households here on Long Island that bring in over $200k and still had to get a subprime loan because they bought a $500k house at an $800k price and couldn't come up with a 20% down payment, so they get a second (piggyback) loan which is in itself subprime just to avoid PMI. So how many loans are subprime here on Long Island and where you ask? Take a look at this subprime map that is color coded to show you where the bulk of them are, these are loans that were written in 2004, there isn't any data yet available for 2005 and 2006, but I'm sure based on articles that I keep reading that it is higher or at the bare minimum, the same. Don't think that if your mortgage isn't subprime that you are safe from a crash. If your neighbor has a subprime loan and his house goes into foreclosure, your house will lose value as a result. Remember, it is the subprime people who bought into your neighborhood at those high prices that caused the price of your house to go up and when they foreclose, it will cause the price of your house to go back down.
You may be safe from the crash providing that you:
Haven't bought a house in the past few years (except for the rich who can afford to take the loss).
Haven't drawn equity from your house (many have used equity to pay off credit cards only to ring them back up).
Haven't taken out a non-traditional loan (especially the no-money down crowd).
Have a job that can withstand a housing recession.
Have a good amount of money in the bank in case you lose a job (A recession is coming).
If you are selling, the best advice I can give you is to cut the price now, and not by a measly 5%. If you do this, you will follow the market down as your house will just sit and by the time you realize you need to cut the price, you will have to cut it alot more than you originally planned. It is those who cut their price last that will wind up cutting their price the most and therefore sell for less than they could have gotten. If you want to keep your houses for at least another decade and you have the financial capability to be able to, than by all means keep it!
This is a selection of News that I feel is relevant to Long Island. Although some of it applies to other areas, the principles are still relevant. There are many other articles out there, some websites put up a dozen or so a day, but I find that alot of these articles repeat the same News and therefore are redundant. I try to find as many interesting articles as I can that are about Long Island, but there aren't much out there. If you have some News you would like to share or have suggestions, please don't hesitate to contact me. Email address is at the bottom of this page.
David Liareah
Shoulda, Coulda, Woulda
"There is a person in my family that was working in the mortgage industry for about 5 years. She got preggo & married a guy she worked with. They bought a very average house in a desirable area with $$$ taxes at the height of the market & they were under pressure because she was very pregnant. Her DH is not from LI & is horrified at what they pay to live here. She has never lived anywhere else & her DH tells her she lives in a bubble. She has been complaining that although her DH is a great salesman, lately he can't close any of the deals on his desk because the banks won't write them. She doesn't work since having the baby. So they just came back from a trip to N.C. & TN.
Low & behold she can't believe what 300k can buy down there. They are thinking of moving.
Problem is there are at least ten homes for sale in their tiny neighborhood, most of them have been listed for 6 months plus. Some of them are much bigger/newer/better but all are listed at 60k-100k less then what she paid & they still aren't selling. Oh and they have an 100% financed IO, and they have started paying down principle yet."
[Pressure to buy because she was pregnant? Has anyone ever heard of a technology called renting? This is what happens to you when you make very big expensive decisions based on very small matters.] - LIBubble
In a sign of how volatile stock markets have become, five of Long Island's publicly traded companies have been notified that they may be delisted from the Nasdaq exchange for failing to maintain certain minimum listing requirements.
But recognizing the havoc the volatility has wreaked, the Nasdaq has suspended for three months its enforcement of two minimum listing requirements - that a company maintain a bid price of at least $1 and that it maintain a certain market value. The value depends on the company's size.
The last time the Nasdaq suspended such enforcement came in the wake of the Sept. 11 terrorist attacks.
The exchange has listed about 200 companies - including the five on Long Island - that have fallen below minimum requirements. Nasdaq said it will not move against any of them until the three-month period expires on Jan 19. They must be up to minimum requirements by then or could be delisted, the Nasdaq said.
A moving crew packs up an apartment of a client who chose to look for jobs abroad while the job market shrinks in New York.
The economic downturn continues to hammer the Long Island job market, with increasing numbers of sectors showing losses, according to the latest data released yesterday by the New York State Labor Department.
The Island's private-sector job market grew by just 0.1 percent, or 800 jobs, in the 12 months ended in September, compared with a year ago, the department reported. By contrast, the economy added 11,800 jobs in the 12 months ended in January 2008.
Former job leaders such as financial activities, and professional and business services continued to bleed jobs, the report shows. And the construction category lost jobs for the first time since 2005.
"We could really say that private-sector growth has ground to a halt," said Pearl Kamer, chief economist for the Long Island Association. "It's really across the board."
New York City's private-sector job market also continued to show weak growth, rising 0.6 percent, or 20,100 jobs. Unemployment climbed to 5.7 percent, from 5 percent a year ago. The Island's jobless rate held steady at 5.2 percent, compared with August, but is up from 3.9 percent a year ago.
Kamer predicts that Long Island will soon show overall negative jobs numbers as federal statistics have for months.
The nation's credit crunch, dipping revenue and skyrocketing costs have left their mark on Long Island's towns, as they struggle to bridge sometimes large financial shortfalls in their 2009 budget plans during these lean economic times.
With nearly all of Long Island's 13 towns falling millions of dollars short of the mortgage tax revenue they had anticipated this year, and facing rising energy costs, officials have been weighing whether to fill open positions, fix roads, and continue to fund some programs in 2009. And then, there is always the talk of potentially raising taxes.
With Tuesday's budget deadline looming, town officials said they are considering many options. A sampling finds proposed strategies ranging from hiring freezes to bond issues to cover the shortfall between income and expenses.
Brookhaven Councilman Keith Romaine summed it up this way: "We have declining landfill revenues, declining mortgage tax revenues, property values are diminishing. We need to do two things: cut expenses and look at new ways to raise revenue."
Sep. 19--Unemployment continued to move upward on Long Island and job growth remained anemic last month, according to monthly New York State Labor Department figures released yesterday.
The unemployment rate grew to 5.2 percent in August, a jump of more than a percentage point compared with 3.8 percent in August 2007.
The job market continued to show sluggish growth, with the Island's economy adding 4,100 jobs in the private sector for the 12 months that ended in August, up 0.4 percent from a year ago.
Pearl Kamer, chief economist for the Long Island Association, said that fallout from the troubled credit markets will cause consumers to cut back on spending. That could force businesses that depend on consumers to lay off workers. "Credit will remain tight for a long time," she said. "We'll be seeing net job losses."
According to the data, the local financial services sector continued to shrink last month, with 2,200 fewer jobs in the year that ended in August.
Gary Huth, the state Labor Department's principal economist for Long Island, said tourism-related jobs also appeared to be weakening.
Republicans yesterday hammered the property tax hike they expect County Executive Thomas Suozzi to propose Monday.
Nassau legislative Minority Leader Peter Schmitt (R-Massapequa) blasted the idea that Suozzi will propose raising the county's portion of property taxes by no more than 3.9 percent in his planned 2009 budget.
"We warned the county executive for years that this day was coming, but he wouldn't listen and kept on spending," Schmitt said. "It's an outrage that the head of the state tax commission is increasing taxes in his own county."
Citing a budget crisis caused by a weak local and national economy, Suozzi said Monday the hike would raise $30 million.
"It took me six years to dig out of the mess Peter Schmitt and the Republicans had made, and he has yet to give me one concrete idea on how to save money," Suozzi said. "My 2009 budget will have $70 million in cost savings."
But Schmitt, the minority leader, said Suozzi could cut from $25 million in new expenses for what he said were nonunion and patronage positions he has added. "He should lead by example in his own house before going to the unions," he said.
Deputy County Executive Tom Stokes said the people Suozzi hired saved Nassau money. "For instance, 28 of them brought into the county attorney's office already have reduced judgments and settlements from 2002 to 2007 by $28 million over a comparable prior period, while saving $30 million on outside lawyers," Stokes said.
Presiding officer Diane Yatauro (D-Glen Cove) said: "Every effort will be made to slash costs, [but] I believe it will be necessary to support a tax increase at this time."
"A failure to raise taxes could put Nassau in fiscal jeopardy and negatively affect its bond rating," said Pearl Kamer, the Long Island Association economist.
Hofstra economics professor Marty Melkonian said Suozzi has no choice but to raise taxes. "Laying off workers would just fuel the crisis," he said.
But Antonia DiGregorio, a librarian from Oceanside still paying her student loans, said she fears the increase will cost her and other middle-class county residents their homes.
"Suozzi should take a pay [cut], drive himself to work and save the county money, if he really cares," she said.
Lenders repossessed 134 homes on Long Island last month, as the rate of foreclosures statewide grew by 33 percent from a year ago, according to figures to be released today by RealtyTrac.
In Suffolk, 78 homes were seized, a 51 percent increase from August, 2007, according to RealtyTrac, an online market for foreclosures. Nassau last month had 56 foreclosures, a 25 percent increase from a year ago. The 122 properties repossessed in Queens represent a 54 percent increase, the report said.
For Nassau and Queens, those annual increases are substantially lower than those reported for the month of July. Because of a problem obtaining data for Suffolk in July 2007, the comparison between July 2008 to the previous year was not clear.
RealtyTrac spokesman Daren Blomquist said data for Long Island and the state showed “a general trend upward in foreclosure activity over the last year-and-a-half.” However, he added, “the foreclosure rate in those two counties is still below the national average.”
In Suffolk, filings shot up 51 percent, or one home for every 903 households. Filings increased by only 5 percent in Nassau, where the rate was one in every 959 households. In Queens, the number went down by 16 percent, or one in every 880 households.
Statewide, one in every 1,444 households received a foreclosure notice and the rate nationwide was one in every 416 households.
Looking for a brighter economy? Don’t hold your breath; unless you can do without oxygen until 2010.And it may be even longer. A growing chorus of financial and business experts believes it will take years for the housing, credit and energy markets to stabilize and for unemployment to recede. For the foreseeable future, in other words, what you see is what we’ve got.
And don’t look to John McCain or Barack Obama for a bailout. As Pearl Kamer, chief economist for the Long Island Association, put it: “Either candidate will face the same set of circumstances. And those circumstances are not good.”
The real estate market, the engine that drove Long Island through the first half of the decade, remains flat. In Nassau County, the median sales price as of July was $465,500, down 9 percent from $510,000 a year ago. The news was hardly better in Suffolk, where the median price was $401,750, down 3 percent from the prior year when it was $415,000.
Home sales were down 18 percent in Nassau and 16 percent in Suffolk, and new housing starts are down a precipitous 30 percent Islandwide.
Meanwhile, another 181 Long Island homes went into foreclosure in August, up 32 percent from the same period a year ago. In Nassau County, the rate of foreclosures rose 41 percent in August to 117. A staggering 89 homes in Hempstead went into foreclosure.
Foreclosures are hurting more than neighborhoods. In Babylon Village, where foreclosures were in the single digits in August, buyers are still using the perceived glut of housing as leverage in negotiations.
Long Island's real estate market generated $6 billion less in sales in 2007 than it did just two years before, costing the region millions in tax revenue, consumer spending and incomes, along with thousands of jobs, a Newsday analysis has found.
A few more than 26,000 homes were sold on Long Island in 2007, compared to more than 40,000 in 2005. Median prices, too, have fallen. As a result, 2007 sales generated $16.4 billion, compared to $22.4 billion in 2005 -- a 27 percent decline, Newsday found.
What's more, the median home price of houses currently on the market has also fallen, an indication that the declines in sales revenue probably will continue.
On Monday, federal regulators announced they had taken over Fannie Mae and Freddie Mac, government-backed companies that hold more than $5 trillion in mortgage debt. The move is meant to shore up the "availability of mortgage finance," regulators said, and is expected to be good news for homeowners hoping to refinance existing mortgages at lower rates and, perhaps, it will help stabilize the real estate market.
Declines across Island
A Newsday review of home sales data shows that, across Long Island, 88 of 127 school districts saw declines in median home prices of actual sales from 2006 to 2007, according to Newsday's analysis of home sales data provided by New York State. Ten of them, in communities across Long Island, including Quogue, East Williston and Oyster Bay, saw price declines of more than 10 percent; two saw more than 30 percent.
Some school districts' sales volumes in dollars were halved -- or more -- over two years. Experts estimate that half of that money ultimately stays on Long Island, with the decline rippling through the local economy, leading to the potential loss of more than 20,000 jobs and nearly $5 billion in economic output.
And there's every indication that the bleeding isn't slowing. The 26,000 homes currently for sale on the Long Island Multiple Listing Service are on the market for a median price that's $40,000 less than a year ago in Suffolk County, and $50,000 less in Nassau County, statistics show. The number of closings is down 17 percent from a year ago. Newsday's analysis found it would take 19 months in Suffolk County and 15 months in Nassau County to sell all the homes on the market at the current sales pace.
"This is only the beginning," said Pearl Kamer, the chief economist with the Long Island Association, who analyzed the data further for Newsday. "This can go on for two or three years, well into 2010."
The U.S. economy turned in a worse performance than economists had predicted for August, with bigger job losses and the highest unemployment rate in five years.
The latest report once again raised the specter of a recession.
The nation lost 84,000 jobs in August, compared with July, according to the Bureau of Labor Statistics. That was far more than the 75,000, economists surveyed by Bloomberg News had predicted. The unemployment rate rose to 6.1 percent, higher than the 5.7 percent analysts had expected.
"It certainly increases the probability that we really are in a recession," William Poole, former president of the Federal Reserve Bank of St. Louis, said in an interview with Bloomberg Television.
The national economy has now lost jobs for eight consecutive months.
Although Long Island hasn't yet lost jobs, its employment growth has been anemic for months. In the 12-month period ended in July, the Island's economy gained a net 2,800 jobs, or a 0.3 percent rise. And its unemployment rate last month also set a five-year high -- 5.0 percent. The rate has been steadily rising since April. August figures for Long Island are due on Sept. 18.
The hardest-hit industries nationally were manufacturing and employment services, which includes temporary-staffing companies. Manufacturing lost a net 61,000 jobs in August, compared with July.
Toni Scarcella, 27, of Kings Park is a Long Islander to her core. Born in
Brookhaven, she spent her early years in Medford before the family moved to
East Meadow, where her parents still live.
She and her husband pay $1,700 for a two-bedroom basement apartment, but
want a place more suitable for their two growing sons. The family may have
to leave Long Island, she said, to give their boys the lifestyle she and her
husband enjoyed growing up here. Florida may be in their future.
"We're not poor. We're not wealthy. We're, like, right dead in the middle
class," Scarcella said. Listing expenses such as rent, gas and health
insurance, Scarcella said it's a struggle to live here. "Long Island is not
for the middle class anymore."
Whether the Island remains hospitable to the middle class is up for debate.
But an analysis of census data by Seth Forman, chief planner of the Long
Island Regional Planning Board, shows what some experts consider a worrisome
sign: a 19 percent drop from 2000 to 2006 in the number of middle class
households on Long Island that annually earn $87,500 to $116,500.
Forman's numbers also show that a separate "lower middle class" group, which
earns less, is actually rising. But the $87,500-$116,500 group is
considered by experts to be the "core" of the middle class on Long Island.
So its apparent decline is causing a stir among economists and planners.
Lenders repossessed 150 homes on Long Island this past month, part of a 184 percent increase from a year ago in nationwide foreclosures, according to figures to be released Thursday by RealtyTrac, an online market for foreclosures.
The 69 foreclosures in Nassau represent a 97 percent increase from a year ago. In Suffolk 81 homes were seized, but the change over last year is not clear because RealtyTrac recorded zero foreclosures for Suffolk in July 2007, when it had problems getting data. There were 109 repossessions in Queens this past month compared to 23 a year ago, a 374 percent increase, data show.
Repossessions are now the fastest growing type of foreclosure-related filings, which include default and auction notices, according to the company. The Web site's 750,000 repossessed homes, also called REO or real estate owned by lenders, make up 17 percent of all existing homes for sale, based on June figures from the National Association of Realtors, RealtyTrac calculated. The Web site does not cover all foreclosures.
"The sharp rise in REOs, combined with slow sales, has resulted in a bloated inventory of bank-owned properties for sale," said RealtyTrac chief executive James J. Saccacio.
New York State was average in rate of foreclosures. There was an 184.5 percent increase in repossessions for July, or 916 properties compared to 322 a year ago.
The rate of foreclosures has been growing as homeowners' mortgage problems wend their way through the process, which in New York State can take two years. Higher interest rates have been kicking in in the past two years as low teaser rates expired. Three months of missed payments launches the foreclosure process. Then lenders have to advertise the auction. Usually, court approval is needed.
NEW YORK (CNNMoney.com) -- Employers cut jobs in July for the seventh straight month, while the unemployment rate hit a four-year high, according to a government report released Friday.
The Labor Department reported a net loss of 51,000 jobs in the month. Economists surveyed by Briefing.com had been forecasting a loss of 75,000 jobs in the latest report.
The latest report brought job losses this year to 463,000. The June job loss number was revised to 51,000.
The unemployment rate rose to 5.7% from a 5.5% reading in June. It was the worst reading since March 2004, and slightly worse than economists' forecast of a 5.6% rate.
The rate has now jumped a full percentage point from a year ago.
But the 5.7% unemployment rate tells only part of the problem facing job seekers. It doesn't include those who have become discouraged from looking for work, or those who have accepted part-time jobs when they want to be working full time.
Counting the unemployed or underemployed, the rate rises to 10.3%, the first time that measure has hit double figures since November 2003.
Those who are out of work are also taking longer to find new jobs. There are now 1.7 million people out of work for six months or more, which is up 6% from a month early and is 28% above year-ago levels. Nearly one in five people counted as unemployed have now been out of work for six months or more.
"It is becoming increasingly hard for Americans to find work in this economy," Sen. Charles Schumer, D-N.Y., said in a statement. "As the construction, manufacturing, and now retail sectors are reeling from job losses, too many workers are being forced to reduce their hours and take part-time jobs just to make ends meet."
ALBANY _ The State Commission of Investigation reported Thursday that mortgage fraud is on the rise in New York and has hit hardest in New York City, Long Island and the Rochester area, regions where subprime loans are most common.
But the commission also notes many homeowners with poor credit share the blame for losing their homes through defaulting on mortgages.
"It is clear to the commission that, from approximately 2003 through 2006, many New Yorkers who lacked sufficient financial means were put into homes that they could not afford," according to the panel's report.
"Credit was readily available, perhaps to a greater extent than it should have been, and lenders, mortgage brokers, real estate brokers and appraisers all profited from the purchase, sale and financing of houses," the report stated.
The commission reported that foreclosures statewide were up 14 percent in the first quarter of this year compared to the same period in 2007.
"To be sure, the overwhelming desire to own a home may have clouded their judgment, causing them to ignore commonsense and basic instinct regarding the affordability of their mortgages," the commission said of homeowners caught in the national credit crisis."Owning a home was, perhaps, something they had dreamed of for a long time but could not otherwise have afforded under stricter lending standards."
ALBANY - Gov. David Paterson has frozen most hiring, ordered an additional 7 percent cut in agency spending and called on the Legislature to approve $600 million in additional cuts to shore up state finances in a New York economy that his budget director says is ''officially'' in recession.
Paterson on Wednesday proposed cutting state spending by a total of $1.23 billion in the current budget to offset a ''mammoth'' decline in revenues. He projects there will be $26.2 billion in budget deficits over the next three years, a high figure even for a state government that routinely contends with deficits because of rising spending.
''We are now officially saying New York is in a recession,'' said Budget Director Laura Anglin. She saidNew York's recessions have historically lasted 25 months, longer than national recessions.
Paterson said he will seek the Legislature's approval for $600 million in cuts spread throughout state programs, which may include midyear reductions to school districts. But Paterson said he doesn't currently any tax increases, including a temporary income tax hike for millionaires pushed by Assembly Democrats.
He said the 7 percent cut in agency funding, on top of a 3.35 percent cut in the spring, shouldn't hurt services at parks, in state police, for highway maintenance, or support for schools and hospitals.
Paterson has also called the Legislature back to Albany for an emergency economic session on Aug. 19 to enact the $600 million in cuts that need the Legislature's approval. That could include funding c
This is what happens to you when you make very big expensive decisions based on very small matters.] - LIBubble 
