Housing Starts Hit Record Low in April Housing starts hit a record low in April, the U.S. Commerce Department reported, but the news wasn't all bad as single-family construction rose 2.8 percent, the second straight month of gains in that sector. Overall, housing starts fell 13 percent to an annual rate of 458,000, driven by the decline in construction of apartment buildings and condominiums. Building permits, an indicator of future construction, fell 3.3 percent to a record low of 494,000.Here's a look at housing starts at the regional level:
● Northeast: fell 31 percent
● Midwest: dropped 21 percent
● South: declined 21 percent
● West: rose 43 percent
Analysts believe that while joblessness will keep some people from starting new households, increased demand for more housing is inevitable.
“Now that fewer homes are hitting the market for sale, the growing U.S. population will have fewer homes to choose from,” Tony Crescenzi, chief bond-market strategist at Miller Tabak & Co. in New York, wrote in a note to clients. “This will undoubtedly be a game changer for inventories and prices.”
Source: Bloomberg, Bob Willis (05/19/2009)
Saturday, May 23, 2009
Credit Crunch, Economy Hurt Commercial Sector
Credit Crunch, Economy Hurt Commercial Sector
The general economic downturn, complicated by a severe credit crunch in commercial real estate, is dampening commercial real estate activity. In addition, a forward-looking index shows the forecast for commercial real estate sectors will remain weak for the remainder of the year, according to the NATIONAL ASSOCIATION of REALTORS®.Lawrence Yun, NAR chief economist, said commercial real estate has been hit by a double whammy.
“Significant job losses have reduced the demand for commercial space, while a lack of credit has stalled transactions and refinancing activity,” he said. “It is critical for the Federal Reserve to increase liquidity by purchasing commercial mortgage-backed securities. Because commercial real estate always lags an overall economic recovery, it will take some time for the commercial real estate market to rebound.” Declines in Commercial IndicesThe Commercial Leading Indicator for Brokerage Activity fell 4.8 percent to an index of 103.5 in the first quarter from a downwardly revised reading of 108.7 in the fourth quarter, and is 12.9 percent below the 118.8 recorded in the first quarter of 2008. NAR’s track of the commercial leading indicator dates back to 1990.The weakening index means commercial real estate activity, as measured by net absorption and the completion of new commercial buildings, can be expected to decline over the next six to nine months. The Society of Industrial and Office REALTORS®, in its SIOR Commercial Real Estate Index, a separate attitudinal survey of more than 600 local market experts, also indicates a lower level of business activity in upcoming quarters. More than 90 percent of respondents believe it is a tenant’s market, with many tenants benefiting from moderate to deep discounts in office and industrial rental rates, as well as landlord concessions.The SIOR index has declined for nine straight quarters and stood at 42.3 in the first quarter, well below the 100 point criteria that represents a balanced marketplace.REALTORS® Commercial Alliance Committee chair Robert Toothaker said data for commercial mortgage-backed securities are very telling.
“We went from $230 billion in CMBS issued in 2007 to only $12 billion in 2008,” he said. “Thus far in 2009 the number is essentially zero – liquidity in commercial credit is crucial to prevent damage to the broader economy. We need better policies and progress in accounting rules to facilitate lending.”Overall, commercial vacancy rates are rising and rents are softening, according to NAR’s latest Commercial Real Estate Outlook. The NAR forecast for four major commercial sectors analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data were provided by Torto Wheaton Research.Overall Economic OutlookThe gross domestic product is expected to contract 2.9 percent this year, then grow 1.4 percent in 2010. Similarly, the consumer price index is forecast to decline 0.8 percent in 2009 before rising 1.7 percent next year.The unemployment rate is projected to average 9.5 percent this year and 10.2 percent in 2010. Inflation-adjusted disposable income is likely to grow 1.3 percent in 2009 and 1.1 percent next year.“Although we expect the economy to begin to stabilize later this year, unemployment will probably peak at about 10.5 percent around the end of 2009,” Yun said. “The job picture should gradually improve as 2010 progresses, but the fundamentals in commercial real estate won’t stabilize until somewhat later and will depend on the Fed’s actions.”Office MarketThe office sector is suffering the most from job losses, which continue to reduce demand for space. Vacancy rates are projected to increase to 16.1 percent in 2009 from 13.4 percent last year, and rise to 20.4 percent in 2010. Annual rent in the office sector is forecast to fall 7.2 percent this year and 0.8 percent in 2010 after a 0.4 percent decline last year. In 57 markets tracked, net absorption of office space, which includes the leasing of new space coming on the market as well as space in existing properties, is seen as a negative 81.7 million square feet in 2009 and a negative 115.0 million next year.Industrial Market The global economic slowdown is affecting the industrial sector, which had benefited from a demand for exports before the recent slump.
Vacancy rates in the industrial sector are estimated to rise to 11.9 percent in 2009 and 12.6 percent next year, compared with 10.4 percent in 2008.Annual rent is likely to fall 3.4 percent this year and 4.0 percent in 2010, after declining 0.8 percent in 2008. Net absorption of industrial space in 58 markets tracked should be a negative 51.0 million square feet this year, then a positive 23.2 million in 2010. Many obsolete structures remain on the market because construction in recent years was designed to meet customized needs of industrial clients.Retail MarketWith consumers reluctant to spend much in the current economy, the retail vacancy rate will probably rise to 12.1 percent this year and 15.8 percent in 2010 from 9.7 percent in 2008. Average retail rent is expected to fall 2.1 percent in 2009 and 1.5 percent next year; it declined 2.0 percent in 2008. Net absorption of retail space in 53 tracked markets will likely be a negative 38.6 million square feet this year and a negative 44.2 million in 2010.
Multifamily MarketThe apartment rental market – multifamily housing – has been doing better than other commercial sectors, but a gain in home sales during the second half of this year will modify demand. Multifamily vacancy rates are forecast to rise to 6.8 percent in 2009 and 6.7 percent next year from 5.7 percent in 2008.Average rent should grow 1.5 percent this year and 2.5 percent in 2010, following a 2.9 percent gain in 2008. Multifamily net absorption is projected at 133,000 units in 59 tracked metro areas in 2009 and 89,700 next year.
Source: NAR
The general economic downturn, complicated by a severe credit crunch in commercial real estate, is dampening commercial real estate activity. In addition, a forward-looking index shows the forecast for commercial real estate sectors will remain weak for the remainder of the year, according to the NATIONAL ASSOCIATION of REALTORS®.Lawrence Yun, NAR chief economist, said commercial real estate has been hit by a double whammy.
“Significant job losses have reduced the demand for commercial space, while a lack of credit has stalled transactions and refinancing activity,” he said. “It is critical for the Federal Reserve to increase liquidity by purchasing commercial mortgage-backed securities. Because commercial real estate always lags an overall economic recovery, it will take some time for the commercial real estate market to rebound.” Declines in Commercial IndicesThe Commercial Leading Indicator for Brokerage Activity fell 4.8 percent to an index of 103.5 in the first quarter from a downwardly revised reading of 108.7 in the fourth quarter, and is 12.9 percent below the 118.8 recorded in the first quarter of 2008. NAR’s track of the commercial leading indicator dates back to 1990.The weakening index means commercial real estate activity, as measured by net absorption and the completion of new commercial buildings, can be expected to decline over the next six to nine months. The Society of Industrial and Office REALTORS®, in its SIOR Commercial Real Estate Index, a separate attitudinal survey of more than 600 local market experts, also indicates a lower level of business activity in upcoming quarters. More than 90 percent of respondents believe it is a tenant’s market, with many tenants benefiting from moderate to deep discounts in office and industrial rental rates, as well as landlord concessions.The SIOR index has declined for nine straight quarters and stood at 42.3 in the first quarter, well below the 100 point criteria that represents a balanced marketplace.REALTORS® Commercial Alliance Committee chair Robert Toothaker said data for commercial mortgage-backed securities are very telling.
“We went from $230 billion in CMBS issued in 2007 to only $12 billion in 2008,” he said. “Thus far in 2009 the number is essentially zero – liquidity in commercial credit is crucial to prevent damage to the broader economy. We need better policies and progress in accounting rules to facilitate lending.”Overall, commercial vacancy rates are rising and rents are softening, according to NAR’s latest Commercial Real Estate Outlook. The NAR forecast for four major commercial sectors analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data were provided by Torto Wheaton Research.Overall Economic OutlookThe gross domestic product is expected to contract 2.9 percent this year, then grow 1.4 percent in 2010. Similarly, the consumer price index is forecast to decline 0.8 percent in 2009 before rising 1.7 percent next year.The unemployment rate is projected to average 9.5 percent this year and 10.2 percent in 2010. Inflation-adjusted disposable income is likely to grow 1.3 percent in 2009 and 1.1 percent next year.“Although we expect the economy to begin to stabilize later this year, unemployment will probably peak at about 10.5 percent around the end of 2009,” Yun said. “The job picture should gradually improve as 2010 progresses, but the fundamentals in commercial real estate won’t stabilize until somewhat later and will depend on the Fed’s actions.”Office MarketThe office sector is suffering the most from job losses, which continue to reduce demand for space. Vacancy rates are projected to increase to 16.1 percent in 2009 from 13.4 percent last year, and rise to 20.4 percent in 2010. Annual rent in the office sector is forecast to fall 7.2 percent this year and 0.8 percent in 2010 after a 0.4 percent decline last year. In 57 markets tracked, net absorption of office space, which includes the leasing of new space coming on the market as well as space in existing properties, is seen as a negative 81.7 million square feet in 2009 and a negative 115.0 million next year.Industrial Market The global economic slowdown is affecting the industrial sector, which had benefited from a demand for exports before the recent slump.
Vacancy rates in the industrial sector are estimated to rise to 11.9 percent in 2009 and 12.6 percent next year, compared with 10.4 percent in 2008.Annual rent is likely to fall 3.4 percent this year and 4.0 percent in 2010, after declining 0.8 percent in 2008. Net absorption of industrial space in 58 markets tracked should be a negative 51.0 million square feet this year, then a positive 23.2 million in 2010. Many obsolete structures remain on the market because construction in recent years was designed to meet customized needs of industrial clients.Retail MarketWith consumers reluctant to spend much in the current economy, the retail vacancy rate will probably rise to 12.1 percent this year and 15.8 percent in 2010 from 9.7 percent in 2008. Average retail rent is expected to fall 2.1 percent in 2009 and 1.5 percent next year; it declined 2.0 percent in 2008. Net absorption of retail space in 53 tracked markets will likely be a negative 38.6 million square feet this year and a negative 44.2 million in 2010.
Multifamily MarketThe apartment rental market – multifamily housing – has been doing better than other commercial sectors, but a gain in home sales during the second half of this year will modify demand. Multifamily vacancy rates are forecast to rise to 6.8 percent in 2009 and 6.7 percent next year from 5.7 percent in 2008.Average rent should grow 1.5 percent this year and 2.5 percent in 2010, following a 2.9 percent gain in 2008. Multifamily net absorption is projected at 133,000 units in 59 tracked metro areas in 2009 and 89,700 next year.
Source: NAR
Practitioners Say Homes Prices Have Hit Bottom
Practitioners Say Homes Prices Have Hit Bottom Real estate professionals are optimistic that home prices will hit bottom in the next six months, according to a survey from listing and home-pricing site HomeGain.com.About half of practitioners surveyed expect home prices to stay the same in the next six months, 29 percent expect them to drop, and 22 percent believe they will increase.
More than 84 percent of practitioners believe their clients’ homes lost value in the last year, while 12 percent say values had stayed the same. Only 3 percent believe homes had gained value.Meanwhile, sellers were skeptical of their real estate professional’s analysis, with 69 percent believing their homes were worth more than the practitioner recommended. About 35 percent of home sellers thought their home was worth 10 percent to 20 percent more, and 10 percent thought their home was worth at least 21 percent more than their real estate professional suggested.
Source: Inman News (05/18/2009)
More than 84 percent of practitioners believe their clients’ homes lost value in the last year, while 12 percent say values had stayed the same. Only 3 percent believe homes had gained value.Meanwhile, sellers were skeptical of their real estate professional’s analysis, with 69 percent believing their homes were worth more than the practitioner recommended. About 35 percent of home sellers thought their home was worth 10 percent to 20 percent more, and 10 percent thought their home was worth at least 21 percent more than their real estate professional suggested.
Source: Inman News (05/18/2009)
Practitioners Say Homes Prices Have Hit Bottom
Practitioners Say Homes Prices Have Hit Bottom
Real estate professionals are optimistic that home prices will hit bottom in the next six months, according to a survey from listing and home-pricing site HomeGain.com.About half of practitioners surveyed expect home prices to stay the same in the next six months, 29 percent expect them to drop, and 22 percent believe they will increase.
More than 84 percent of practitioners believe their clients’ homes lost value in the last year, while 12 percent say values had stayed the same. Only 3 percent believe homes had gained value.Meanwhile, sellers were skeptical of their real estate professional’s analysis, with 69 percent believing their homes were worth more than the practitioner recommended. About 35 percent of home sellers thought their home was worth 10 percent to 20 percent more, and 10 percent thought their home was worth at least 21 percent more than their real estate professional suggested.
Source: Inman News (05/18/2009)
Real estate professionals are optimistic that home prices will hit bottom in the next six months, according to a survey from listing and home-pricing site HomeGain.com.About half of practitioners surveyed expect home prices to stay the same in the next six months, 29 percent expect them to drop, and 22 percent believe they will increase.
More than 84 percent of practitioners believe their clients’ homes lost value in the last year, while 12 percent say values had stayed the same. Only 3 percent believe homes had gained value.Meanwhile, sellers were skeptical of their real estate professional’s analysis, with 69 percent believing their homes were worth more than the practitioner recommended. About 35 percent of home sellers thought their home was worth 10 percent to 20 percent more, and 10 percent thought their home was worth at least 21 percent more than their real estate professional suggested.
Source: Inman News (05/18/2009)
Mortgage Rates Continue to Fall
Mortgage Rates Continue to Fall
Freddie Mac reports a drop in the 30-year fixed mortgage rate to 4.82 percent during the week ended May 21 from 4.86 percent the prior week. Meanwhile, the 15-year fixed mortgage rate dipped to 4.5 percent.
The Federal Reserve is working to hold down rates by purchasing upwards of $1.25 trillion in mortgage-backed securities and $300 billion in Treasuries. Mortgage rate premiums have declined substantially over the last couple of months even as Treasury yields climbed.
Source: Investor's Business Daily (05/22/09)
Freddie Mac reports a drop in the 30-year fixed mortgage rate to 4.82 percent during the week ended May 21 from 4.86 percent the prior week. Meanwhile, the 15-year fixed mortgage rate dipped to 4.5 percent.
The Federal Reserve is working to hold down rates by purchasing upwards of $1.25 trillion in mortgage-backed securities and $300 billion in Treasuries. Mortgage rate premiums have declined substantially over the last couple of months even as Treasury yields climbed.
Source: Investor's Business Daily (05/22/09)
HUD: Homebuyer Tax Credit Loans Still on Track
HUD: Homebuyer Tax Credit Loans Still on Track
News reports that the federal government is backing away from its plan to permit eligible borrowers to monetize the first-time homebuyer tax credit are off the mark, a spokesperson for the U.S. Department of Housing and Urban Development says. "The technical details are still being finalized and will soon be published in a mortgagee letter and posted on our Web site," Lemar Wooley, a HUD spokesperson, told REALTOR® magazine Wednesday afternoon.
Under the guidance that's under development, state agencies and other HUD-approved entities would be able to provide short-term bridge loans that households could use to help with their downpayment. The loans would be repaid with the proceeds from the households' federal tax credit.The loans were announced on the opening day of NAR's 2009 Midyear Legislative Meetings in Washington, D.C., last week.
In his announcement, HUD Secretary Shaun Donovan said guidance would be issued shortly. When the guidance is released, it is expected to cover eligible lenders and set parameters for loan terms and repayment.
Source: REALTOR® Magazine Online
News reports that the federal government is backing away from its plan to permit eligible borrowers to monetize the first-time homebuyer tax credit are off the mark, a spokesperson for the U.S. Department of Housing and Urban Development says. "The technical details are still being finalized and will soon be published in a mortgagee letter and posted on our Web site," Lemar Wooley, a HUD spokesperson, told REALTOR® magazine Wednesday afternoon.
Under the guidance that's under development, state agencies and other HUD-approved entities would be able to provide short-term bridge loans that households could use to help with their downpayment. The loans would be repaid with the proceeds from the households' federal tax credit.The loans were announced on the opening day of NAR's 2009 Midyear Legislative Meetings in Washington, D.C., last week.
In his announcement, HUD Secretary Shaun Donovan said guidance would be issued shortly. When the guidance is released, it is expected to cover eligible lenders and set parameters for loan terms and repayment.
Source: REALTOR® Magazine Online
Monday, May 18, 2009
Sales Suffer in a Wealthy ZIP Code
Sales Suffer in a Wealthy ZIP Code
A SPACIOUS four-bedroom three-and-a-half-bath split ranch with an in-ground gunite pool and a cabana on two and a half acres with backyard to die for: Billee and Irving Spodek’s house went on the market last May for $1.975 million, and they accepted an offer on it within three months. But in October, just days before the closing, the stock market tanked, the bank withdrew its mortgage commitment and the deal fell through.
They quickly relisted the property, but to no avail. “I barely showed the house all winter,” said Ms. Spodek, an agent for Coldwell Banker in East Hills, who had planned to downsize.
Her house remains unsold; the listing price has dropped to $1.785 million, with nary a serious buyer in sight.
The Spodeks’ situation is not unusual in this wealthy village of about 1,100 homes and estates set along winding scenic roads, with its horse trails, polo fields, gardens and two country clubs. According to the Multiple Listing Service of Long Island, 88 homes here are on the market, priced from $949,000 to $20 million.
As if it were needed, here is more proof of how hard the downturn has hit the luxury market. According to a report by Prudential Douglas Elliman, it was the North Shore submarket — from Kings Point to Laurel Hollow, north of the Long Island Expressway and Route 25 — that showed Long Island’s largest decline in the first quarter of this year. The number of sales fell 40.3 percent, to 216 units.
Old Westbury is the heart of the North Shore. Its ZIP code, 11568, is ranked as the 10th most affluent in the country. From Jan. 1 through May 1, it had two home sales; last year over the same period, there were seven.
Dottie Herman, president and chief executive of Prudential Douglas Elliman, said there was a backlog of homes priced at $2 million to $4 million. Some belong to people who lost money in the Ponzi scheme constructed by Bernard Madoff, Ms. Herman said, while others are either casualties of the financial crisis or simply seeking to downsize.
Looking more broadly at Nassau County, the Multiple List Service of Long Island found that from Jan. 1 through May 6, four homes sold at $3 million or above, versus 24 a year earlier. In the $2 million to $3 million range, 16 homes sold in the first four months of this year, versus 46 in that period last year. Of homes priced at $1 million to $2 million, 67 have sold so far this year, versus 140 last year.
Marc Schwaber, president and chief executive of the Melville- and Manhattan-based Preferred Empire mortgage company, said that the high end had suffered the most, and that the market had “clearly dropped by 30 percent.”
Banks are looking for larger down payments and scrutinizing credit histories and income. And even loans of up to $729,000 — the line above which mortgages become so-called jumbo loans — aren’t sufficient in a village where starting prices approach $1 million, he said.
Thomas A. Toscano, a Mineola-based real estate lawyer who represents lenders, says jumbo mortgages, which carry higher interest rates, are more difficult to obtain.
Jonathan J. Miller, a real estate appraiser and president of the Manhattan-based Miller Samuel Inc., is the author of the Prudential report. He said that with inventory rising in higher-priced housing markets, sale activities were “disproportionately lower.” Even those with stellar credit ratings and deep pockets may not have $1 million to plunk down as a 50 percent down payment on a $2 million home, he pointed out.
While buyers may think that with so much inventory they can “buy things at a fire sale,” Mr. Miller said, sellers “aren’t in sync” and may not be willing to “negotiate aggressively to the amount the buyers expect.” A result is fewer deals.
As for Ms. Spodek, she declared that buyers were “taking advantage” of sellers, and that she would not sell if she had to lower her price any further.
“If I had sold my house two years ago,” she added, “I would have gotten over $2 million for it. They are coming in with lowball offers, and you are supposed to say, ‘Thank you for buying my home.’ They are giving you crumbs. They want a $3 million house for $1 million.”
On her quiet road in the prime Jericho School District, all she hears “is crickets and birds,” she said. She also described her home — which has been featured in the Nickelodeon commercial “Got Chocolate Milk” and a New York State Lottery commercial — as “a good deal,” even considering its $30,404 yearly tax bill, which is slightly lower than many of her neighbors’.
Property taxes are a deterrent in areas like Old Westbury, said Anthony Piscopio, manager of Century 21 Laffey Syosset; he described them as having gone “through the roof.” Taxes on a $1.6 million expanded ranch that sold this year were $24,806; a French manor house that sold for $4 million carried a $45,269 bill. “A lot of the people that are selling in the higher end are downsizing because of cost,” Mr. Piscopio pointed out.
Among his listings is the four-acre estate of Victoria Gotti, daughter of the Mafia figure John Gotti — who not long ago starred, along with her columned white-brick mansion, in the cable TV show “Growing Up Gotti.” The property has fountains, a pool with cascading waterfalls, a guest house, and a stable with paddock. It carries an annual tax tab of $81,204, including village taxes of $12,832.
On and off the market for the last five years, and at one time listed for $4.8 million, the estate went into foreclosure on May 5, according to a state appellate court ruling, because mortgage payments had not been made since 2006. Dollinger, Gonski & Grossman, the Carle Place law firm representing Ms. Gotti, declined to comment.
Last Tuesday, according to Mr. Piscopio, the price was lowered to $2.3 million, from a range of $2.9 million to $3.2 million. The range given in December was $3.2 million to $3.5 million.
Source: New York Times By MARCELLE S. FISCHLER
A SPACIOUS four-bedroom three-and-a-half-bath split ranch with an in-ground gunite pool and a cabana on two and a half acres with backyard to die for: Billee and Irving Spodek’s house went on the market last May for $1.975 million, and they accepted an offer on it within three months. But in October, just days before the closing, the stock market tanked, the bank withdrew its mortgage commitment and the deal fell through.
They quickly relisted the property, but to no avail. “I barely showed the house all winter,” said Ms. Spodek, an agent for Coldwell Banker in East Hills, who had planned to downsize.
Her house remains unsold; the listing price has dropped to $1.785 million, with nary a serious buyer in sight.
The Spodeks’ situation is not unusual in this wealthy village of about 1,100 homes and estates set along winding scenic roads, with its horse trails, polo fields, gardens and two country clubs. According to the Multiple Listing Service of Long Island, 88 homes here are on the market, priced from $949,000 to $20 million.
As if it were needed, here is more proof of how hard the downturn has hit the luxury market. According to a report by Prudential Douglas Elliman, it was the North Shore submarket — from Kings Point to Laurel Hollow, north of the Long Island Expressway and Route 25 — that showed Long Island’s largest decline in the first quarter of this year. The number of sales fell 40.3 percent, to 216 units.
Old Westbury is the heart of the North Shore. Its ZIP code, 11568, is ranked as the 10th most affluent in the country. From Jan. 1 through May 1, it had two home sales; last year over the same period, there were seven.
Dottie Herman, president and chief executive of Prudential Douglas Elliman, said there was a backlog of homes priced at $2 million to $4 million. Some belong to people who lost money in the Ponzi scheme constructed by Bernard Madoff, Ms. Herman said, while others are either casualties of the financial crisis or simply seeking to downsize.
Looking more broadly at Nassau County, the Multiple List Service of Long Island found that from Jan. 1 through May 6, four homes sold at $3 million or above, versus 24 a year earlier. In the $2 million to $3 million range, 16 homes sold in the first four months of this year, versus 46 in that period last year. Of homes priced at $1 million to $2 million, 67 have sold so far this year, versus 140 last year.
Marc Schwaber, president and chief executive of the Melville- and Manhattan-based Preferred Empire mortgage company, said that the high end had suffered the most, and that the market had “clearly dropped by 30 percent.”
Banks are looking for larger down payments and scrutinizing credit histories and income. And even loans of up to $729,000 — the line above which mortgages become so-called jumbo loans — aren’t sufficient in a village where starting prices approach $1 million, he said.
Thomas A. Toscano, a Mineola-based real estate lawyer who represents lenders, says jumbo mortgages, which carry higher interest rates, are more difficult to obtain.
Jonathan J. Miller, a real estate appraiser and president of the Manhattan-based Miller Samuel Inc., is the author of the Prudential report. He said that with inventory rising in higher-priced housing markets, sale activities were “disproportionately lower.” Even those with stellar credit ratings and deep pockets may not have $1 million to plunk down as a 50 percent down payment on a $2 million home, he pointed out.
While buyers may think that with so much inventory they can “buy things at a fire sale,” Mr. Miller said, sellers “aren’t in sync” and may not be willing to “negotiate aggressively to the amount the buyers expect.” A result is fewer deals.
As for Ms. Spodek, she declared that buyers were “taking advantage” of sellers, and that she would not sell if she had to lower her price any further.
“If I had sold my house two years ago,” she added, “I would have gotten over $2 million for it. They are coming in with lowball offers, and you are supposed to say, ‘Thank you for buying my home.’ They are giving you crumbs. They want a $3 million house for $1 million.”
On her quiet road in the prime Jericho School District, all she hears “is crickets and birds,” she said. She also described her home — which has been featured in the Nickelodeon commercial “Got Chocolate Milk” and a New York State Lottery commercial — as “a good deal,” even considering its $30,404 yearly tax bill, which is slightly lower than many of her neighbors’.
Property taxes are a deterrent in areas like Old Westbury, said Anthony Piscopio, manager of Century 21 Laffey Syosset; he described them as having gone “through the roof.” Taxes on a $1.6 million expanded ranch that sold this year were $24,806; a French manor house that sold for $4 million carried a $45,269 bill. “A lot of the people that are selling in the higher end are downsizing because of cost,” Mr. Piscopio pointed out.
Among his listings is the four-acre estate of Victoria Gotti, daughter of the Mafia figure John Gotti — who not long ago starred, along with her columned white-brick mansion, in the cable TV show “Growing Up Gotti.” The property has fountains, a pool with cascading waterfalls, a guest house, and a stable with paddock. It carries an annual tax tab of $81,204, including village taxes of $12,832.
On and off the market for the last five years, and at one time listed for $4.8 million, the estate went into foreclosure on May 5, according to a state appellate court ruling, because mortgage payments had not been made since 2006. Dollinger, Gonski & Grossman, the Carle Place law firm representing Ms. Gotti, declined to comment.
Last Tuesday, according to Mr. Piscopio, the price was lowered to $2.3 million, from a range of $2.9 million to $3.2 million. The range given in December was $3.2 million to $3.5 million.
Source: New York Times By MARCELLE S. FISCHLER
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