| Terry Woods 2009 HAPPY NEW YEAR Real Estate Newsletter |
| Prudential Douglas Elliman REAL ESTATE 30 West Park Ave. Long Beach, NY 11561 Phone: 516-432-3400 Fax: 516-431-6328 MY CELLPHONE: 516/650-1131 |
HAPPY NEW YEAR! A lot of you have been writing to ask, "Where's the newsletter?" I've slowed
up a bit on posting, and will probably only send mailings out quarterly from now on.
First off I would like to post up a couple of charts that illustrate the Long Beach market situation.
Below is an 18 year chart of average and median prices in Long Beach. Note that the average and
median prices begin to climb in the late nineties (100% increase from '98 to '03), peaking in 2005.
There is a 'false peak' in the average price in 2007 caused by a small number of extraordinarily
high-priced luxury properties. (Click on the chart to enlarge)
up a bit on posting, and will probably only send mailings out quarterly from now on.
First off I would like to post up a couple of charts that illustrate the Long Beach market situation.
Below is an 18 year chart of average and median prices in Long Beach. Note that the average and
median prices begin to climb in the late nineties (100% increase from '98 to '03), peaking in 2005.
There is a 'false peak' in the average price in 2007 caused by a small number of extraordinarily
high-priced luxury properties. (Click on the chart to enlarge)
Next is a 12 year chart illustrating the volume of sales, i.e., number of homes sold each
year in Long Beach. Again, 2005 is the peak, with a 40% drop from '05 to '08!
(click on the chart to enlarge)
year in Long Beach. Again, 2005 is the peak, with a 40% drop from '05 to '08!
(click on the chart to enlarge)
Now look at them side by side. Shrinking them highlighs the curve of the line on the
left, and although the "volume" chart is only 12 years of data, the benchmark year of
2005 stands out as the absolute peak on the right, and following the blue line (median
sold price) on the left we can clearly see the "tailing off" of prices starting after '05.
left, and although the "volume" chart is only 12 years of data, the benchmark year of
2005 stands out as the absolute peak on the right, and following the blue line (median
sold price) on the left we can clearly see the "tailing off" of prices starting after '05.
What's next? Interest rates for mortgages are still low (5.1 as I write this), and despite what you
may be reading in the media, available for good credit holders. Will the new congress and
president have an impact? Most important to our local market is how Wall Street does,
particularly regarding employment. The crash of 1987 and the subsequent loss of local
economic activity led to stagnant home prices for ten years here on Long Island. If the sales
volume does not return to yearly totals at or above 220 units a year, prices will continue to fall.
So far, the median sold price is only about 2% lower than the 2005 price. That's damn good
when you consider the massive drop off in volulme. However, there will be severe down-ward
pressure on prices when the tsunami of re-setting Adjustable Rate Mortgages given to
no-money down buyers in 2005 reaches the shore. How those home-owners react will have a
lot of influence on our local prices.
may be reading in the media, available for good credit holders. Will the new congress and
president have an impact? Most important to our local market is how Wall Street does,
particularly regarding employment. The crash of 1987 and the subsequent loss of local
economic activity led to stagnant home prices for ten years here on Long Island. If the sales
volume does not return to yearly totals at or above 220 units a year, prices will continue to fall.
So far, the median sold price is only about 2% lower than the 2005 price. That's damn good
when you consider the massive drop off in volulme. However, there will be severe down-ward
pressure on prices when the tsunami of re-setting Adjustable Rate Mortgages given to
no-money down buyers in 2005 reaches the shore. How those home-owners react will have a
lot of influence on our local prices.
| click chart to enlarge |
Finally, one last chart. Monetary inflation. Note the slight
moderation of the money supply in the late eighties and up to 1998
and how it parallells our above charts on real estate prices in the
same period. Maybe I'm a bit quick to blame the crash of '87? In
any case, at the end of the shake out of bad loans and our local
economy, home values will again march in step with the real rate of
inflation (money supply, not Consumer Price Index).
moderation of the money supply in the late eighties and up to 1998
and how it parallells our above charts on real estate prices in the
same period. Maybe I'm a bit quick to blame the crash of '87? In
any case, at the end of the shake out of bad loans and our local
economy, home values will again march in step with the real rate of
inflation (money supply, not Consumer Price Index).
| If you are looking to see Closed Prices on home sold, visit MLSLI. If you want information on a specific house, contact me directly. |