2012, as they see it: Hope and hard times
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For many in the housing market, 2012 was a year to remember. And for some, the damage caused by superstorm Sandy played a key role. But not all deals went sour in the wake of the
The following, buyers, sellers and homeowners across Long Island look at how the year treated their property values and what the months ahead may bring. And local real estate experts make their predictions for 2013.
Delphine and William Barron purchased their 100-year-old home in Huntington Bay in 1996 for $675,000. After extensive renovations, they have watched their home go up in value.
“We bought our home at the bottom of the market, and today it is worth about $1.5 million,” says Delphine, 49, a homemaker. “The house was rundown, and we got a really good price. The home was not taken care of. We restored it and now have it just the way we want it.”
The restoration of their seven-bedroom, 51 / 2 bath house was a 15-year process. Some of the upgrades included new plumbing and electrical systems, a new kitchen, new bathrooms, the installation of a saltwater pool and landscaping on their 1.2-acre property.
“Huntington Bay is an amazing beach community. We love it here,” says Delphine Barron. One thing she does not love, she says, is the rising property taxes. Since they bought the home, their taxes have gone from $14,000 to $24,000. “My taxes go up every year,” she says. “It bothers us, but it doesn’t bother us enough where we would move.”
The Barrons also own a property in France that they say has depreciated in value.
Here on Long Island, she says, “I think it will take another five years to get back to what the prices were in 2007 and 2008, but things are on the way up. I feel like the worst is over.” Delphine says she has seen more homes selling in her neighborhood in the past year.
“It’s a good sign,” she says. “It shows that the market is improving.”
After living in an apartment for more than 10 years, Robyn and Ivan Nieves’ dream of owning a home finally came true. Earlier this month, the couple (pictured with their family at right) closed on a three-bedroom, two-bath Cape in Valley Stream they purchased for $354,500.
“We paid rent for 13 years, and there was nothing to show for it,” says Robyn, 34, a mother of two boys, 11 and 14, who is a New York City preschool teacher. “When we lived in an apartment, you don’t care as much, but now that I have my own home, I want to put my mark on it and make it my own. It’s very exciting.”
For the purchase, the couple put 20 percent down and got a conventional fixed-rate loan. With their good credit score, they were able to get a favorable interest rate of 3.375 percent. “My Realtor, loan officer and lawyer were the dream team,” says Ivan Nieves, 40, who works for the New York City Department of Sanitation. “I felt like I got a fair price.”
Both say they feel optimistic about the real estate market, and they say that it worked in their favor. “We saw how the market was going and that it was the best time to buy, and we knew that if we didn’t do it now, the opportunity would pass us by and we would have regretted it,” says Robyn.
Ivan is painting the interior and fixing up the floors, and the family is getting ready to move in any day now. “I think the market is going to go up, and I hope it does,” he says, adding, “because it will bring the value of my house up.”
Gwendolyn Greene (pictured at right) never dreamed that selling her co-op in Freeport would be so difficult. The one-bedroom, one-bath apartment that she purchased in 1994 for $50,000 has been on and off the market since 2009.
In the last three years, Greene has reduced the selling price from $195,000 to $105,000, hoping to generate interest. At one point, she came so close to selling that she packed her bags and called a mover.
“The experience has been very frustrating,” says the 78-year-old Greene. “I feel like today’s buyer wants something for nothing. I worked hard my whole life to get to this point where I can just relax a little bit and not worry, and now it just seems so difficult.”
Greene has six grown children who live all over the country. She says she is eager to move South, where housing is cheaper and not as burdensome.
“I am not sure if the housing market is going to get better, and I am not sure where it is going,” she says. “People don’t have jobs. They cannot get a mortgage, and people are just not getting the prices for their houses that they used to.”
Each month, the retired assistant Verizon manager spends about $800 on maintenance fees, and it is taking its toll. “I am retired,” she said, “and my income doesn’t stretch far enough to stay in New York.”
Lawrence and Patricia Gillick (pictured at right in front of their home) have been living in their South Merrick home for 38 years. After raising their three children there and finally paying off their 30-year mortgage eight years ago, the Gillicks were starting to talk about slowing down — until superstorm Sandy blew in.
The storm ravaged parts of their Mediterranean-style home, which was deemed uninhabitable by the Town of Hempstead. The couple decided to sell rather than rebuild.
“You cannot live in the house — it needs a new foundation,” says Lawrence, 73, an insurance consultant who says he hopes to sell the home to a builder.
The asking price is $339,000 — well below what it would have sold for if it hadn’t been damaged.
Lawrence says he feels the market is going to take at least a year or two to recover from the whole crisis, and that it might take longer in his neighborhood, where many homes sustained serious damage.
“I don’t think anyone knows what the market is doing south of Merrick Road,” he adds.
Sonu Singh says he is excited about the current real estate market. The 34-year-old business owner says he enjoys investing in real estate so much that he purchased a new home in Jericho and is in contract to buy a two-family home in Queens that he plans to fix up and flip.
Other potential investments include a short-sale property in either Queens or Long Island, wherever he can get the best deal. “The opportunity we have today will never come back,” he says. “Property values and rates are low, and it is a great time for anyone to buy.”
Singh and his wife, Shweta Bagai Malhotra, 32, who have two children (pictured at right), spent the last year looking at more than 50 houses and ended up closing on a four-bedroom, three-bath ranch in October, paying $465,000 with a 3.375 30-year fixed-rate mortgage. “The house was appraised at $620,000,” he says. “We got an unbelievable deal.”
He says he believes things have stabilized. “The housing market and the banks are heading in the right direction, qualifying people who are eligible to buy houses,” he says. “If this was done the right way before, the housing market would have been totally different.”
He predicts that property values will rise, market rates will climb to about 5 percent, and interest rates will remain low, at least until the end of 2013.
In his 81 years, George Greene (right) has seen the highs and lows of the real estate market. For the last 52 years, he has been living in the same Islip Terrace home in which he raised his five children.
“I have no interest in moving or selling,” says Greene, whose wife died a few years ago. “This is my home. This is my comfort zone. My children and my grandkids always come over. We are all very close. I am very comfortable.”
In 1960, when Greene bought his ranch-style home, he paid $13,000. He remembers putting $2,000 down and having an $11,000 mortgage to pay. Today, he estimates that his home is worth between $275,000 and $300,000.
Over the decades, the former Air Force mechanic has invested in a number of real estate properties. At one point, he owned two homes in California and a commercial building in Ronkonkoma. Knowing a thing or two about the market, Greene encourages people to live within their means.
“I was there when the market was inexpensive, and I was there when the market was sky-high, and watched from the sidelines people buying homes that shouldn’t be buying homes,” he says.
He says he sees the market improving. “It is a buyer’s market, and it is going to be a buyer’s market for quite some time,” he predicts.
“The middle class will be the ones buying most of the homes and the ones that will be moving the market. Now, we have a new normal, meaning the people who can afford a home will be the ones buying a home.”
PREDICTIONS FOR HOMEOWNERS
“Home values will not increase and may decrease a little more as the shadow inventory of bank-owned properties floods the market. Banks have delayed and slowed the foreclosure process of homes and prevented foreclosed properties from entering into the market too fast.”
--Richard Soleymanzadeh, Garden City-based real estate attorney
“Homeowners who are not selling will continue to be in a better position now than they have been in recent years. Home values are rising, and the market is slowly becoming more liquid, so these people can afford to wait.
--Robert Campbell, real estate finance professor at Hofstra University
“Homeowners who are 40 to 60 years old just can’t afford to sell their first home and move to a larger home in a more expensive community. They don’t have enough equity, and many have mortgages that are higher than the value of their home. These folks may add an addition onto their home.”
--Carol Gallo-Turschmann, owner, Bill Gallo Realty, Valley Stream
PREDICTIONS FOR SELLERS
“The potential pool of buyers will remain relatively small compared to the amount of homes on the market, which means sellers need to be flexible on their pricing. Sellers of multiunit properties will do better, as the number of foreclosed and evicted homeowners turn into potential renters.” — Richard Soleymanzadeh
“Sellers will continue to compete with a large inventory of short sale and foreclosure properties, even at the medium and higher range price levels.” — Robert Campbell
“We saw more homes that were placed on the market only if there was an absolute need to sell. For instance, the owner is now moving to an assisted-living community, or there has been a death and the estate is not now placing the home on the market. For 2013, in addition to the absolutely “we must sell,” homeowners . . . we are going to have a lot of renovated homes placed on the market in the late spring, early summer.” — Carol Gallo-Turschmann
PREDICTIONS FOR BUYERS
“As long as the unemployment rate is high and the economy is slow, as it has been for the past four years, lending institutions will remain tight, and lending guidelines will be an obstacle to getting a mortgage loan. Buyers will need larger down payments in order to qualify for mortgage loans.” --Richard Soleymanzadeh
“Buyers will continue to have excellent opportunities in the current market to finance acquisitions at very low mortgage rates. However . . . conventional buyers will continue to face competition from an unusually large number of cash purchasers in the market.” --Robert Campbell
"Buyers should continue to be aware that their credit is very important when applying for a mortgage; and before shopping for a property, to get prequalified for a mortgage, they should make sure their credit is in good standing. If not, this gives them time to fix their credit." --Carol Gallo-Turschmann