Your turn next! This week Realty Takes belongs to Judi Desiderio, President of Town & Country
Real Estate. She both asked the questions and then gave her take on the current market impact on the east end.
Q: Are we about to see the true end of an insulated East End real estate market?
A: It won't be the first time we see players we believed insulated from market swings.
Q: Did buyers get mortgages they shouldn't have?
A. Absolutely! People were sold mortgages they shouldn't have bought when they could have taken a fixed rate for a bit more.
Q. What about those home equity lines of credit—to those who were banking on the real estate market's continuing ascent?
A. Any timer buyers speculate on anything, but especially on real estate, with short term, big gains in mind, they risk getting caught with their hands in the cookie jar.
Q. Other then trying to prop up lending with some $$$, what else will the government do?
A. Lower interest rates, work with owner-occupied homes at the brink of foreclosure, restructure loans, continue to prop the economy.
Q. How do the international market conditions affect us?
A. A psychological aspect of this down turn being global, capital
from other countries shuts off like a valve.
Q. How many buyers come from other countries?
A. The majority of our sales are still Manhattan based.
Q. How will this impact the CPF (Community Preservation Funds) of the East End towns who borrowed against future funds 'expected'?
A. This is a hot potato! To begin with, when real estate values have multiplied a number of times, why didn't the entry level have exemption to this tax? They are choosing to hurt their own infrastructure. It is hard enough for young people to buy their first home here, or for older people to remain here, but this makes it even harder. Every first time home buyer and senior citizen should be exempt. And how fair is it to tax only new buyers when all the residents enjoy the open space purchased with the funds? The towns should never have borrowed against money not received. Our market is like any other luxury item. It's one of the first things to go when times get hard.
Q. Will it hit only the low end with buyers who stretched to buy?
A. Nope! The hedge fund buying population, and those directly connected to The Street, pull back fast and furiously. Again not a "must have." The truly rich - those buying $35 to $40 million dollar third homes are not affected. Those buyers are less than 1% of our market. The high end, $4 - $9 million dollar, might opt to rent for a couple of hundred thousand or buy at $2 - $3 million and trade up when the economic climate recovers.
Q. What % of our buyers are in Hedge funds which are being beaten?
A. To Be Determined. They're still dropping.
Q. Will the $5M, $10M or higher priced homes suffer because their buyers are too tightly connected to the street?
A. Yes! See above!
Q. Will more 'Big Boyz' take their $$$ out of the market and put it in real estate?
A. Has to be some of this in our future. But if real estate is just another investment vehicle and the prognosis for real estate ain't rosey, why do it now? The #1 reason? Though real estate values may go down in the long term, it's always a safe place for your hard-earned money.
Q. What are buyers doing at the closing table when their loan — promised in writing — is not there?
A. I yield to mortgage brokers on this one.
(Okay mortgage brokers, let us know!)
Q. How will national real estate companies fair (Prudential and NRT — Corcoran, Coldwell Banker, Century 21, etc.) if the housing market across the Country is [failing], is it draining their coffers and force them to close offices or consolidate?
A. It has to be draining them when you read real estate sales across the nation are the worst in recent years, and foreclosures across the US are up 59%. In the end their goal is to be profitable. This they will close negative income producing locations, consolidate where they need to, and cut expenses. The most profitable companies are so closely connected to their dollars that this occurs within 12 months. Let's see who is and who isn't closely in touch with their bottom line.
( . . .Hey c'mon Corporates out there, you've got to respond to this!. . .)
Q. How will the owner operators of boutiques such as Town & Country fair?
A. I'm the only one in town doing the happy dance down Main Street. Ebb and flow! It's as natural as inhale and exhale.
(Hmmm? Really? Waiting to hear from the rest of you.)
Wait a minute! This just in, from the mortgage first responders, found on CNN
.Money saying it's a time to buy! "It's an absolute positive," said Loni Graiver, president of the Maine-based Cumberland County Mortgage. "The one catch is: You've got to be a buyer with good credit, a low debt-to-income ratio, a healthy down payment, verifiable income, and looking to finance less than $417,000."
Yeah right! Okay, back to Judi.
East End real estate. A really strange business!
All properties show listed with Town & Country Real Estate.