Archive for May, 2010


Tuesday, May 25th, 2010


Tuesday, May 25th, 2010

One clear indicator that East End real estate is bucking the National trend is the tally collected by the 5 East End towns — $19.64 Million.

That is more than twice the $7.85 Million collected for the same period last year! In fact the number of properties subject to this tax rose from 1,566 for the first 4 months in 2009 to 1,991 same period this year– just over 25% increase.

To date the Community Preservation Fund has collected a wopping $624 Million for land acquitions


Weekly Mortgage Market Update

Monday, May 24th, 2010

Eve Robin Jarrett
Senior Mortgage Consultant
Manhattan Mortgage
Office: 631-324-1555 x 25
Blackberry: 631-697-3366
e-Fax: 631-514-3654

For the week of May 24, 2010 // Vol. 8, Issue 21
In This Issue

Last Week in Review: Stock market teeters on the verge of becoming either a correction…or an “official” Bear market.

Forecast for the Week: A fully loaded plate of economic news is in store, including reads on housing and consumer attitudes.

View: How you can “insure” a smart and safe vacation this summer.

Last Week In Review

IT’S A SHOWDOWN…THE BULLS VS. THE BEARS. But we’re not talking about the Chicago Bulls who were recently knocked out of the NBA playoffs. We’re talking about the Bull Market that Stocks have enjoyed over the past months…that is now slipping back lower.

So why are these animal terms used to describe action in the Stock market anyways? The terms “Bull” and “Bear” are used because of the way those animals attack. Bulls attack using an upward thrusting motion with their horns, and Bears attack by moving their powerful claws in a downward motion. So an upward market is termed a Bull market, while a downward market is called a Bear market.

Last week, Stocks saw a sharp thrust downward, with prices down more than 10% from their peak. But that doesn’t mean it’s a Bear market just yet. Instead, the drop can be seen as a “correction”, if prices recover and resume their uptrend. A correction can be quite healthy, and help a Bull market sustain its strength. But here’s the trick: if the market drops 20% from its peak, it’s officially considered a Bear market. That means every Bear market was once potentially just a correction. And so the debate rages on. Is this a good time to buy – because you believe it’s a correction and prices will move much higher? Or is this a time to sell, before the correction turns into a Bear market? The answer should become clearer over the next few days, as the market’s direction takes hold.

Waiting in the wings are Bond prices and home loan rates… A Bear market could help Bond prices and home loan rates improve a bit more, as some of the money from Stock sales finds its way into the Bond market, including Mortgage Bonds. On the other hand, a correction back to a Bull market will be at the expense of some of the recent improvements that Bonds and home loan rates have enjoyed.

The reality is, Mortgage Bonds have looked a lot like a lottery winner recently, since Bond prices really should be much lower, and home loan rates much higher. But Mortgage Bonds are catching every lucky break – from the situation in Greece…to the declining Euro…to the correction in the Stock market. It’s all going in the favor of Mortgage Bonds…for now. But the Bond market’s good fortune may not last very long – so be sure to give me a call if I can help explain the current rate situation, and how it might benefit you.


Despite the sharp sell-off in Stocks, the markets did receive some good news last week on the inflation front. The Producer Price Index (PPI) was reported lower than expectations for the month of April, and the more closely followed Consumer Price Index (CPI) fell to report the first month-over-month decline since March of 2009. And when volatile food and energy prices were removed from the equation, the annual Core index came in at its lowest level since January 1966. Those numbers appear to show that inflation is subdued – and with oil prices significantly lower from where they were a few weeks ago, there will even be more downward pressure on headline inflation in the next report.

But the reality is that inflation will eventually begin to rear its ugly head – and once that happens, inflation can accelerate rather quickly. China recently reported a spike in inflation – and last week, the UK saw surprisingly higher inflation numbers being reported as well. So the Fed – and the markets – will have to continue to keep close tabs on inflation in the US.


Forecast for the Week

There’s a very full load of economic reports on tap this week, including fresh news on the health of the housing industry. After last week’s reports on Housing Starts and Building Permits in April, we’ll see reports on Existing Home Sales right away Monday morning and New Home Sales on Wednesday.

We’ll also discover how consumers feel about the economy with a report on Consumer Confidence on Tuesday, followed by the Consumer Sentiment Index on Friday. Both reports have risen lately, indicating that consumers feel better about the present and future economic conditions. The markets will be watching to see if that trend continues in this week’s reports.

The manufacturing sector of the economy will also be in the spotlight this week. Wednesday brings the Durable Goods Orders report, which measures new orders placed and is considered a leading indicator of manufacturing activity. That report will be followed by the Chicago PMI on Friday. This report surveys more than 200 Chicago purchasing managers about the manufacturing industry and is a good indicator of overall economic activity.

And if that wasn’t enough, we’ll also see more inflation news this week. First, the Gross Domestic Product (GDP) and GDP Chain Deflator for the first quarter will be released on Thursday. The Chain Deflator is a key inflation measure included in the GDP Report. And since inflation is the archenemy of Bonds and home loan rates, this report could be a market mover. Unlike the Consumer Price Index that was released last week, the Chain Deflator has the advantage of not being a fixed basket of goods and services, so changes in consumption patterns or the introduction of new goods and services will be reflected in the Chain Deflator. Then, one day after the Chain Deflator comes out, we’ll see the Personal Consumption Expenditures report on Friday. This report measures price changes in consumer goods and services, and is considered the Fed’s favorite gauge on inflation. After last week’s better-than-expected inflation news, the markets will definitely be watching these reports.

Rounding out the week, we’ll also see reports on Personal Income and Personal Spending this Friday.

But that’s not all…in addition to all those reports, the government will auction off $42 Billion of 2-years on Tuesday, $40 Billion of 5-years on Wednesday, and $31 Billion of 7-years on Thursday. These auctions may move the markets depending on how they are received.

Oh, not to mention that the news coming out of Europe may once again add to the market’s volatility here at home.

That’s a very full helping of potentially market moving activity. But you can count on me to be here and watching very closely. And remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.


Friday, May 21st, 2010

Long Island posted the firstgain in jobs in 2 years. 6,700 to be exact! Long Island’s unemployment rate is now 6.6%,, at the height (February it was 7.9% which was the highest rate since 1992. This is music to the ears of all local commerce… 

Leisure & Hospitality sector experienced the greatest growth by adding 5,500 jobs.

NYC’s unemployment rate dropped to 9.8% in April from 9.9% in March,, not much of a recovery but at least stable.

Long Island’s economy should be emerging from this great recession a head of the rest of the state & country.


Monday, May 3rd, 2010

I reported earlier that March 2010 was a great month for Real Estate in North Fork Wine Country. Now I am able to report that, in terms of contracts signed – which is the among the least delayed measures of RE activity- April 2010 continued very strong trending! With 34 contracts signed, April 2010 was equal to records set in March of 2008 and  (data gathered from MLSLI) and August of 2007, when RE was considered exceptionally strong.  Upscale sales were keeping up; but most activity showed at slightly lowered median price of $447,000 indicating first time home buyers took advantage of the tax incentives offered by State and Local governments; resulting in strong activity at the lower end in April at the end of the expiration dates of these programs to help the Real Estate Market recover. This did make a dent in availability of lower priced inventory on the North Fork and may signal rising prices. Days on market (DOM) seems to hover around 200 days (a bit over 6 months): sellers need to realize that pricing for their homes may be the most important decision for a successful sale. The theory that you can start high and see what happens may cause sellers to miss the boat as most excitement takes place right when a new listing hits the market. Still, a word of caution for sellers: unemployment seems to remain high -regardless of optimistic consumer spending- along with elevated "hidden inventory" levels (Foreclosures and Short sales) which may again influence pricing – although our area has been very lucky with few distressed sales to date. So sellers: use this up-tick in the market to your advantage to sell your home – value priced. Make sure negatives affecting appeal and cleanliness of the house are taken care of – great curb-appeal will bring quicker and better offers. Never be insulted by offers-many deals these days start out on the low side-but increased activity in the market will allow an experienced agent with the needed negotiating skills to bring buyers and sellers closer together and eventually close deals. So work with experienced brokers, especially now! Call Town and Country at our North Fork Offices in Mattituck or Southold (next door to the North Fork Table -one of our region’s most fabulous restaurants) – and find out why Town and Country remains the fastest growing Real Estate company on the East End – and what doing so organically really means! Join our success story.